What are small and medium enterprises?
Published
SME (Small and Medium Enterprises) is a regulatory category the Kingdom defines through the Monsha'at authority using two indicators: annual revenue and headcount. The classification isn't honorary - it determines eligibility for support, financing, and government programmes, and it affects your reporting requirements.
The Saudi classification
Under Monsha'at, the general bands are:
| Category | Annual revenue | Headcount |
|---|---|---|
| Micro | Below SAR 3 million | 1-5 |
| Small | SAR 3 - 40 million | 6-49 |
| Medium | SAR 40 - 200 million | 50-249 |
| Large | Above SAR 200 million | 250+ |
Official ranges should be verified on Monsha'at's site before being relied on - classifications may be updated.
Practical impact
- Support and financing: Kafalah guarantees, subsidised financing, incubators and accelerators, tax or fee reliefs in certain programmes.
- Reporting requirements: small entities apply IFRS for SMEs instead of full IFRS - considerably less complex - see its page.
- Government procurement priority: preferential programmes for national SMEs.
- E-invoicing: integration waves have extended progressively downward until reaching the VAT registration threshold in practice.
Frequently asked questions
How do I know my classification?
By the higher of the two indicators - and don't self-classify. Register with Monsha'at so your official classification, used in government dealings, is issued.
I've crossed the threshold - when does my classification change?
Reviewed periodically based on your submitted data - what matters is tracking the change's impact on the exemptions and support you were using.