EU Commission proposes new measures to cut business costs by €400 million annually

On 21 May 2025 the European Commission introduced its Fourth Simplification Omnibus Package, aiming to cut administrative costs by €400 million annually across the EU. This initiative is part of a broader strategy to streamline EU regulations and ease compliance, especially for mid-sized businesses.

A key element of the proposal is the introduction of a new business category: “Small Mid-Caps” (SMCs). Companies with fewer than 750 employees and either up to €150 million in turnover or €129 million in assets will now qualify as SMCs. These firms gain access to SME-style regulatory relief, including simplified GDPR record-keeping and easier capital market access. Nearly 38,000 companies could benefit, smoothing the transition between SME and large enterprise status.

The eight legal instruments are affected by the proposed amendments: General Data Protection Regulation; Regulation on Protection against Dumped Imports; Regulation on Protection against Subsidised Imports; Markets in Financial Instruments Directive; Prospectus Regulation; Batteries Regulation; Critical Entities Resilience Directive; and the Fluorinated Greenhouse Gas Regulation.

SMCs will gain access to SME-specific regulatory reliefs, including:

F-Gas Portal Exemption: Low-volume traders, such as small car dealerships importing/exporting vehicles with HFC-based air conditioning, will be exempt from F-Gas Portal registration, relieving around 10,000 companies of this obligation in 2026.
Risk-Based GDPR Records: SMCs and organisations with fewer than 750 employees will only need to keep data processing records if their activities pose a “high risk” to individuals, shifting compliance to a more risk-driven approach.
Digital Product Compliance Documentation: Mandatory digital submission and distribution of product compliance documents will replace paper-based requirements, streamlining processes and strengthening cross-border enforcement.
Extended Battery Supply Chain Due Diligence: The deadline for battery supply chain due diligence under the Batteries Regulation is postponed (from 2025) to 2027, with binding guidelines to be published a year in advance. This also offers more time for the setting up of third-party verification bodies.

These measures form part of the Commission’s broader goal to reduce administrative costs by 25% overall and by 35% for SMEs by the end of its current mandate. Previous Omnibus packages targeted sustainability reporting, due diligence, and agricultural simplification. The next package, expected in June, will focus on the defence sector, with further initiatives planned for chemicals and digital regulation

For businesses potentially impacted by these changes, legal counsel should assess eligibility for new exemptions and ensure timely compliance with revised obligations.