The opening up of markets as a result of economic integration in the European Union is bringing with it faster structural change and greater competitive pressures on businesses. In many situations, cooperation or partnership between small businesses in different regions or countries of the Union can help to meet the challenge of the wider market and to compete with larger ones, especially if the arrangements concerned are based on complementarity resulting in mutual benefits. Moreover, cooperation can foster the modernisation and diversification of SMEs. There are different forms of cooperation, e.g. joint ventures, syndicates, agreements covering non-financial links (the granting/purchasing of licences, the transfer of know-how, marketing, etc.) or the acquisition of holdings. It may be formal, i.e. based on a contract, e.g. via a European economic interest grouping [see section 17.2.1], or informal. Before taking part in any form of cooperation, firms must of course consider whether that cooperation is legal, since cooperation agreements sometimes give rise to problems in connection with the provisions of the Treaties concerning competition [see section 15.3]. Such cases are, however, rare. As stated in the chapter on competition, the Commission is in favour of cooperation between SMEs and agreements of minor importance [Commission notice, see section 15.3.1].

While cooperation between European firms is regarded as desirable and is generally authorised, it still has to overcome problems of a technical and psychological nature. SMEs investing in other Member States prefer to create subsidiaries rather than joint ventures, or to enter into looser cooperation agreements without the obligation to create a new legal entity. The Enterprise Europe Network mentioned above [see section 17.2.2] provides a ''one-stop-shop'' for all the information which may be of use to European businesses, including the identification of trustworthy commercial partners in all European countries and regions.