The Ukrainian government has simplified the rules for small and medium-sized businesses: what the new bill changes

The Cabinet of Ministers of Ukraine has approved a bill that significantly modernizes the approaches to defining small and medium-sized businesses (SMEs) and opens up new opportunities for businesses to receive grants and soft loans. The information was published on the government portal.

The bill, entitled “On Amendments to Certain Laws of Ukraine on Defining Business Entities,” harmonizes the criteria for classifying enterprises with European Union standards. This will allow Ukrainian companies to confirm their status in international support programs in a simplified manner.

The Ministry of Economy, Environment and Agriculture explains that previously, due to outdated criteria, Ukrainian companies lost the opportunity to attract grants, soft loans and investments. Large enterprises sometimes artificially fragmented their businesses in order to receive benefits provided to SMEs. The new law eliminates these problems.

The document introduces three European criteria for classifying enterprises: number of employees, annual revenue and book value of assets. The thresholds fully comply with EU standards. In particular: micro-enterprise - up to 9 employees and up to €2 million in revenue or assets, small enterprise - up to 49 employees and up to €10 million in revenue or assets, medium-sized enterprise - up to 249 employees, up to €50 million in revenue or up to €43 million in assets.

It is important that the indicators of related companies will be summed up, which makes it impossible to artificially split the business. Enterprises with a state share of more than 25% will lose their SME status after the end of martial law, with a transition period.

For Ukrainian enterprises, this means automatic recognition of SME status in the EU and full access to European support programs - grants, soft loans, guarantees, innovation and export projects. The reform is expected to stimulate demand for state support programs by an additional UAH 5–20 billion per year, increase investment, and facilitate business entry into European markets.

The ministry emphasizes that the new rules also ensure a level playing field: resources intended for SMEs will no longer be able to be used by large companies. The bill opens up prospects for the stable development of small and medium-sized businesses in Ukraine and integration into European economic programs.