How to obtain the SME status you deserve

You have to be recognised as an SME (Small and Medium-sized enterprise) by the EC to apply for funding opportunities in the Horizon 2020 program. The one-million-euro question is: “are you an SME?”

EU funding for life sciences SMEs

You have recently started your own company in life sciences and developed a beautiful product that you would like to bring to the market as soon as possible. You have many plans, ideas, wishes and dreams, but you lack the financial capital to realise them.

Or, you are a company that has been around for a while and you have recently proudly exceeded a headcount of 200! You have some products in the pipeline and would like to take the next step from pre-clinical to clinical.

Why do you need SME status?

Either way, you have identified some interesting funding opportunities in the Horizon 2020 program, e.g. Eurostars and the SME instrument, that can provide you with the financial resources to realise your envisioned program. However, there is one obstacle on the road; you have to be recognised as an SME (Small and Medium-sized enterprise) by the EC to apply for these type of grants. The one-million-euro question is: Are you an SME?

Are you an SME?

Good chance that you are; in Europe, 9 out of every 10 enterprises is an SME. However, obtaining the SME status depends for example on your relationship with investors, some financial figures and the headcount.

Before taking part in any SME funding programme, you need to obtain the SME status by carrying out the SME self-assessment in the EC portal. If your organisation is registered in the Beneficiary Registry of the European Commission, you can easily do an SME-self assessment. You can find this in the portal in the ‘my organisation’ section, scroll down to ‘SME’.

How to obtain SME status?

We will sum up the most important considerations for obtaining the SME status. You can find more information about this in “The revised user guide to the SME definition” of the European Commission.

  1. Your company has to be an enterprise (any entity engaged in an economic activity); this is probably your first checked box.
  2. You have to employ fewer than 250 persons.
  3. When an employee is on maternity or parental leave, you don’t include them in the headcount. Neither count students with training contracts.
  4. The annual turnover must not exceed EUR 50 million, and/or an annual balance sheet total must not exceed EUR 43 million.
  5. The annual turnover and balance sheet total are taken from the last closed accounting year, or if you don’t have a closed accounting year yet, the numbers you have so far.
  6. If in the last 3 years your company exceeded one of the above-mentioned figures in a single year, you can still obtain the SME status. If in the last 3 years your company exceeded the figures in 2 years, it will not be an SME.
  7. There are 3 SME categories, dependent on other enterprises involved in the company:
    • Autonomous – your company is independent or has one or more minority (<25%) partnerships with other enterprises;
    • Partner enterprise – your company includes other enterprises that rise to at least 25% shares or voting rights, but no more than 50%
    • Linked enterprise – your company includes shares or voting rights with another enterprise that exceed the 50% threshold
  8. Your enterprise is still considered to be autonomous if the investor has a stake up to 50% if the investor is a venture capitalist, university, local authority or another public body.
  9. When your enterprise is a partner enterprise, you need to complete the SME self-assessment using the headcount and the financial figures of your own company as well as the other company proportionally.
  10. If your enterprise is linked to other companies, you need to complete the SME self-assessment using the headcount and the financial figures of your own company as well as 100% of the other company.
  11. If your enterprise is part of a consolidated account of another enterprise, this is considered as a linked enterprise. In a consolidated account the financial data of a group of companies are considered as a single economic entity.
  12. If you are a partner or linked enterprise, take only into account the organisations directly downstream or upstream from your own organisation. If the organisation upstream or downstream is linked to another, you should also take those data into account.

More information is available in the participant portal and via your national contact point.

Request assistance

Contact us if you received SME status and would like support in writing a successful proposal, business plan or in managing your EU project.