Complementing private sector enterprises, Local public enterprises (LPEs) can contribute to the socioeconomic development of a region or city, in particular if they have a sound business plan that ensures competitiveness and financial self-sustainability. Unlike privately owned small and medium-sized enterprises in the sense of the SME definition(1), LPEs are benefiting in many Member States from state guarantees, which facilitate the operation of the business and access to finance. EU State aid rules apply to all undertakings irrespective of their ownership status and should therefore not make it more difficult for LPEs to access funding under state aid schemes than for other undertakings. Just as other enterprises, LPEs may apply for EU funding under many EU funding instruments, including European Structural and Investment Funds and Horizon 2020 and participate in research and innovation activities, particularly in the context of smart specialisation strategies.

(1) Commission recommendation concerning the definition of micro, small and medium-sized enterprises of 6.5.2003 - 2003/361/EC.