What is an SME and what legal conditions does it fulfil in Spain?
In Spain, SMEs represent a very high percentage of our productive fabric. Most of the companies that operate in our country are SMEs. It is important to know what an SME is, what its characteristics are and the advantages that this type of company has.
What is an SME in Spain
A company is considered an SME (Small and Medium enterprise) if it meets certain conditions that are defined according to its size, turnover and number of employees. The conditions that an SME in Spain must meet are as follows:
- Number of employees: An SME in Spain must have less than 250 employees. This number includes both full-time and part-time employees, but excludes self-employed workers and temporary employees if their employment relationship is not continuous.
- Annual turnover: The annual turnover of an SME in Spain must not exceed EUR 50 million. This limit refers to the total income that the company generates from its commercial and service activities.
- Balance sheet total: The balance sheet total of an SME must not exceed EUR 43 million. This value refers to the total assets and liabilities of the company recorded on its balance sheet.
- Independence: The enterprise must be independent, which means that it cannot be more than 25% controlled by one or more enterprises that do not meet the SME criteria. In other words, the majority of the company’s shares or participations must be in the hands of its owners or partners, who are considered SMEs.
- Duration of the company: The company must have a history of business activity, which varies according to Spanish law. Generally, the company is required to have been in operation for at least one year.
- Accounting autonomy: The SME must keep its own accounts and not be linked to another company that controls it.
- Location: The company must be registered and operating in Spain.
Fulfilling these conditions is important, as SMEs can access different types of financial and fiscal support, as well as specific subsidy and aid programmes aimed at boosting their development and competitiveness. SMEs play a fundamental role in the Spanish and European economy, these conditions are designed to recognise and support their importance.
Incentives for SMEs in Spain
In Spain there are several incentives and support measures aimed specifically at SMEs with the objective of promoting their growth, development and competitiveness. Some of the most important incentives are
- Reduced corporate tax rate: SMEs can benefit from a reduced corporate tax rate, which is 25% for the first €300,000 of profits and 30% for the excess of this amount. In addition, newly created companies can benefit from a rate of 15% in the first years of activity.
- Tax deductions for R&D&I: Companies that invest in research, development and innovation activities can access tax deductions that allow them to reduce their tax burden. This encourages investment in technology and improves competitiveness.
- Programme to promote youth employment and the long-term unemployed: Incentives are offered to SMEs that hire young people under 30 and the long-term unemployed, such as reductions in social security contributions.
- Aid for internationalisation: The expansion of SMEs into international markets is promoted through subsidies and financial support programmes for export and foreign trade activities.
- Support for investment in fixed assets: There are aid programmes and subsidies for SMEs that invest in fixed assets, such as machinery, technology or equipment, in order to improve their productive capacity.
- Training and advice programmes: SMEs can access specialised training and advice programmes to improve their management, competitiveness and business skills.
- Facilitating access to financing: Specific credit and financing lines are promoted for SMEs through institutions such as the
- Official Credit Institute (ICO) and the European Investment Fund.
- Emprendetur Programme: This programme is aimed at boosting tourism in Spain and offers financing and support to SMEs operating in this sector.
- Regional incentives: In addition to national programmes, many Autonomous Communities offer additional incentives and aid to SMEs operating in their territory.
These incentives aim to promote the growth and competitiveness of SMEs in Spain, thus contributing to the economic development of the country. It is important for businesses to keep themselves informed about the support opportunities available, at Asesoría Orihuela Costa we are specialists in SME consultancy. If you want the best support, contact Asesoría Orihuela Costa and work with the right team.
