MFSA Newsletter - Think small first: a Small Business Act for Europe
Most jobs in the EU are provided for by small- and medium-sized enterprises (SMEs), companies of 250 employees or less. They have a crucial importance for future development, but very often face enormous bureaucratic hurdles and obstacles. European...
Most jobs in the EU are provided for by small- and medium-sized enterprises (SMEs), companies of 250 employees or less. They have a crucial importance for future development, but very often face enormous bureaucratic hurdles and obstacles. European SMEs deserve to be better assisted to fully unlock their potential of long-term sustainable growth and of more job creation. To achieve this goal, the European Commission recently unveiled the Small Business Act for Europe (SBA), based on 10 guiding principles and proposing policy actions to be undertaken by both the Commission and member states.
The European Small Business Act sets out 10 principles which should be adopted at the highest political level and concrete measures that will make life easier for small businesses. After consulting with businesses and their representatives, the European Commission also resolved to propose new legislation in four areas that particularly affect SMEs.
• First, a new general block exemption regulation on state aids will simplify procedures and reduce costs. It will increase the aid intensity for SMEs and make it easier for SMEs to benefit from aid for training, research and development, environmental protection and other types of aid.
• Secondly, a new statute for a European Private Company will allow a Société Privée Européenne (SPE) to be created and operate according to the same uniform principles in all member states. It has been designed to address the current onerous obligations on SMEs operating across borders, which need to set up subsidiaries in different company forms in every member state in which they want to do business. In practical terms, the SPE would mean that SMEs can set up their company in the same form, no matter if they do business in their own member state or in another. Opting for the SPE will save entrepreneurs time and money on legal advice, management and administration.
• Thirdly, a new proposal on VAT will offer member states the option to apply reduced VAT rates for locally supplied services, including labour intensive services, which are mainly provided by small and medium enterprises.
• Lastly, an amendment to the directive on late payments is foreseen in 2009 to help to ensure that SMEs are paid within the 30-day time limit stipulated.
The 10 principles shall guide the conception and implementation of policies at EU and member state levels, such as granting a second chance for business failures, facilitating access to finance and enabling SMEs to turn environmental challenges into opportunities.
In addition to the standing commitment to cut the administrative burden by 25 per cent by 2012, the time needed to start a new company should be no more than one week, the maximum time to obtain business licences and permits should not surpass one month and one-stop-shops should assist to facilitate start-ups and recruitment procedures.
The European Small Business Act sets out 10 principles which should be adopted at the highest political level and concrete measures that will make life easier for small businesses. After consulting with businesses and their representatives, the European Commission also resolved to propose new legislation in four areas that particularly affect SMEs.
• First, a new general block exemption regulation on state aids will simplify procedures and reduce costs. It will increase the aid intensity for SMEs and make it easier for SMEs to benefit from aid for training, research and development, environmental protection and other types of aid.
• Secondly, a new statute for a European Private Company will allow a Société Privée Européenne (SPE) to be created and operate according to the same uniform principles in all member states. It has been designed to address the current onerous obligations on SMEs operating across borders, which need to set up subsidiaries in different company forms in every member state in which they want to do business. In practical terms, the SPE would mean that SMEs can set up their company in the same form, no matter if they do business in their own member state or in another. Opting for the SPE will save entrepreneurs time and money on legal advice, management and administration.
• Thirdly, a new proposal on VAT will offer member states the option to apply reduced VAT rates for locally supplied services, including labour intensive services, which are mainly provided by small and medium enterprises.
• Lastly, an amendment to the directive on late payments is foreseen in 2009 to help to ensure that SMEs are paid within the 30-day time limit stipulated.
The 10 principles shall guide the conception and implementation of policies at EU and member state levels, such as granting a second chance for business failures, facilitating access to finance and enabling SMEs to turn environmental challenges into opportunities.
In addition to the standing commitment to cut the administrative burden by 25 per cent by 2012, the time needed to start a new company should be no more than one week, the maximum time to obtain business licences and permits should not surpass one month and one-stop-shops should assist to facilitate start-ups and recruitment procedures.