What is an SME?

To obtain funding under the KMU-innovativ scheme it is essential that a small or medium-sized enterprise is participating in the project. The legal definition of an SME was set out by the EU Commission in January 2005. In addition to the three parameters of personnel headcount, turnover or balance sheet total, some further points are of importance. We therefore set out here the general data for simple classification together with pointers to further sources of information for more complex cases.
The basis for the classification of a company as an SME is EU Commission Recommendation 2003/361/EC, which has been in force since 1 January 2005. The revision took into account economic developments regarding the relevant turnover and balance sheet figures.

A new addition to the rules was the special consideration of SMEs that form part of a larger company structure. Unlike true SMEs, these have a stronger economic position and, in the opinion of the Commission, should not benefit from the measures intended to support SMEs.

Hence evaluation as an SME no longer rests purely on these characteristics, but also on company structure. Whether a company can be recognised as an SME can thus be determined schematically to only a limited extent.

The following is based on the EU framework. According to that framework, micro, small and medium-sized enterprises can be determined from the following characteristics:

 Company category  Personnel headcount  Turnover or  Balance sheet total
 medium-sized  less than 250  Maximum EUR 50 million  Maximum EUR 43 million
 small less than 50  less than 50  Maximum EUR 10 million  Maximum EUR 10 million
 micro  less than 10  Maximum EUR 2 million  Maximum EUR 2 million

  
When calculating employee headcount and the financial threshold values, links with other companies need to be taken into account. For this purpose, the EU Commission has published a declaration template.

For more information, see:

In many cases, questions relating to the definition and classification of a company can only be answered case-by-case. Advice is available from the KMU-innovativ support service on +49 800-2623 009.