On August 7, 2025, the Turkish government announced a major change to how small and medium-sized enterprises (SMEs) are defined. The update was published in the Official Gazette (No. 32979) and took effect immediately.

This change raises the financial limits used to decide which businesses qualify as SMEs. It could open up new opportunities for many companies in Turkey.

What Changed in the SME Regulation?

According to Presidential Decree No. 10182, the Turkish government has increased the financial threshold for SMEs.

Previously, a business was considered an SME if its annual revenue or total assets were below TRY 500 million. Now, this limit has been raised to TRY 1 billion.

This change was made in two important parts of the regulation:

1. Article 4(1)(b): Now defines SMEs as businesses with annual turnover or total assets up to TRY 1 billion, instead of the old TRY 500 million limit.
2. Article 5(1)(c): Updates the definition of “medium-sized enterprises” to include those with turnover or assets up to TRY 1 billion.

Why This Update Matters

This update reflects the impact of inflation and economic changes in Turkey. By raising the limits, the government is allowing more businesses to be officially recognized as SMEs.

Being classified as an SME gives companies access to various support programs, such as:

1. Government grants
2. Tax reductions
3. Easier access to loans
4. Priority in public procurement
5. Employment-related incentives

For businesses that previously earned just over the old limit, this update means they might now qualify for these benefits.

What Is the SME Regulation in Turkey?

The SME Regulation sets the rules that decide what counts as a small, medium, or micro business in Turkey. It is used by all public and private institutions when they assess eligibility for SME-related support programs.

Who Does This Regulation Apply To?

It applies to all businesses in Turkey—public or private—when it comes to things like:

1. Accessing government incentives
2. Receiving innovation grants
3. Participating in special procurement projects
4. Qualifying for employment support schemes

Updated SME Definitions (as of August 2025)

To be classified as an SME, a business must also meet ownership and independence rules, such as not being more than 25% owned by a larger company (with some exceptions).

Impact on Employment in Turkey

While this regulation is not directly about labor laws or wages, it can still affect employment.

1. SMEs often receive government incentives to hire more workers.
2. Companies that newly qualify as SMEs may gain access to programs that support job creation, such as wage subsidies or training programs.

By expanding the SME definition, more businesses can now take advantage of these employment-related benefits.

Conclusion

Turkey’s updated SME regulation is a significant move that reflects today’s economic realities. For business owners, investors, and HR professionals, it's important to understand whether a company now qualifies as an SME—because that status can unlock many opportunities, especially in funding and employment support.