European Union: European Commission adopted recommendation (EU) 2025/1099 on definition of small mid-cap enterprises

On 28 May 2025, the European Commission (EC) released Commission Recommendation (EU) 2025/1099 of 21 May 2025 on the definition of small mid-cap enterprises (SMCs), formalising criteria for classifying enterprises that exceed small and medium-sized enterprise (SME) thresholds but are distinct from large corporations. The Recommendation establishes maximum ceilings for staff headcount (up to 1’500 employees), turnover (EUR 300 million), and balance sheet total (EUR 150 million), aligning with principles from Commission Recommendation 2003/361/EC and excluding entities with disproportionate financial scale. It encourages Member States, the European Investment Bank (EIB), and the European Investment Fund (EIF) to apply these thresholds in policies supporting SMCs, while permitting flexibility for lower ceilings or sole reliance on staff numbers where justified. The Recommendation includes provisions for autonomous, partner, and linked enterprises, referencing Directive 2013/34/EU for assessments of linked entities, and mandates a review by 31 May 2030 to ensure coherence with economic developments and prevent overlaps with SME definitions under Union law.