What is an SME Certificate? How to Obtain It?

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The majority of businesses in Turkey are SMEs, or Small and Medium-Sized Enterprises (SMEs). SMEs are the backbone of the national economy, creating jobs, conducting production, and undertaking a significant portion of trade. The SME certificate is crucial for these businesses to benefit from government support, participate in incentive programs, and obtain certain tax advantages.

So, what is an SME certificate, who can obtain it, how to obtain it, and what advantages does it offer businesses? Let's take a step-by-step look.

What is an SME?

SME is an abbreviation for Small and Medium-Sized Enterprise. The definition of an SME in Turkey is determined by the "Regulation on the Definition, Qualifications, and Classification of Small and Medium-Sized Enterprises."

According to this regulation, businesses are classified according to criteria such as the number of employees and annual net sales revenue (or total financial balance sheet).

SME Classification:

1. Micro Enterprises:

• Businesses with 1 to 9 employees

• Annual net sales revenue or financial balance sheet totals up to 10 million TL.

2.Small Enterprises:

• Businesses with 10 to 49 employees

• Annual net sales revenue or financial balance sheet totals up to 100 million TL.

3.Medium-Sized Enterprises:

• Businesses with 50 to 249 employees

• Annual net sales revenue or financial balance sheet totals up to 1 billion TL.

If your business falls within any of these limits, you are considered an SME and can obtain an SME Certificate.

What is an SME Certificate?

The SME Certificate is a document that officially certifies that a business qualifies as an SME based on the criteria above.

This document, approved by KOSGEB (Small and Medium Enterprises Development and Support Administration), certifies that the business meets the SME definition.

In other words, the SME Certificate is a verification document that demonstrates that a business:

• Is micro, small, or medium-sized;

• Is legally defined as an SME;

• Is eligible to apply for government support.

What is the Benefit of an SME Certificate?

While many businesses think the SME certificate is merely a formality, it is actually very important in many ways. Here are the main advantages of the SME Certificate:

1. Opportunity to Benefit from Government Support

Businesses must have an SME certificate to benefit from grants, loans, and incentives provided by KOSGEB, the Ministry of Trade, and other public institutions.

For example:

• KOSGEB entrepreneurship supports,

• Export supports,

• Digital transformation and R&D grants,

• Interest-free loan programs, and similar opportunities are available only to businesses with SME status.

2. Tax Advantages

In some periods, the government may grant special tax deductions or exemptions to SMEs. To benefit from these benefits, a business must hold an official SME certificate.

3. Easy Access to Financing

Banks and financial institutions offer special loan packages or low-interest support to SMEs. When applying for these loans, the SME certificate is the most important document proving the business's scale.

4. Requirement for Tender and Project Applications

In public tenders or private project support, businesses may be asked to prove their SME status. In this case, the SME certificate enables the business to participate in the tender or complete the project application.

5. Business Reputation and Reliability

The SME certificate demonstrates that the business operates within legal boundaries and is recognized by official institutions. This increases the credibility of the business in the eyes of suppliers and customers.

Where and How to Obtain an SME Certificate?

There is no physical application required to obtain an SME certificate. All transactions are completed online through KOSGEB's official website.

Steps to Obtain an SME Certificate:

1. Registering with the KOSGEB Database

The first step to obtaining an SME certificate is registering your business with the KOSGEB database.

To register:

• Go to https://www.kosgeb.gov.tr.

• Click on the "e-SME" section on the homepage.

• Log in to the "SME Information System."

You can log in to the system with your e-Government password.

2. Entering Business Information

After logging in to the system, you must accurately enter your business's activity information, number of employees, annual turnover, and contact information. This information is used to determine SME status.

3. Completing the SME Declaration

One of the most important steps is the SME Declaration.

This form includes the following data:

• Trade registry number

• Tax number

• Number of employees

• Turnover or balance sheet information.

After completing the SME declaration, the system automatically determines the business's category (micro, small, medium).

4. Approving the Declaration

After all information is entered correctly, click the "Approve SME Declaration" button. This process generates your SME document.

5. Downloading the SME Document

Following the approval process, the document can be downloaded in PDF format by selecting the "Create SME Document" option in the "SME Information System." This document certifies your business's official SME status and can be printed and used as needed.

What is an SME Declaration?

The form required to obtain an SME certificate is called the SME Declaration. This declaration contains the official information of the business and must be updated annually.

It is important to note that providing incorrect information on the SME declaration will invalidate the declaration and may result in the business being disqualified from receiving support. Therefore, it is crucial that the information declared is accurate, up-to-date, and supported by documentation.

SME Certificate Validity Period

The SME Certificate is valid for one year. This means that the SME Declaration must be updated annually to confirm the business's continued SME status.

If the declaration is not updated:

• The SME certificate expires,

• Applicants cannot apply for KOSGEB support,

• Government incentives cannot be utilized.

Therefore, it is crucial to renew the declaration annually.

Required Information for the SME Certificate

No additional documentation is required to obtain the SME certificate, but the system will require you to enter certain information accurately. These include:

• Tax registration information

• Trade registry number

• SSI employee count

• Annual balance sheet or income statement data

• Contact information (address, phone number, email)

This information is automatically verified through the Revenue Administration, SSI, and Trade Registry systems.

Who is Eligible for an SME Certificate?

The following business types are eligible for an SME certificate:

• Limited and joint-stock companies

• Sole proprietorships

• Cooperatives

• Sole proprietorships

• Tradesmen and artisans' businesses

As long as the business falls within the above-mentioned employee count and turnover limits.

Is the SME Certificate Paid?

No. The SME Certificate is completely free. There is no fee for transactions made through KOSGEB's online system. While some consulting firms offer paid services, businesses can generate documents directly and free of charge through e-Government.

Things to Consider When Obtaining an SME Certificate

• Information Must Be Up-to-Date: The data used in the SME Declaration must be consistent with the previous year's financial statements.

• Accuracy is Important: Inaccurate or incomplete declarations can result in the certificate being invalidated and the support being revoked.

• Annual Renewal is Mandatory: The SME Declaration must be renewed annually to maintain its validity.

• Authorized Person Entry: The declaration must be approved by the official authority of the business.

Main Support Programs Available with an SME Certificate

After obtaining an SME certificate, businesses can apply for support programs in a variety of areas. Some of these include:

• KOSGEB Entrepreneurship Support: Grants and interest-free loans provided to entrepreneurs establishing new businesses.

• R&D and Innovation Support: Support for product development, software production, and technological innovation projects.

• SME Financing Support: Low-cost loans with interest or dividend support.

• Export Support: Support for international trade fair participation, promotional expenses, or export consultancy.

• Digital Transformation Support: Support for e-commerce, e-invoicing, software, and digital infrastructure investments.

Conclusion

The SME Certificate is not just an official document; it's a gateway for businesses to government support and new opportunities. This certificate allows businesses to access financing more easily, increase their competitiveness, and gain significant growth advantages.

If you're a business owner and haven't yet obtained an SME certificate, you can create one in just a few minutes by logging into the KOSGEB e-SME system and begin benefiting from government support immediately.