On 21 May, the European Commission presented its proposal to give a common European definition of “small mid-cap enterprises”. Mid-cap companies are bigger than SMEs, which have less than 250 employees, but smaller than multinationals with thousands of employees. This new category of mid-caps will encompass companies with more than 250 employees and less than 750 employees, which covers around 40,000 companies in Europe. Those companies will enjoy regulatory relief from several existing EU laws.
The creation of this new category will also assuage fears about the so-called "threshold effect", which is when a company becomes suddenly subject to a high number of administrative obligations when crossing the 250-employee threshold, moving from small to large. For instance, should a small mid-cap wish to be listed on stock exchanges, they will benefit from a lighter disclosure regime than large companies, meaning that they will have less information to provide to potential investors. Growing a business in Europe will become easier.
This new category of small mid-caps will systematically be considered when new laws are being prepared.
ALDE Party President Svenja Hahn MEP (FDP, DE), Renew Europe coordinator in the Internal Market and Consumer Protection committee, said:
“The Commission’s proposal would ease the bureaucratic burden on many companies in the EU. This is an important step to give European companies the breathing space they need, so they can focus on what they do best: to innovate and produce.”