The European Commission proposes to cut €400 million in annual administrative costs for companies, adding to the €8 billion already targeted through earlier simplification efforts.
With a new category of small-mid caps, the measures will ease compliance obligations and thus free resources for growth and investment across the Single Market. The measures boost incentives for SMEs to scale up, digitise regulatory processes, reduce red tape, and support the Commission's goal to cut administrative costs by 25% overall and by 35% for SMEs by the end of this mandate.
Unlocking targeted support for small mid-caps
When SMEs grow beyond 250 employees, they become large enterprises under the current rules — and face a sharp increase in compliance obligations. This “cliff-edge” can discourage growth and limit competitiveness. The European Commission is therefore identifying a new category of companies, small mid-caps (SMCs), i.e., companies with fewer than 750 employees, and either up to €150 million in turnover or up to €129 million in total assets.
These small mid-caps - nearly 38,000 companies in the EU - will access for the first time certain existing SME benefits, such as specific derogations under the General Data Protection Regulation (GDPR) or simplified rules, such as prospectus rules making listing of SMCs on the stock market simpler and less costly.
