European Commission DG Enterprise and Industry October 2012 José Becerra, Thomas Elsner
The EU SME definition
The EU SME definition
Entered into force on 1 January 2005
Contained in a recommendation adopted in 2003 by the Commission (Recommendation 2003/361/EC)
Result of wide-ranging discussions between the Commission, Member States, business organisations as well as two open consultations on the Internet
The EU SME definition
Applies to all policies and programmes that the Commission operates for SMEs
Member States are invited to apply it as widely as possible
Taken over in the field of State Aid and EU programmes
The EU SME definition
Enterprise category
Headcount Annual turnover
or Annual balance
sheet
Medium < 250 ≤ € 50 million
(in 1996: €40 M)
≤ € 43 million
(in 1996: €27 M)
Small < 50 ≤ € 10 million
(in 1996: €7 M)
≤ € 10 million
(in 1996: €5 M)
Micro < 10 ≤ € 2 million
(previously. not defined)
≤ € 2 million
(previously. not defined)
The EU SME definition
First step: am I an enterprise?
an enterprise = « any entity engaged in an economic activity, irrespective of its legal form »
reflects the terminology of the European Court of Justice
The EU SME definition
Second step: how to calculate the data of my enterprise?
compulsory to respect staff headcount threshold
only one of the financial thresholds has to be respected (turnover or balance sheet)
The EU SME definition
Staff headcount covers full time, part-time and seasonal staff
Apprenticeship/vocational training with contract is not counted in the headcount, nor is maternity or parental leave
Is expressed in AWU (Annual Working Unit)
1 employee full time/year = 1 AWU 1 employee 3 months/year = 0,25 AWU
The EU SME definition
Data to take into account = those of the latest approved accounting period, calculated on an annual basis
If thresholds are exceeded
during the year, enterprise will retain its SME status during two consecutive accounting periods, loss of SME status ( and
vice versa)
The EU SME definition
Third step : what else do I take into account when calculating my data?
=> relationships you may have with other enterprises
To work out your individual data, you will have to establish whether your enterprise is AUTONOMOUS – PARTNER – LINKED
The EU SME definition
What is an “autonomous” enterprise?
totally independent enterprise or
holding less than 25% of capital or voting rights in one or more other enterprises (and vice versa) – Art. 3.1
Exceptions in case of certain investors (venture capital companies, business angels etc.) – Art. 3.2
The EU SME definition
Autonomous enterprise: calculation of data
Use your own staff headcount and financial data to check if thresholds of Art.2 are respected
The EU SME definition
What are “partner” enterprises?
holding equal or greater than 25% of capital or voting rights in one or more other enterprises (and vice versa) – Art. 3.2
not classified as linked enterprise, i.e. voting rights in other enterprise do not exceed 50%
Special case: no SME if 25% of capital or voting rights controlled by one or more public bodies – Art. 3.4
The EU SME definition
Partner enterprises: calculation of data
Add to your own data a proportion of the other enterprise’s data
This proportion corresponds to the percentage of shares or voting rights that are held
Ex. 30% shares => add 30% of data
The EU SME definition
What are “linked” enterprises? (= enterprises which form a GROUP)
An enterprise is LINKED to another when it:
holds a majority of the shareholders’ or members’ voting rights
is entitled to appoint or remove a majority of management body
is able to exercise a dominant influence through contract/provision in the memorandum or articles of association
The EU SME definition
Linked enterprises: calculation of data
Add to your own data 100% of the data of the enterprise(s) to which you are directly or indirectly linked
(where the data were not already included through consolidation)
The EU SME definition
The EU SME definition
The EU SME definition
The EU SME definition
Less than 25%
participation by/of the enterprise
Autonomous
Between 25% and 50%
participation by/of the enterprise
Partner
More than 50% participation by/of
the enterprise (or equivalent control)
Linked
TYPE TREATMENT
Use solely the data of the company
100% of the data of the enterprise
+ data of the upstream/downstream
aggregated proportionally
to the participation (one level only)
Use of existing consolidated accounts
or addition of 100% of the data of all
linked enterprises Disclaimer: Simplified presentation ; some specific cases are not described.
