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SME Definition Updated

23-Mar-2011

The Ministry of Trade and Industry announced on 22nd March 2011 the new definition of Small & Medium-sized Enterprises (SME) in Singapore.

From 1 April 2011, SME will be defined as businesses with annual sales turnover of not more than $100 million or employing no more than 200 staff. Currently, SMEs are defined as enterprises with fixed asset investments of $15 million and below for those in manufacturing, and employment size of 200 and below for non-manufacturing enterprises.

"The new definition reflects the changing economic landscape and diversified profile of businesses where tangible fixed asset may not adequately reflect the size or stage of development of a company," said Mr Png Cheong Boon, chief executive of SPRING Singapore.

"It helps us to better focus and allocate relevant resources, including grants to assist the SMEs. By using sales turnover or employment, we are also more aligned with global practices and this facilitates benchmarking."

The modification will ensure that businesses that meet the new definition of "small" - either by sales or employee strength - will be able to qualify for support, regardless of their fixed assets. The change is also in line with international benchmarks in Asia-Pacific and Europe.

While SMEs definitions vary from country to country, they commonly incorporate revenue and employment criteria, SPRING said in a statement.

The new definition will slightly increase the number of SMEs here to 154,100, from 153,400 now. With this change, 99.3 per cent of enterprises in Singapore will get classified as SMEs. Conversely, some large manufacturing operations that currently qualify as SMEs because they are "asset-light" will cease to be eligible.



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