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FinTechs belonging to this category operate crowdfunding, crowdinvesting and crowdlending platforms on which money is raised to invest in various projects, mainly start-up companies and real estate projects.
Crowdfunding is not a defined financial service, but generally used to describe donation-based crowdfunding (the investor donates the money to the project), reward-based crowdfunding (the investor receives an often symbolic consideration for his investment), equity-based crowdfunding (crowdinvesting: the investor participates in the profits of the financed project or acquires shares or debt instruments) or lending-based crowdfunding (crowdlending: the investor is reimbursed at the end of the project with or without interest).
Introduction
Attitude of the country towards crowdfunding, crowdinvesting and crowdlending platforms
The crowdfunding mechanism has become increasingly common, standing out in markets such as real estate, among others, where it is presented as an investment alternative. However, since its inception, Cumplo (a crowdlending company) has been resisted by the formal financial system. As soon as its operations began in 2012, the Superintendence of Banks and Financial Institutions (succeeded by the CMF), claimed that Cumplo was entering the banking business (which is prohibited by Law) as it aimed to raise funds from third parties and grant credits. However, this claim was finally dismissed.
FinTech Law has also regulated crowdfunding platforms, defining them as “physical or virtual place where people seeking for investment projects or financing necessities, spread, communicate, offer or promote this projects or necessities, or their characteristics, and are contacted or are of informed of people who count with available resources or the intention of participating in said projects or necessities or satisfying them; in order to facilitate the materialization of the financing operation”.
Legal affairs
Obligations and requirements to provide crowdfunding, crowdinvesting and crowdlending platforms described above
Assuming that the FinTechs will only provide a platform whereby entities seeking funding directly contact and receive the funds from potential investors. apart from general rules applicable to service providers (such as initiation of activities before the Chilean Internal Revenue Service), this FinTech must comply with certain requirements established in the FinTech Law.
FinTech Law establishes crowdfunding platforms as one of the many financial services which must comply with certain requirements to be enrolled in the RFSP and information obligations, as described in Sections b. and c. above.
Additional comments regarding the legal situation for crowdfunding, crowdinvesting and crowdlending platforms or what FinTech’s must be aware of in this business area
(*) International companies providing the services defined in the FinTech Law must be domiciled in Chile for these purposes, subject to express exceptions established by the CMF.
Economic conditions
Market size for crowdfunding, crowdinvesting and crowdlending platforms and biggest companies in this business area