The European Commission released a factsheet in May 2025 outlining the new small mid‑cap category. This group includes firms with between 250 and 749 employees, up to €150 million turnover or €129 million balance sheet total, effectively bridging the gap between Small and Medium Enterprises (SMEs) and large enterprises. The aim is to reduce sudden increases in regulatory obligations when firms outgrow SME status.  

Small mid‑caps are estimated to number around 38,000 across all EU Member States. By extending certain SME perks such as simplified record keeping and reduced reporting to this category, the initiative is projected to save companies up to €400 million annually.

Key takeaways

• New size definition: Companies with 250-749 employees and either up to €150 million turnover or €129 million in total assets are now classified as ‘small mid‑caps’.
• Bridging the regulatory gap: This helps avoid the steep increase in compliance costs that firms typically face once crossing the medium‑sized enterprise threshold.
• Significant impact: Around 38,000 EU firms, especially in manufacturing and related sectors will benefit from lighter regulations.
• Cost savings: Simplifications are expected to reduce administrative burdens and save firms approximately €400 million per year.
• Selective relief: Measures include exemptions from detailed record keeping for low-risk activities and specific reliefs.  

This development is a strategic move to support scale‑up and resilience across EU industries. Small mid‑caps often represent local manufacturing hubs and community enterprises, reduced red tape helps these businesses stay competitive, maintain employment, and foster regional growth.

Read the full factsheet here.