Draft legislation to be tested for impact on SMEs

Legislation that may affect the functioning of small businesses and enterprises will from next year have to be “SME-tested” before coming into force. It should also become possible to start a company within three days for less than €100.

These commitments were made by Malta yesterday in Brussels during a meeting of 27 SME envoys – one for each EU member state – acting as ambassadors of small businesses in their country. Malta’s SME envoy is Parliamentary Secretary Jason Azzopardi.The participants agreed to introduce three major SME-friendly measures by September 2012. The first is to introduce a compulsory impact assessment in the drafting of laws that may have a direct or indirect effect on SMEs. This obligatory test has already been adopted by the European Commission and 12 member states. Malta has completed the preparatory work through drafting of the necessary legislation.

EU member states also committed themselves to enable entrepreneurs to start a company in three days days for less than €100.The third commitment is to increase SMEs’ access to finance and public procurement while reducing bureaucracy.

EU Industry and Entrepreneurship Commissioner Antonio Tajani told the envoys that SMEs needed to gain a central place in the EU’s economy. “We urgently need a genuine revolution to place SMEs and the real economy at the centre of politics and public administration in order to free their potential. This is the main way to create the right conditions for growth.” The SME test is a vital component of the EU’s Think Small First strategy for SMEs. According to research conducted by the Commission, most member states using this method found that it had real added value for SMEs.

In particular, member states reported that the SME tests gave small enterprises time to adapt their businesses to new legislation and contributed to avoiding laws which could lead to a disproportionate burden on enterprises.

The research also found that the test rendered the potential impacts on SMEs of new proposals clearer while mitigating measures were easier to identify.