Ukrainian Business Continues Eurointegration: Government Approves Draft Law on SMEs
The Cabinet of Ministers has approved the draft law “On Amendments to Certain Laws of Ukraine Regarding the Definition of Business Entities”. The document harmonises the criteria for defining Ukrainian micro, small, and medium-sized enterprises with EU standards and removes barriers to SME access to European support programmes.
Why is this important?
Outdated SME criteria created several issues:
- complicated business access to grant and credit programmes;
- required additional status verification for partnerships within the EU;
- facilitated the artificial fragmentation of large businesses to obtain benefits.
What does the draft law change?
The new law defines three European classification criteria: number of employees, annual turnover, and balance sheet total. The thresholds correspond to EU standards:
- micro-enterprise: up to 9 employees inclusive, up to €2 million in turnover or assets;
- small enterprise: up to 49 employees, up to €10 million in turnover or assets;
- medium enterprise: up to 249 employees, up to €50 million in turnover or up to €43 million in assets.
What’s next?
Following the Government’s approval, the draft law will be submitted to the Verkhovna Rada of Ukraine for consideration.
What is the role of BRDO?
Together with the Ministry of Economy of Ukraine, the Better Regulation Delivery Office (BRDO) participated in the development of this document, providing legal support.
BRDO systematically works on creating favourable conditions for small and medium-sized businesses through deregulation, improving regulatory policy, and harmonising Ukrainian legislation with EU approaches.
During 2023-2025, within the EU4Business: SMEPIS project, the Better Regulation Delivery Office worked on reforms aimed at deregulation, digitalisation, and preparing Ukraine for EU integration.
In 2023, the BRDO team joined the government’s Interagency Working Group on Accelerated Review of State Regulation of Economic Activity (IWG), providing analytical and legal support to simplify business conditions.