The European Commission proposed on Wednesday to extend its regulatory and administrative simplifications to a new category of businesses – small and medium-capitalisation companies.
The new ‘omnibus’ simplification package proposed by the Commission would save such companies about €400 million annually.
Currently, Small and Medium Enterprises (SMEs) become classified as large businesses once they exceed 250 employees, which subjects them to a significant increase in compliance obligations, according to the Commission.
This situation can discourage growth and limit European competitiveness. To address this, the Commission proposes a special category for “small mid-caps,” defined as companies with fewer than 750 employees and an annual turnover not exceeding €150 million.
About 38,000 companies are expected to benefit under the new category. They will gain access to advantages previously reserved for SMEs or receive different treatment from multinational corporations.
Small and medium-capitalisation companies are “the heartbeat of our economy” and potential future multinationals, Stéphane Séjourné, Vice-President in charge of Prosperity and Industrial Strategy, said on Wednesday. Customised treatment would help maintain their vitality.
The new rules will include exemptions from the General Data Protection Regulation (GDPR). Organisations with fewer than 750 employees will only need to maintain records of personal data usage in “high risk” cases.
About 10,000 of these companies will also be exempt from listing in the fluorinated greenhouse gas (F-gas) register by 2026, a decision aimed at protecting small auto dealers importing or exporting used vehicles with this gas in their air conditioning systems.
Furthermore, the Commission will eliminate the requirement for providing printed user manuals, allowing digital formats instead.
The institution has pledged to reduce administrative burdens by 25% for all companies by the end of this legislative period.
The simplification policy is presented as a tool to boost innovation, growth, and investment in the EU, which has been outpaced by economic giants such as the United States and China.
