---
slug: what-is-nace
number: 1
title: "What is NACE?"
subtitle: "A common vocabulary for describing what a business does."
reading_minutes: 5
source_pages: "Foreword; §1 Introduction, pp. 11–18"
translation_status: source
canonical: https://nacebridge.eu/handbook/what-is-nace
primary_source: "Eurostat KS-GQ-24-007-EN-N — NACE Rev. 2.1"
license: "CC BY 4.0 (derivative); 2011/833/EU (source)"
---

# What is NACE?

> A common vocabulary for describing what a business does.

NACE is the European Union's shared classification of economic activities. It gives every kind of business — from a village bakery to a satellite operator — a single code that means the same thing in Lisbon, Warsaw and Helsinki.

## A shared vocabulary

NACE — nomenclature statistique des activités économiques dans la Communauté européenne — is the European Union's common statistical classification of economic activities. Every kind of productive activity performed inside the EU is assigned a code so that statistics collected in different countries, by different institutions, in different languages, can be aggregated and compared without ambiguity.

The classification is maintained by Eurostat, the statistical office of the European Union, in cooperation with the national statistical institutes of the member states. It is used by public administrations, national statistical offices, chambers of commerce, tax authorities, business registers, private data vendors and — increasingly — by any software system that needs to reason about what a company actually does.

The current edition covered by this handbook is NACE Rev. 2.1, adopted in 2023 and applied to statistical data from reference year 2025 onwards.

> **Note.** NACE is a classification of activities, not of products, occupations or legal forms. A self-employed carpenter and a hundred-person joinery share the same NACE class if they do the same work.

## Activity, not product

The single most important distinction to internalise is that NACE classifies activities — what an organisation does — rather than products, goods, occupations or legal forms. Products have their own classification (CPA in the EU, HS/CN for trade). Occupations sit in ISCO. Legal forms are national. NACE stays on the process: baking bread, writing software, transporting people by air.

This means that a small self-employed carpenter and a hundred-person joinery share the same NACE class if they perform the same activity. It also means that a company producing bicycles for sale and a company hiring bicycles by the hour are in different classes even though a bicycle is central to both.

## Where you will meet NACE

Every company registered in an EU business register carries at least one NACE-derived code. Tax authorities use national NACE-based codes to route VAT categories and industry-specific rules. Banks use them for anti-money-laundering risk scoring. Statistical surveys use them to define their target population. Research funders use them to describe eligible sectors. Job boards, ad networks, credit bureaus and B2B data vendors all rely, directly or indirectly, on NACE.

In short: if a system anywhere in Europe needs to know what a company does, it will speak some dialect of NACE.

---

**Source:** Foreword; §1 Introduction, pp. 11–18.

Primary source: Eurostat (2025). *NACE Rev. 2.1 — Statistical classification of economic activities in the European Community.* Publication code KS-GQ-24-007-EN-N. ISBN 978-92-68-19443-4. doi:10.2785/4407311.

Reuse: This derivative text © TΣKSOMΛ Technologies, CC BY 4.0. Underlying source © European Union, reused under Commission Decision 2011/833/EU.

Canonical URL: https://nacebridge.eu/handbook/what-is-nace
Manifest: https://nacebridge.eu/handbook.json
MCP: https://nacebridge.eu/mcp