THE SMALL BUSINESS ACT FOR EUROPE AND EXPECTED MEASURES BY MEMBER STATES

The Small Business Act (SBA) for Europe adopted in 2008 and updated in 2011 reflects the Commission's political will to recognize the central role of SMEs in the EU economy. The 21 million SMEs create 58% of the value-added, employ 87 million people and account for 85% of the net job creation. SMEs also have a central role in the Commission's overall reform strategy, Europe 2020 and its flagship initiatives, in particular on Industrial policy.

The SBA sets out a comprehensive policy programme with specific actions in ten areas (see below) with the objectives to promote entrepreneurship, to apply the 'Think Small First' principle in policy making and to promote SMEs' growth by helping them tackle the remaining problems which hamper their development. The update of the SBA in 2011 shifted the focus to actions most likely to help SMEs cope with the economic crisis: facilitating access to finance, cutting red tape, promoting access to finance, cutting red tape, promoting access to markets and stimulating entrepreneurship. The SBA strives to foster SME development and remove obstacles to SME growth. It does not constitute a legal requirement, but a series of guidance measures that can be idiosyncratically adapted to suit each country's specific needs while simultaneously achieving a degree of harmonisation across the EU. The SME Performance Review, conducted on an annual basis, is one of the main tools the European Commission uses to monitor and assess countries' progress in implementing the Small Business Act (SBA)

The Ten Principles

1. Entrepreneurship: Creating an environment in which entrepreneurs and family businesses can thrive and entrepreneurship is rewarded.
2. Second Chance: Ensuring that honest entrepreneurs who have experienced bankruptcy are promptly given a second opportunity to succeed.
3. Think Small First: Designing rules modelled on the 'Think Small First' principle.
4. Responsive Administration: Making public administration responsive to the needs of SMEs
5. State Aid and Public Procurement: Adapting public policy tools to suit SME needs- facilitating SME's participation in public procurement and ensuring better access to State Aid for SMEs
6. Access to Finance: Facilitating SME's access to finance and developing a legal and business environment conducive to the specific requirements of SMEs, including timely payments in commercial transactions.
7. Single Market: Helping SMEs to benefit from the opportunities offered by the Single Market.
8. Skills and Innovation: Promoting the enhancement of skills in the SME workforce and all forms of innovation.
9. Environment: Enabling SMEs to transform environmental challenges into economic opportunities while acting sustainably.
10. Internationalisation: Encouraging SMEs to benefit from the growth of global markets and supporting them in this pursuit.

