Demand for state support may increase by UAH 20 billion: how the new law will change things for entrepreneurs
29 January 20:50
The Cabinet of Ministers has approved a draft law that changes the approach to defining micro, small, and medium-sized enterprises (SMEs) in Ukraine. The government says that the new rules are fully in line with European Union standards and should simplify access for Ukrainian companies to international support programs, according to "Komersant Ukrainian".
The bill amends a number of regulations and, according to its authors, removes barriers to attracting grants, preferential financing, and investments.
What exactly is changing
The document provides for a transition to European criteria for classifying enterprises, which take into account three indicators:
- number of employees,
- annual income,
- balance sheet value of assets.
According to the proposed changes:
- micro-enterprises — up to 9 employees and up to €2 million in revenue or assets;
- small enterprises — up to 49 employees and up to €10 million in revenue or assets;
- medium-sized enterprises — up to 249 employees and up to €50 million in income or up to €43 million in assets.
The government emphasizes that these thresholds are fully in line with EU standards, which will allow Ukrainian businesses to avoid additional procedures to confirm their status for participation in European programs.
Why was it necessary to change the rules?
The Ministry of Economy explains that the previous classification system was outdated and created several problems.
First, Ukrainian companies often lost access to international grants and credit programs because their SME status was not automatically recognized by European partners.
Second, there was a practice of artificially splitting up businesses, where large companies divided their structure into smaller legal entities in order to take advantage of SME benefits.
The new draft law provides that the indicators of related companies will be aggregated, which should make such schemes impossible.
Restrictions for state-owned enterprises
According to the document, enterprises with a state share of more than 25% will lose their SME status after the end of martial law. A transition period is provided for them.
The government explains this by the need to ensure fair competition and direct support resources specifically to the private sector.
What opportunities are opening up for business
The Cabinet of Ministers believes that harmonization with EU standards will mean:
- automatic recognition of Ukrainian SMEs in EU countries,
- simplified access to grants, loans, guarantees, and innovation programs,
- expanded opportunities for exports and international partnerships.
At the same time, the ministry predicts that demand for state business support programs in Ukraine could grow by UAH 5–20 billion annually.
The initiative comes amid other economic policy reforms
Earlier, the government expanded the “Affordable Loans 5-7-9%” program to increase the energy sustainability of businesses, and is also discussing changes to VAT administration for single tax payers.
Separately, there’s an ongoing discussion about the IMF’s requirements for mandatory registration of VAT payers for the simplified system starting in 2027.
After approval by the government, the bill must be considered by the Verkhovna Rada. If adopted, the new criteria will become part of the adaptation of Ukrainian legislation to EU standards within the framework of economic integration.
