What does SME stand for? The answer is not as straightforward as you would think.
In fact, this term is commonly misused by business gurus, accountants, and bankers on a regular basis.
So, in this article, we’re going to share what an SME really is in a few of the most popular business jurisdictions around the world.
This article is part of our free series on US LLCs, including the application process for opening a business bank account for an LLC in the United States, which you can click here to access now.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- What Does SME Stand For?
- How Do You Classify Companies as an SME?
- Frequently Asked Questions
- Ready to Open Accounts With Banks in the USA?
What Does SME Stand For?
What SME stands for is “small and medium-sized enterprises”, however how SME is defined does depend on where a business is located. For example, in the United States, the IRS classifies small businesses as those with less than 10mm in assets. In Europe, SMEs are those with less than 50 employees. In Canada, SMEs have less than 250 employees.
So, what SME stands for will depend on where a business operates and who is asking. With this in mind, we’re going to take a closer look at how you can classify companies as SMEs in different jurisdictions below.
However, if you want to tap into the benefits of banking in the USA, including the ability to obtain US business credit cards with an EIN only, you can access our free credit card guide linked here to learn more.
Before diving in any further, if this is your first time visiting GlobalBanks, don’t forget to download your FREE US Banking Starter Guide. It’s designed to help non-residents with opening bank accounts at top financial institutions in the US.
How Do You Classify Companies as an SME?
How you classify companies as an SME will ultimately depend on where the company is registered, operates, and who is conducting the classification. This is because different jurisdictions, financial institutions, and even accounting firms differ in how they classify business categories. Likewise, the industry that businesses operate in can also impact the classification of their company.
Here is a look at the classification for SMEs in the United States, Canada, and the European Union.
What Does SME Stand for in the United States?
In the United States, SMEs are simply referred to as small businesses and have less than 10 million USD in total assets.
What Does SME Stand for in Canada?
In Canada, businesses are classified based on the number of employees, with small businesses having between 5 and 99 and medium businesses having between 100 and 499.
What Does SME Stand for in the European Union?
The European Union classifies businesses in a similar manner to Canada. However, the EU considers small businesses to have less than 50 employees and medium businesses to have less than 250.
As you can see, the specific definition of a small and medium-sized enterprise is blurry even across close economic partners like the United States, Canada, and the EU. In fact, in many cases, small and medium businesses do not even fit into the same category.
Frequently Asked Questions
Below are two of the most common questions we receive from people looking into what SME stands for. If you have further questions you would like to ask our team, don’t hesitate to get in touch.
What Does SME Stand For in Business Ethics?
What SME stands for in business ethics is small and medium-sized enterprises. Depending on the school of thought, SMEs typically have less than 250 employees and an annual turnover of less than 50 million USD. That said, each country, bank, and accountant may have a different classification.
When it comes to business ethics, the important consideration is that most SMEs are too small to dedicate an entire team to managing business ethics, therefore they typically rely on outside advisors and adherence to internal policies to try and guide ethical behavior in the workplace.
What Does SME Mean For a Person?
What SME means when referring to a person is typically “subject-matter expert” or SME for short. Subject-matter-experts are individuals who have established themselves as knowledgeable experts in their field with demonstrated experience over a long span of time. For example, members of the GlobalBanks team are subject matter experts in international banking and international account opening.
Ready to Open Accounts With Banks in the USA?
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When you join, you receive…
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And “yes!” GlobalBanks USA helps foreigners and non-resident individuals open bank accounts.
In fact, GlobalBanks USA even helps non-resident US LLCs and foreign & offshore entities.
To learn more about GlobalBanks USA, visit the product page to see how our team can help you successfully open US bank accounts!