Recommended Measures for Member States 

1. Stimulate innovative and entrepreneurial minsets among young people by introducing entrepreneurship as a key competence in school curricula, particularly in general secondary school education, and ensure that it is correctly reflected in teaching material.
2. Ensure that the importance of entrepreneurship is correctly reflected in teacher training.
3. Step up cooperation with the business community in order to develop systematic strategies for entrepreneurship education at all levels.
4. Ensure that taxation (in particular gift tax, taxation of dividends and wealth tax) does not unduly hamper the transfer of businesses.
5. Put in place schemes for matching transferable businesses with potential new owners.
6. Provide mentoring and support for business transfers.
7. Provide mentoring and support for female entrepreneurs.
8. Provide mentoring and support for immigrants who wish to become entrepreneurs.
9. Promote a positive attitude in society towards giving entrepreneurs a fresh start, for example through public information campaigns.
10. Aim to complete all legal procedures to wind up the business in the case of non-fraudulent bankruptcy within a year.
11. Ensure that re-starters are treated on an equal footing with new start-ups, including in support schemes.
12. Ensure that policy results are delivered while minimising costs and burden for business, including by using a smart mix of tools such as mutual recognition and self- or coregulation to achieve policy outcomes.
13. Rigorously assess the impact of forthcoming legislative and administrative initiatives on SMEs ('SME Test') and take relevant results into account when designing proposals.
14. Consult stakeholders, including SME organisations for at least 8 weeks prior to making any legislative or administrative proposal that has an impact on businesses.
15. Use specific measures for small and micro-enterprises, such as derogation, transition periods, and exemptions, in particular from information or reporting requirements, and other tailor-made approaches, wherever appropriate and
16. Consider the usefulness of introducing common commencement dates and annual statements of legislation entering into force.
17. Make use of flexibility provisions aimed at SMEs when implementing EU legislation and avoid 'gold-plating'.
18. Adopt targets of comparable ambition to the commitment to cut administrative burdens by 25% at EU level, where this has not yet been done, and implement them.
19. Ensure swift adoption of the proposals relating to the reduction of the administrative burden in Community legislation.
20. Adopt the Commission proposal which would permit Member States to increase the threshhold for VAT registration to € 100,000.
21. Reduce the level of fees requested by the Member States' administrations for registering a business, taking inspiration from EU best performers.
22. Continue to work to reduce the time required to set up a business to less than one week, where this has not yet been achieved.
23. Accelerate the start of SMEs' commercial operations by reducing and simplifying business liecnces and permits. More specifically, Member States could set up a maximum deadline of 1 month for granting these licences and permits, except in cases justified by serious risk to people or the environment.
24. Refrain from asking SMEs for information which is already available within the administration, unless it needs to be updated.
25. Make sure that a micro-business is not asked to participate in a statistical survey under the responsibility of the state, regional or local statistical office more than once every three years, provided that the needs for statistical and other types of information do not require otherwise.
26. Establish a contact point to which stakeholders can communicate rules or procedures which are considered to be disproportionate and/or unnecessarily hinder SME activities.
27. Ensure full and timely implementation of the Services Directive, including the setting up of points of single contact, through which businesses can obtain all relevant information and complete all necessary procedures and formalities by electronic means.
28. Set up electronic portals to widen access to information on public procurement opportunities below the EU thresholds.
29. Encourage contracting authorities to subdivide contracts into lots where it is appropriate and to make sub-contracting opportunities more visible.
30. Remind contracting authorities of their obligation to avoid disproprtionate qualifications and financial requirements.
31. Encourage constructive dialogue and mutual understanding between SMEs and large buyers through activities such as information, training, monitoring and exchange of good practice.
32. Refocus State Aid policy to better address SMEs' needs, including the design of better targeted measure.
33. Develop financing programmes that address the funding gap between € 100,000 and € 1 million, in particular with instruments combining features of debt and equity, while respecting State Aid rules.
34. Tackle the regulatory and tax obstacles that prevent venture capital funds operating in the Single Market from investing on the same terms as domestic funds.
35. Ensure that the taxation of corporate profits encourages investment.
36. Make full use of funding available in cohesion policy programmes and the European Agricultural Fund for Rural Development, in support of SMEs.
37. Ensure correct application of the mutual recognition principle.
38. Reinforce the SLOVIT problem-solving system to ensure that problems with the exercise of Single Market rights can be resolved informally, speedily and pragmatically.
39. Encourage National Standards Bodies to reconsider their business models in order to reduce the cost of access to standards.
40. Ensure that the composition of the standardisation committees is fair.
41. Invite National Standards Bodies, together with European Standards Organisations, to carry out promotion and information campaigns to encourage SMEs to make better use of standards and provide feedback on their content.
42. Provide SMEs with advisory services including support to defend themselves against unfair commercial practices.
43. Encourage the efforts of SMEs to internationalise and become high growth enterprises including through participation in innovative clusters.
44. Promote the development of SMEs' competences in the research and innovation field by means of, e.g. simplified access to public research infrastructure, use of R&D services, recruitment of skilled employees and training, as allowed for in the new Community Framework for State Aid for research, development and innovation.
45. Open up national research programmes where this is of mutual benefit to SMEs from other Member States and contribute to SMEs' access to trans-national research activities, e.g. through joint programming.
46. Ensure in the implementation of the Cohesion Policy programmes an easy access of SMEs to funding related to entrepreneurship, innovation and knowledge.
47. Support the development of an electronic identity for businesses, to enable e-invoicing and e-government transactions.
48. Encourage business, in particular SMEs and other stakeholders, including procuremebnt authorities, to participate in actions contributing to the speedy implementation of the Lead Market Initiative.
49. Provide incentives for eco-efficient businesses and products (e.g. tax incentive schemes and prioritising subsidies for funding sustainable business) in line with the Community Guidelines on State Aid for Environmental Protection and make use of the simplified approach to environmental aid for SMEs developed in the GBER.
50. Make full use of the around € 2.5 billion allocated in Cohesion Policy programmes for the support of eco-friendly products and processes in SMEs encouraging coaching of SMEs by large companies in order to bring them to international markets.