Determination of SME Status
Micro, small and medium-sized enterprises (SME) are such enterprises, which match with the criteria, provided in for by Annex I of the EC Regulations No 800/2008. The said definition is included in all EC programs, relating to the provision of aid to SMEs.
The definition is specifying not just the staff headcount and financial limits, identifying the category of the particular company, but also, whether the company, which is claiming to the status of a SME, is linked to other companies, i.e. both, to who is the owner of the capital shares and the voting rights in the particular company, as well as, whether the owners appear to own capital shares or voting rights in other companies.
Bothe on the mutual interrelation of the companies, they are divided into 3 groups: autonomous enterprises, partner enterprises and linked enterprises. It has been taken into consideration, whether the particular company is capable of self-financing, for instance, a company, which is linked to other companies with larger financial capacity may exceed the SME criteria and not qualify as an SME. The company is assessed in compliance with the status to the date of assessment.
Small and medium-sized enterprises (SMEs) represent 99% of all businesses in the EU. The definition of an SME is important for access to finance and EU support programs targeted specifically at these enterprises. By determining the status, the following criteria shall be taken into consideration:
Micro
10
and
Staff headcount ( < )
EUR
2 mln.
or
Turnover ( <= )
EUR
2 mln.
Balance sheet total ( <=)
Small
50
and
Staff headcount ( < )
EUR
10 mln.
or
Turnover ( <= )
EUR
10 mln.
Balance sheet total ( <=)
Medium-sized
and
Staff headcount ( < )
EUR
or
Turnover ( <= )
EUR
Balance sheet total ( <=)
By identifying the status of the particular enterprise, the data of the previous closed financial year shall be taken into consideration (staff headcount, turnover, balance sheet total). A newly established company shall be evaluated by the current period of account. By identifying the status of the company, also the partner companies, as well as, linked enterprises will be taken into consideration.
 
i
The autonomous company does not own more than 25% capital shares in another company, and total 25% or more of the capital shares of the particular company are not owned by another company or several linked companies.
i
The proportion of the capital shares of partner companies exceeds 25%-50%.
i
The proportion of the capital shares of the linked companies exceeds 50%.
 
Staff headcount
The project applicant’s data
The partner company’s data (in proportion)
Data on the linked companies
Total
Annual turnover
Balance sheet total
Enterprises which have one or other of such relationships through a natural person or group of natural persons acting jointly are also considered linked enterprises if they engage in their activity or in part of their activity in the same relevant market or in adjacent markets. (An ‘adjacent market’ is considered to be the market for a product or service situated directly upstream or downstream of the relevant market). Pursuant to Article 3, paragraph c) of Section 3, Annex I of the EC Regulations No 800/2008, and Article 1, paragraph f) of Section 18 of the Law “On taxes and Fees”, by verifying the relationship of the companies, not only members, but also officials are taken into consideration – the board members and their representation rights, i.e. whether one and the same person or one and the same persons have a majority of votes on the board of directors (executive bodies) of these companies or cooperative societies.
Manual “The New SME Definition”
Source: Latvian Investment and Development Agency
Mo. – Fr.: 08:00 – 16:30