Implementation
Art. 9 of Annex to Recommendation
Implementation reports 2006, 2009
External Evaluation in 2012
External Evaluation - scope
Literature review
Statistics
Interviews at EU and Member State level 10 Member States (which represent over two-thirds of the EU enterprise population)
External Evaluation – Results I
Size distribution across time
Headcount ceiling
Financial ceilings
Enterprises of intermediate category
External Evaluation – Results II
International comparisons
Investments by Venture Capital Funds
2-year rule
Partner and Linked enterprises
The EU SME definition
For more information: http://ec.europa.eu/enterprise/policies/sme/facts-
figures-analysis/sme-definition/index_en.htm
European Commission DG Enterprise and Industry Brussels, 26 October 2012 Maarit Nyman
Deputy Head of Unit D.4
Reducing regulatory burden for SMEs
Background
The European Council of June 2011: « the regulatory burden on SMEs needs to be further reduced and where appropriate micro-enterprises should be exempted from certain future regulations or at least subject to lighter regime »
The Report on Minimising Regulatory Burden for SMEs. Adapting EU regulation to the needs of micro-enterprises (COM 2011 803 final).
Main proposals of the Report
Strengthening the SME Test: Introduce the principle of the reversed burden of proof in the Commission's impact assessment procedure.
Screening the acquis to implement the « Think Small First » principle
Involving SMEs better in law-making and in evaluating the progress made (e.g. TOP10 consultation).
Setting up a scoreboard of COM legislative proposals.
Strengthening the SME Test
Better awareness raising and training on how to apply the test
Guidance on how to apply the principle of reversed burden of proof
Building knowledge on SMEs in various policy areas and sectors (SME Performance Review, data sources, studies)
The role of the Impact Assesment Board
Involving SMEs better in law-making
TOP10 public consultation launched on 1 October
Will run until 21 December
To define most burdensome areas of EU legislation or the specific pieces of EU legislation which are considered burdensome
COM to make taylor-made changes to legislative acts identified as burdensome
Scoreboard
To show all exemptions and lighter regimes for SMs and micro companies proposed by the COM
The way they change during the co-decision process and the final outcome
The subsequent implementation by Member States with emphasis on highlighting « gold plating ».
Small Business Act Governance
Network of national SME Envoys
The SME Assembly
Both have a crucial role in evaluating the uptake of the Small Business Act and promoting the exchange of good practices, including in the area of reducing regulatory burden.
Next Steps
Commission is preparing the follow-up to the EU Smart Regulation agenda (December 2012)
No new quantitative targets for burden reduction but a bottom-up approach involving stakeholders closely.
A report on the follow-up of the November 2011 report and the results achieved scheduled for January 2013.
European Commission DG Enterprise and Industry Brussels, 26 October 2012 Maarit Nyman
Deputy Head of Unit D.4
Entrepreneurship2020
Action Plan
Concept
Building on the Small Business Act and its Review
Action and impact-oriented
Timing: adoption by College before year-end
Action Pillars
Improve framework conditions
for entrepreneurs' business activities
for preserving, maintaining, and transmitting existing
entrepreneurial capital
Create a more entrepreneurial Europe - support would-be and new entrepreneurs
Action Pillar 1 Framework Conditions
Facilitating start-ups
Transfers of business
Efficient bankruptcy procedures, second chance for honest bankrupts
Reduction of administrative burden and smart regulation: strengthening of existing efforts
Support new entrepreneurs in initial stages
Improve access to finance
Action Pillar 2 – Create a more entrepreneurial Europe
Fostering entrepreneurial mindsets in education and training
Women, seniors – untapped pools of entrepreneurial potential in Europe
Implementation and governance
Actions: both Commission and national/regional governments
Commission: all DGs playing key role in entrepreneurship support, DG ENTR as lead
Member States: under umbrella of Small Business Act as Commission’s medium-term follow-up of implementation under the Annual Growth Survey and Europe2020
SBA implementation reviews
Thank you for your suggestions
Public consultation closed on 1 October: over 600 replies received
http://ec.europa.eu/enterprise/policies/sme/public-consultation/index_en.htm
Top Related