Summary 

The strengthening of the role of small and medium enterprise (SME) is clearly reflected in the characteristic features of the economy of postindustrial states. This sector of business is seen as the guarantor of the country's social status - the formation of the middle class, the creation of new jobs, know-how and stability. Thus the question of small and medium enterprise(SME)  development is not just a topical issue for a country like Georgia.

 In Georgia for many years, the recessionary situation of small businesses is mainly conditioned due to the fact that the country has not yet been created unified infrastructure to support small and medium businesses,as it is in EU countries.

In line with the Association Agreement with the EU, reforms have been implemented in Georgia, efforts are underway to develop new approaches and approaches to the development of the small and medium business, however, small and medium enterprise (SME) still face difficulties in terms of growth and development. Not enough attention has yet been paid to the implementation of the principles set out in the Small Business Act. An important factor for the development of small business is the legislative environment in the country that has not yet been established in Georgia.

The aim of the study is to show how close modern post-Soviet Georgia is to the EU in terms of criteria for determining the status of business forms (micro, small, medium and large). What kind of  results have been obtained of recent reforms in SME development.

The Eastern Partnership and the European Association for Action Programs outline a number of strategic directions for Georgia, one of which is SME development.

The response to this challenge is that in 2016 the Government of Georgia developed a “Georgia SME Development Strategy 2016-2020”. The strategy is based on the European Small Business Act and its basic principle of Think Small First. The main objective of the strategy is to enhance the competitiveness of the SME sector, which will be an important basis for sustainable economic growth.

Before taking any action in the field of business development, it is necessary to determine the status of business forms (micro, small, medium and large) (criteria and their statistical values), as well as their development indicators.

In the EU, the European Commission has defined the status (criteria and their statistical values) for all business forms (micro, small, medium and large), it has been in force since 1 January 2005 and is still in force today.

Criteria for determining the status of micro, small, medium and large business forms in Georgia are not yet complete. According to the statistic methodology, micro business is not defined at all; the Tax Code of Georgia defines the status of micro business without right of employment with annual income less than 30 thousand GEL. According to the Law on Accounting, Reporting and Auditing, a micro business has the right to employ up to 10 people, with annual income not exceeding GEL 30,000 instead of GEL 2 million. Such a radically different approach to benchmarking cannot have a positive impact on micro business development.

Georgia is lagging behind the post-Soviet countries. For example, micro-businesses employing up to 10 people do not appear in the Georgian economy at all (the statistics department does not recognize this figure), while in Poland the share of micro-enterprises is 41% of the total number of enterprises.

Reforms aimed at improving the role of SMEs in 2016-2018 have not yet yielded any particular results. In the post-reform period, the increase in the share of small and medium-sized businesses in the business sector would be a positive result, while for large businesses it would be the reduction. But reality shows the opposite. We think that the low results of the reform are also due to the lack of assessment of the impact of the new changes (reform) on the business sector, especially on the development of small and medium-sized enterprises, ie the expectations that these changes may have. However, the European Small Business Act provides for the existence of a RIA (Better Regulation assessment) system to better regulate the entrepreneurial environment and to accelerate the introduction and reduction of disproportionate burdens on SME.

In order to improve the situation in the business sector, it is necessary to: Create a supportive micro and small business infrastructure, relevant institutions, which include micro, small and medium business development regulation: law, education, incentives, finance etc.The European model of small business policy and the ten principles of the Small Business Act should be accelerated;Frequent changes to the legal (or non-judicial) mechanism for regulating micro, small and medium-sized businesses in various laws (or other legal documents), create contradictions, complicate proceedings, and often penalize. It is advisable to adopt the Law on Small Business, which will regulate all issues of micro, small and medium business development. The latter should define the criteria, statistical values ​​and indicators of their development for the relevant categories of business (micro, small, medium and baked) enterprises.

Thus, the paper discusses the legal materials of the legislature defining the criteria for SMEs in modern post-Soviet Georgia and the methodology for calculating the key indicators of Sakstat's business statistics.The paper shows that the criteria for micro, small and medium-sized businesses are not yet fully developed, and their statistical values, as well as some statistical indicators of SME growth indicators, are summarized and opinions are expressed for the purpose of further development of this sector of business.