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A “Small Business Act” for European SMEs

The Small Business Act (SBA) creates a strategic framework to enable the potential growth and innovation of SMEs to be better exploited. This should encourage the sustainable competitiveness of the European Union (EU) and its transition towards a knowledge economy.


Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions of 25 June 2008 entitled “Think Small First” – A “Small Business Act” for Europe [COM(2008) 394 Final – Not published in the Official Journal].


The initiative called “Small Business Act” (SBA) for Europe aims to create favourable conditions for the growth and sustainable competitiveness of European small and medium-sized enterprises (SMEs). Community and national policies should take better account of the role of SMEs in economic growth and job creation.

The SBA is founded on ten principles aimed at framing national and Community policy-making, as well as practical measures for implementing them.

The development of an entrepreneur-friendly environment in order to facilitate the creation of SMEs, by women and immigrants in particular, and to encourage business transfers, specifically of family businesses.

In particular, the Commission shall promote a business culture through networking of enterprises and exchanges of experience. Member States must take measures in the fields of education, training, taxation and support for entrepreneurs.

Support for honest entrepreneurs who wish to start up their business again after bankruptcy.

The Commission encourages the development of a “second chance policy”. This requires Member States to put in place support schemes and to limit the length of liquidation procedures following non-fraudulent bankruptcy.

Designing rules according to the “Think Small First” principle.

Before adopting new rules, the Commission and Member States should evaluate their impact using an “SME test” and carry out consultations with stakeholders. Specific measures should be provided for small and medium-sized enterprises in terms of information and reporting.

Adapting public administrations to the needs of SMEs and eliminating administrative barriers.

Member States should make greater use of simplified procedures, e-government and one-stop-shop systems. They are committed to accelerating procedures for setting up businesses and starting up business operations.

Adapting public policy tools in terms of awarding public procurement contracts and allocating State Aid.

In particular, the Commission shall present a code of best practice for public procurement contracting authorities and a vade-mecum on State Aid for SMEs. Member States should adopt specific measures for SMEs and better inform them of existing options.

Access to different types of finance, such as risk capital, micro-credit and mezzanine credit.

The Commission must create favourable conditions for investment, particularly at cross-border level. Member States must launch new incentive programmes, whilst also exploiting opportunities offered by Community funds, such as the Competitiveness ad Innovation Framework

Programme 2007-2013 (CIP), cohesion policy programmes and the European Agricultural Fund for Rural Development (EAFRD).

Adapting the Single Market Policy to SMEs and improving its governance and visibility.

The Commission must ensure that SMEs benefit from the opportunities offered by the common market, particularly through patent and Community trade mark systems. In addition, Member States must ensure compliance with the mutual recognition principle and the smooth running of the SOLVIT network.

Increasing SMEs potential for innovation, research and development, in particular by ensuring that entrepreneurs and their personnel obtain necessary qualifications, regrouping businesses in clusters and coordinating national initiatives.

The Commission must support the participation of SMEs in Community programmes, such as the Leonardo Da Vinci programme for the mobility of apprentices and the Framework Programme for Research and Development (FP7). The Commission must facilitate access for SMEs to State Aid.

Turning environmental challenges into opportunities, regarding the production and marketing of goods and services

In particular, the Commission must facilitate access to the Community eco-management and audit scheme (EMAS). Member States should encourage SMEs to develop new environmentally-friendly products and services and to adopt new eco-efficient management systems.

Opening SMEs up to external markets.

SMEs must be better supported in order to overcome exchange barriers with third countries and in particular with emerging markets. To this end, the Commission will establish European Business Centres at international level, starting with China and India, and will support the opening up of private and public procurement markets in third countries.

Legislative proposals

The SBA also provides a set of new legislative provisions which respond to the needs of SMEs. These proposals concern the opportunities offered to SMEs in terms of State Aid compatible with the common market, the Statute for a European Private Company (SPE), the reduction of certain VAT rates, the simplification and harmonisation of the rules on invoicing and the reduction of late payments.


The business environment for SMEs has improved, particularly through the establishment of European policy tools, such as the modern policy for SMEs and the European Charter for Small Enterprises. However, an appropriate political response must be provided with regard to new economic developments, in particular in view of the global financial crisis and its impact on the real economy.

The Small Business Act was officially adopted in the conclusions of the Competitiveness Council of 1 and 2 December 2008.


Communication from the Commission to the European Parliament, the Council, Economic and Social Committee and the Committee of the Regions Review of the "Small Business Act" for Europe [COM(2011) 78 final - Not published in the Official Journal].

Last updated: 31.08.2011

See also

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