New law changes the size classification of SMEs in Spain: what it means for your business

The Council of Ministers has approved the draft law updating SME size thresholds in Spain

The Council of Ministers has approved the draft law that updates the thresholds determining the size of small and medium-sized enterprises (SMEs) in Spain.

This change, which affects accounting criteria and audit obligations, responds to the need to reduce administrative burdens, adapt regulations to inflation, and align with the European Union’s regulatory simplification agenda.

The reform has a direct impact on thousands of companies, which will now be able to operate under a simplified financial reporting regime, freeing resources for what truly matters: growing, investing, and increasing competitiveness.

I want more information

What exactly changes?

The draft law raises the financial limits used to classify companies as small or medium-sized.

New thresholds to be considered a small company

Category	Before	Now (draft law)
Total assets	up to €4M	up to €7.5M
Net turnover	up to €8M	up to €15M
Number of employees	up to 50	no change

This means that more companies will now be considered “small” and can take advantage of the abbreviated financial reporting regime. The direct impact includes:

• Fewer accounting obligations.
• Less documentation to submit.
• Simplified internal processes.

The government estimates that 5,813 companies will benefit from this change.

Impact on audits: fewer companies required to undergo auditing

The law also updates the criteria determining when a company must undergo mandatory auditing. Thresholds rise by 25%, something that has not happened since 2013.

Audit obligation criterion	Before	Now (draft law)
Assets	€2.85M	€3.56M
Net turnover	€5.7M	€7.12M

Result: around 4,300 companies will no longer be required to audit their accounts.

Why this reform matters for companies

The regulatory update has a clear objective: free SMEs from bureaucratic obligations that generate costs and divert resources from strategic areas. The benefits for companies include:

• Lower administrative and audit costs.
• Time savings in accounting and financial management.
• Greater capacity to allocate resources to digitalization, technology investment, hiring, and talent development.

According to the Ministry of Economy, these measures aim to strengthen business competitiveness.

Only advantages? The other side of the debate

Although the reform has been well received by business organizations, it has also generated criticism from the auditing sector and corporate finance experts:

• Some auditors warn of risks in transparency and information for shareholders.
• It is noted that relaxing requirements could reduce the quality of available accounting information.
• There could be increased difficulty in assessing the financial solvency of some companies.

Nevertheless, regulatory simplification has long been a demand from Spain’s business fabric, dominated by SMEs and micro-enterprises.

Recommendations from Adlanter

This reform represents a chance to optimize resources and simplify internal processes. Strategically, however, we recommend that companies do not interpret reduced obligations as a reduction in internal standards.

Do you want to know if your company can apply the abbreviated regime or stop being audited? Contact us here or check our accounting services if you need to adapt your financial statements and want us to evaluate your case.

If you need to adapt your bylaws, corporate structure, or legal documentation, our corporate experts can also assist you.