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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 FIN-FSA oversees the provision of crowdfunding services in which the recipient of crowdfunding raises either equity or debt funding to finance business activity. The provision of such an investment- or loan-based crowdfunding service is subject to authorisation.
Legal affairs
Obligations and requirements to provide crowdfunding, crowdinvesting and crowdlending platforms described above
Crowdfunding in Finland is governed by the Finnish Act on the Provision of Crowdfunding Services (APCS, 203/2022). Providers of crowdfunding services must obtain authorisation from the FIN-FSA, in compliance with the APCS and Regulation (EU) 2020/1503 on European crowdfunding service providers for business.
Additional comments regarding the legal situation for crowdfunding, crowdinvesting and crowdlending platforms or what FinTech’s must be aware of in this business area
According to the Finnish Fundraising Act, a fundraising is an activity where money is collected free of charge by appealing to the public. Fundraising requires a fundraising permit issued by the police, which can be granted to an association or foundation registered in Finland with a charitable purpose. In practice, this means that donationbased crowdfunding is not an option for financing business activities in Finland.
Also, when it comes to reward-based crowdfunding, in order to avoid the fundraising to be considered fundraising under the Fundraising Act, the reward-based crowdfunding must be implemented in such a way that no money is collected without giving something in return. For this reason, many foreign crowdfunding platforms are problematic for Finnish companies, as they often offer the possibility of handing over funds to the applicant for no consideration.
Economic conditions
Market size for crowdfunding, crowdinvesting and crowdlending platforms and biggest companies in this business area
According to the Bank of Finland, the volume of funding brokered to domestic finance seekers on crowdfunding platforms covered by Finnish statistics totaled EUR 70.7 million in 2023. In the same year, no P2P loans were provided to individuals. Loan-based crowdfunding for Finnish non-financial corporations amounted to EUR 61.3 million, while investment-based crowdfunding reached EUR 9.0 million.