Making the leap from a small business to a large company will no longer be a problem in Europe. The European Union wants to prevent growth from leading to a sudden increase in obligations and costs for companies, something that until now slowed down their development, especially in companies that are in limbo between small companies and medium or large companies.
The European Parliament has approved a proposal to create a new intermediate business category, designed for those companies that exceed the size of SMEs but are not yet large corporations. This measure is part of the regulatory simplification package to improve competitiveness, published in the same European Parliament web portal.
The idea is that these companies can continue to grow without being penalized by a sudden change in administrative requirements.
A new category is born: “mid-cap” companies
The main novelty is the creation of a new category of companies that is located between SMEs and large companies.
According to the proposal, companies that meet certain criteria will be included in this group, such as having up to 1,000 employees or reaching certain levels of turnover or assets.
This new classification will allow the rules to be adapted to the reality of these companies, preventing them from automatically losing profits when they are no longer SMEs.
Less bureaucracy and more facilities to grow
One of the key points of the reform is the reduction of administrative burdens. Companies in this new category will be able to benefit from measures similar to those of SMEs, especially in aspects such as data protection or access to financing.
Among the main advantages are:
- more flexible data protection obligations
- easier access to capital markets
- fewer requirements in certain European regulations
All of this seeks to facilitate its growth and improve its competitiveness within the single market.
Changes in financing and market access
The regulations also introduce improvements so that these companies can finance themselves more easily.
In this sense, the rules for accessing growth markets are simplified and the information requirements in financial prospectuses are reduced, which will allow these companies to obtain resources without assuming an excessive burden.
In addition, the aim is for them to be able to compete on equal terms with larger companies without losing institutional support.
With this measure, the European Union wants to eliminate one of the main obstacles to business growth: the sudden jump in obligations when exceeding the SME threshold.
The idea is to accompany companies in their growth, facilitating their development without suddenly increasing bureaucracy or costs.