Invest Europe
SME definition
Key policy areas
30 Oct 2025
The European Commission Recommendation 2003/361 sets out the main factors for determining whether a company is an small and medium-sized enterprise (SME).
These include the total number of employees and either turnover or the size of the balance sheet. In June 2017, the European Commission announced it was considering reviewing the 2003 definition, although no proposal has since been introduced (despite several attempts over the past few years).
How does it affect private equity?
Under the current EU SME definition, only companies that do not receive a majority or controlling investment from a venture capital firm are able qualify for SME status. For a private equity-backed portfolio company, SME status is important as it allows the firm to be eligible for government support programmes or state aid. Moreover, the regulator is typically trying to make it easier for SMEs to operate by either providing them with regulatory exemptions or by placing fewer requirements on the investors that back them. For example, the AIFMD provides an exemption for SMEs from certain disclosure and asset stripping requirements.
SME definition library
Filter: by Year
All Years
2026
2025
2020
2017
2016
2015
Earlier
Response to the Commission’s targeted survey on simplifying the General Block Exemption Regulation (GBER)
Positions & consultation responses
02 Jul 2026
Position on the European Biotech Act I
Positions & consultation responses
29 Apr 2026
Position on the draft 2027-2034 General Block Exemption Regulation (GBER)
Positions & consultation responses
17 Apr 2026
Position on the Scope of the Leaked 28th Regime Corporate Legal Framework (EU Inc.)
Positions & consultation responses
17 Mar 2026
Position on the SME definition
Positions & consultation responses
17 Mar 2026
Statement on the 28th regime
Positions & consultation responses
19 Jan 2026
Response to the European Commission Consultation on the Rescue and Restructuring Guidelines
Positions & consultation responses
13 Nov 2025
Response to the European Commission Consultation on the 28th regime
Positions & consultation responses
29 Sep 2025
Response to the European Commission Consultation on the European Innovation Act (EIA)
Positions & consultation responses
29 Sep 2025
Response to the European Commission Consultation on the General Block Exemption Regulation (GBER)
Positions & consultation responses
29 Sep 2025
Response to the European Commission Consultation on the EU life sciences strategy
Positions & consultation responses
16 Apr 2025
Position Paper on Investment Omnibus proposal
Positions & consultation responses
18 Mar 2025
Response to European Commission Consultation on EU Start-up and Scale-up Strategy
Positions & consultation responses
03 Mar 2025
Letter on state aid issues related to SME Definition
Positions & consultation responses
28 Apr 2020
Response to Commission Consultation on the review of the SME definition
Positions & consultation responses
06 Jul 2017
