21st May 2025, the European Commission published the Fourth Simplification Omnibus Package (Omnibus IV), a major initiative to cut red tape and improve the EU’s regulatory environment. Focused on boosting competitiveness, the package introduces targeted changes to reduce administrative burdens—particularly for SMEs and, for the first time, introducing the concept of small mid-cap companies (SMCs). It supports digitalisation, streamlines compliance, and aims to make EU rules simpler, fairer, and more business-friendly.

Today the European Commission published the Fourth Simplification Omnibus Package (Omnibus IV). This initiative is part of the Commission’s wider effort to enhance the competitiveness of European businesses by reducing unnecessary regulatory burdens and making EU legislation more proportionate and easier to navigate.

Omnibus IV was announced as part of the EU’s Single Market Strategy and reflects recent recommendations made in high-level reports by Mario Draghi and Enrico Letta. The overarching aim is to improve the EU’s regulatory framework to better support innovation, growth, and the twin digital and green transitions. A major objective is to achieve a 25% reduction in administrative burdens across EU legislation, with a specific target of at least 35% for small and medium-sized enterprises (SMEs).

One of the most notable elements of this package is the formal recognition of small mid-cap companies (SMCs) as a distinct category of business. These are companies that fall between SMEs and large enterprises, typically employing up to 750 people. Under the current system, these businesses are often treated as large companies and therefore subject to disproportionate compliance obligations. Omnibus IV proposes to extend to SMCs a number of exemptions and simplified procedures that are already in place for SMEs, thereby creating a more supportive environment for companies as they scale up.

Several concrete changes are worth highlighting.

• Under the General Data Protection Regulation (GDPR), SMCs will now benefit from the same exemption as SMEs in relation to record-keeping obligations for data processing activities. In practical terms, this means that unless their data processing is likely to result in a high risk to individuals, these companies will no longer need to maintain extensive internal records. This adjustment alone is expected to save businesses approximately €66 million annually.

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• Another significant proposal concerns capital market access. SMCs will be allowed to issue a simplified EU Growth Issuance Prospectus, which is much less burdensome than a full prospectus. This should lower the cost of public fundraising and make it easier for these companies to access market financing. According to the Commission’s estimates, the total cost savings resulting from changes to the Prospectus Regulation and MiFID II could amount to over €12 million per year for this category of companies.

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• In the area of sustainability compliance, the Commission is proposing that SMCs be exempt from due diligence and supply chain tracing requirements under the Batteries Regulation, just as SMEs currently are. This change could result in annual savings of around €40,000 per company. In addition, the frequency of reporting obligations under the Batteries Regulation will be reduced for all companies—from annually to once every three years—easing the administrative burden without lowering the level of ambition.

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• Omnibus IV also proposes broader improvements to the EU’s regulatory framework. For example, the Commission is accelerating the shift to digital processes across a wide range of product-related legislation. Where companies were previously required to provide documentation or instructions in paper form, digital formats will now be accepted or even preferred. This measure is expected to reduce annual administrative costs by at least €300 million across the EU. Consumers will also benefit, gaining easier and more inclusive access to information, including digital updates and multilingual options.

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• Furthermore, the package introduces the concept of common specifications across more areas of EU product law. In situations where harmonised standards are not available, these common specifications will provide companies with a clear, legally recognised pathway to demonstrate compliance with EU rules. This should improve legal certainty and eliminate the need for more complex and costly conformity assessment procedures.

More information is available below - EU Commission Q&A.