SME: Small Medium Enterprise – Definition

By | December 25, 2016

There are numerous definition of SME – Small Medium Enterpises. Whatever the definitions are, SMEs has been the driving force of any economy and they play an important part of the development of a nation.

The Organisation for Economic Co-operation and Development (OECD) Definition is as follows:

Small and medium-sized enterprises (SMEs) are non-subsidiary, independent firms which employ fewer than a given number of employees. This number varies across countries. The most frequent upper limit designating an SME is 250 employees, as in the European Union. However, some countries set the limit at 200 employees, while the United States considers SMEs to include firms with fewer than 500 employees. 

Small firms are generally those with fewer than 50 employees, while micro-enterprises have at most 10, or in some cases 5, workers.

Financial assets are also used to define SMEs. In the European Union, a new definition came into force on 1 January 2005 applying to all Community acts and funding programmes as well as in the field of State aid where SMEs can be granted higher intensity of national and regional aid than large companies. The new definition provides for an increase in the financial ceilings: the turnover of medium-sized enterprises (50-249 employees) should not exceed EUR 50 million; that of small enterprises (10-49 employees) should not exceed EUR 10 million while that of micro firms (less than 10 employees) should not exceed EUR 2 million. Alternatively, balance sheets for medium, small and micro enterprises should not exceed EUR 43 million, EUR 10 million and EUR 2 million, respectively.

Source Publication:

OECD, 2005, OECD SME and Entrepreneurship Outlook: 2005, OECD Paris, page 17

Statistical Theme: Industry and services statistics

Created on Tuesday, December 04, 2001

How about Definition of SMEs around the World In Context of Asia Pacific Region as we are discussing the regions around Singapore, the definition is as follows:

Reference from:
Reference from:
Hong Kong
Manufacturing Less than 100 persons
Non Manufacturing Less than 50 persons
Reference from:
Small and Medium Enterprises include three categories:
1. Manufacturing Business including industrial production, mining, agriculture production particularly agricultural processing
2. Trading Businesses: wholesale, retail, import, and export
3. Service Businesses: businesses supporting manufacturing, trading, Hotels and Tourist related industries, repair, transport and beauty salons, etc.
Reference from:
Other Countries
List of Definition of SMEs around the world can be seen in general at the following link:

What About Singapore?

The 180,000 local SMEs make up 99% of the enterprises in Singapore and contribute to nearly half of the GDP while employing 70% of the workforce.

Singapore Definition of SMEs: "Company’s annual sales turnover of not more than S$100 million OR employment size not more than 200 workers"

Reference  from: Fact Sheet on SMEs

Understanding  about the role of SMEs in Singapore – Spring Singapore and New SME's Definition and Incentive Criteria. 

Key Resources for Singapore SMEs: SME Portal