Do small businesses have to comply with GDPR?
Asked by: Prof. Lew Pagac PhD | Last update: January 30, 2026Score: 4.3/5 (4 votes)
Yes, small businesses must comply with GDPR if they process personal data of individuals in the European Union (EU), regardless of the business's size or location, as there's no small business exemption; compliance involves core principles like lawful data processing, transparency (privacy notices), and respecting user rights (like opt-outs), though some record-keeping requirements are eased for smaller entities.
Does GDPR apply to small businesses?
Yes, small businesses must adhere to the data protection principles, which include the same eight rights that apply to large businesses.
What is the minimum size for companies to comply with GDPR?
What is the minimum company size for GDPR? GDPR does not specify a minimum company size. It applies to all organizations, including small and medium-sized enterprises (SMEs), that handle the personal data of individuals in the EU, irrespective of their size or turnover.
Is GDPR compliance mandatory in the USA?
Yes, the EU's GDPR (General Data Protection Regulation) applies to many businesses in the U.S., not just those in Europe, due to its "extra-territorial" reach, meaning it governs U.S. companies that offer goods/services to, or monitor the behavior of, individuals in the EU, or have an establishment (like a branch or employees) in the EU. U.S. companies must comply if they process data of EU residents, even if they have no EU presence, by implementing principles like consent, transparency, and data minimization, similar to U.S. state laws like CCPA but with stricter opt-in consent requirements.
Are GDPR rules not applicable to micro enterprises?
It is a common misconception that small businesses are exempt from the GDPR. However, the fact is that GDPR applies to all businesses, regardless of their size. The regulation does not provide exemptions based on the number of employees or the scale of operations.
Does Your Small Business Need To Be GDPR Data Compliant? - Small Biz Success Hub
Who does the GDPR not apply to?
Some of the key exemptions from GDPR compliance include personal or household activities, government agencies and law enforcement, and the processing of personal data by Member States.
Is GDPR applicable to US companies?
Are US companies subject to GDPR? Yes, the GDPR can apply to businesses in the US or any business outside the European Union. As per Article 3 of the GDPR, the territorial scope of the GDPR applies to businesses regardless of whether the processing takes place in the European Economic Area (EEA).
What is the closest law to GDPR in the USA?
The US equivalent of the GDPR is the CCPA or California Consumer Privacy Act. It was inspired by the GDPR, and both laws protect the personal data of consumers.
Do all companies have to comply with GDPR?
What size of company must comply with GDPR? Generally, companies with 250 employees or more are required to comply with GDPR rules. However, GDPR is still relevant for small businesses with fewer than 250 employees if they process personal data as a regular part of their business operations.
What happens if I don't comply with GDPR?
83(4) GDPR sets forth fines of up to 10 million euros, or, in the case of an undertaking, up to 2% of its entire global turnover of the preceding fiscal year, whichever is higher. Especially important here, is that the term “undertaking” is equivalent to that used in Art.
Who is exempt from GDPR?
Some of the most common exemptions include businesses that do not process personal data of living persons, businesses that have no connection with the European Union, derogations for businesses with less than 250 employees, or data processing primarily for personal/household activities.
Do small companies need a DPO?
A small organisation is unlikely to need a data protection officer (DPO). Data protection law says you must appoint a DPO if: you're a public authority or body (except for courts acting in their judicial capacity);
Can a company be fined up to 1 million under GDPR?
What is the maximum GDPR fine? Under the General Data Protection Regulation (GDPR), the highest penalties can reach up to €20 million or 4% of the annual worldwide turnover from the previous fiscal year, whichever is greater.
Does a small business need a privacy policy?
You are not exempt from the need for a privacy policy because your business is small. Any business that shares and uses information needs to have a privacy policy. If you share personal information without your customers' knowledge, you could infringe on local laws.
Who is exempt from the data protection fee?
If you do not process personal information at all (or you do but not via a computer or other automated system), you are exempt and will not need to pay the fee. You are exempt if you are only processing personal information for any of the reasons below: Staff administration. Advertising, marketing and public relations.
How to explain GDPR in simple terms?
GDPR is an EU law with mandatory rules for how organisations and companies must use personal data in an integrity friendly way. Personal data means any information which, directly or indirectly, could identify a living person. Name, phone number, and address are schoolbook examples of personal data.
Does GDPR apply to small companies?
Yes, GDPR applies to all businesses, no matter their size. Small businesses must comply with GDPR requirements, upholding the 8 rights that people must have over their personal data: The right to be informed. The right of access.
Is the GDPR mandatory?
Yes, GDPR is mandatory for all companies that process personal data of individuals residing in the European Union (EU). It applies to both EU-based organizations and non-EU companies that offer goods or services to EU residents or monitor their behavior.
How do I know if I am GDPR compliant?
The best way to demonstrate GDPR compliance is using a data protection impact assessment Organizations with fewer than 250 employees should also conduct an assessment because it will make complying with the GDPR's other requirements easier.
Do US companies need to be GDPR compliant?
GDPR's extraterritorial reach means that U.S. businesses are not exempt from its requirements. If your company processes personal data of EU citizens—whether through offering goods or services, employing EU residents, or monitoring EU citizens' online behavior—your organization is subject to GDPR.
Does GDPR apply to American citizens?
Yes, GDPR applies to U.S. citizens when they are physically located in the European Union (EU) or European Economic Area (EEA) and their personal data is being collected or processed, regardless of their citizenship; it protects them as if they were EU residents in that context, covering tourists, students, or business travelers. Its scope is territorial and depends on location, not nationality, meaning a U.S. citizen in the U.S. has no GDPR protection, while an EU resident in the U.S. also doesn't get GDPR protection.
Is GDPR more strict than CCPA?
GDPR imposes additional conditions for companies processing health-related information, because GDPR is more specific by including terms, such as “genetic data” and “biometric data.” CCPA uses a general umbrella term. In general, GDPR fines seem likely to be higher than CCPA fines.
Do companies based in Europe have to comply with US privacy laws?
The country where the company collecting data is located doesn't matter, and EU companies must comply with US privacy laws if they meet the relevant criteria.
Do US banks have to comply with GDPR?
Any financial institution needs to comply with GDPR as well as other laws (for example, AML Act for anti-money laundering).
Do all companies have to follow GDPR?
The GDPR only applies to organizations engaged in “professional or commercial activity.” So, if you're collecting email addresses from friends to fundraise a side business project, then the GDPR may apply to you. The second exception is for organizations with fewer than 250 employees.