1. Standing for trust and integrity
SMEs in the EU:
Challenges and Opportunities
André Kilesse, FEE President
IFAC SMP Forum, Kampala, Uganda
5 June 2013
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FEE and its Members
45 professional institutes of accountants
33 European countries, including all 27 EU
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Representing the European Profession
FEE is a Recognised Regional Organisation of IFAC
Combined membership of more than 700.000 professional accountants
In public practice, small, mid-tier and large accountancy firms,
businesses of all sizes, public sector and education
Providing a large range of services: audit and other assurance, tax
services, financial and other advisory services
Committed to the public interest and the highest ethical principles
Contributing to a more efficient, transparent, and sustainable
European economy
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What is an SME in the EU?
Defined in EU law: (EU recommendation 2003/361)
SME comprises of Medium-Sized, Small and Micro enterprises
The main factors determining whether a company is an SME are:
number of employees ; and
either turnover or balance sheet total.
Company
category
Employees Turnover or Balance sheet
total
Medium-sized < 250 ≤ € 50 m ≤ € 43 m
Small < 50 ≤ € 10 m ≤ € 10 m
Micro < 10 ≤ € 2 m ≤ € 2 m
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EU SMEs in numbers
SMEs:
constitute 99.8 % of all EU companies (Source: ESBA Press Release 11 January 2013)
• micro businesses 92.2 %
• small businesses 6.5 %
• medium-sized businesses 1.1 %
contribute over 50% of total value added in the non-financial business
economy
provide 67.4 % of all private sector jobs
provided 80% of all new jobs from 2006-2011 (Source: Structural Business Statistics (Eurostat)
difficult access to finance is among top concerns (Source: SMEs' access to finance Survey 2011)
In 2011 about one third of the SMEs did not get the finance they had planned for.
• 11% of the applications were rejected
• 17% received less than they applied for
• 4% declined the loan offer from the bank because they found the conditions unacceptable
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Challenges for EU SMEs
Administrative and regulatory burden
Access to finance
Taxation
Lack of skills
Access to public procurements
Unfair/too strong competition
Labour law
Access to Single Market
Access to EU programmes
Late payments
Access to international markets
Access to information and advice
Instability world economy/energy costs
SME definition
(Source: Small Business Act for Europe Report on the results of the open consultation 22/04/2008)
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Opportunities for EU SMEs - EU Actions
Small Business Act (SBA) (2008):
first comprehensive EU SME policy framework, including legislative proposals, which aims to:
Design rules according to the 'Think Small First principle‘ (lighten administrative burdens)
Facilitate SMEs' access to funding
Help SMEs to get most out of the EU's Single Market
Create an entrepreneurial environment
European Commission activities based on SBA (since December 2011):
SME Finance Forum (Periodic stakeholder meetings on strategy; FEE is invited to those)
Action Plan to improve access to finance for SMEs
Programs based on this Action Plan
Horizon 2020: combine all research and innovation funding
Program for Competitiveness of Enterprises & SMEs (COSME) (planned budget of
€2.5bn).
providing SMEs with flexible financial instruments (such as EIB loans)
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European Small Business Portal
This portal gathers all information the EU provides on, and for, SMEs, ranging from practical advice
to policy issues.
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Access to EU finance
This site helps SMEs to apply for finance supported by the European Union.
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Opportunities – FEE Actions
SMEs/SMPs are a strategic priority! Therefore FEE has taken the following actions:
Set up the SMP Forum, as the working structure to:
connect SMP/SME related interests on a national level to those on EU level
integrate SMP/SME perspective in all FEE activities
Optimise FEE’s contribution, therefore close cooperation with:
European Commission
FEE Members (professional accountancy organisations)
• Knowledge building & sharing
• Best practices
• Innovation tools (CPA Ireland app for SMEs to track company
performance)
Organized events for wide range of stakeholders:
4 FEE Access to Finance Roundtables
IFAC-FEE SME Regulation Roundtable
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Opportunities – Expertise of SMPs
Enlisting SMPs as their preferred business advisors, to:
help entrepreneurs finance and manage their business;
enhance their trading partners’ trust
expand their operations
seize the opportunities of the internal market
properly apply regulation and discharge their obligations
solve the daily problems of SMEs across Europe
and INNOVATE
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SMEs Turning Opportunities into Actions
Remain innovative (crowd funding, use innovation platforms)
Seek (alternative) access to finance
Improve financial knowledge
Increase cross border operations
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Standing for trust and integrity
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Notas do Editor
Name FEE
These general EU law thresholds can be different (and more specific) in separate legislation, such as the Accounting Directives, see below. The Fourth Accounting Directive allows Member States to prescribe lighter reporting regimes for small (Article 11) and medium-sized (Article 27) enterprises. The thresholds for the two categories are periodically updated. Current thresholds with a new proposed micro category are as follows: Micro Small Medium-sized Balance sheet total ≤ € 500 000 ≤ € 4,4 m ≤ € 17,5 m Net turnover ≤ € 1 m ≤ € 8,8 m ≤ € 35 m Average number of employees during the financial year ≤ 10 ≤ 50 ≤ 250