The Eastern Partnership (EaP) has 6 partner countries: Armenia, Azerbaijan, Belarus, Georgia, the Republic of Moldova and Ukraine.
Ukraine’s legal definition of SMEs, introduced in 2012, remains unchanged. It defines micro, small and large enterprises based on employment and turnover criteria, which is broadly in line with the EU definition. When compiling statistics on SMEs, the State Statistics Service of Ukraine (Ukrstat) uses both the existing legal definition of SMEs and one based on employment only (State Statistics Service of Ukraine (Ukrstat), 2017[9]) to allow for comparability with EU countries.
According to the 2018 data, SMEs comprise more than 99.8% of all enterprises in the business economy, with microenterprises constituting 93.6% of them. SMEs account for 68% of total business employment and generate up to 60% of value added in the business sector, which is broadly comparable with the SME performance in the EU.
A new definition of SMEs was introduced in December 2018 with the objective of eliminating differences in the methodologies applied by the State Statistical Committee and the Ministry of Taxes. The new definition distinguishes between micro, small, medium and large enterprises, and is partially aligned with the EU definition, synchronising the criteria related to the number of employees.
The country’s SME definition has remained unchanged since 2010: SMEs are exclusively defined by the number of employees and are divided into individual entrepreneurs, micro (up to 15 employees), small (16-100 employees) and medium enterprises (101-250 employees) . This definition is not used consistently in legislation; for example, turnover determines eligibility for some tax advantages.
The SME definition is based on employment size and turnover customized to Georgia’s specificities and is used for the compilation of official statistics on the SME sector. Medium enterprises employ up to 100 persons annually and have a turnover up to GEL 1,500,000 annually. Small enterprises employ up to 20 persons annually and have an annual turnover up to GEL 500,000.
The new definition of SMEs adopted in 2016 is in line with EU and international good practices. It uses employment, turnover and balance sheet criteria to determine whether a company is a micro, small or medium enterprise. While the employment criteria are consistent with the EU definition, thresholds for turnover and assets are lower in Moldova, reflecting Moldova’s lower per capita incomes.
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