Crowdfunding / crowdinvesting / crowdlending
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).
Attitude of the country towards crowdfunding, crowdinvesting and crowdlending platforms
The popularity of crowdfunding in Czechia steadily rises, although the supply can be viewed as limited compared to other EU Member states. Among the crowdfunding platforms active in Czechia belong e.g. Hithit, Startovac, Fundlift, Penezdroj, and slightly different business models of Zonky or Bondster.
Obligations and requirements to provide crowdfunding, crowdinvesting and crowdlending platforms described above
In Czechia, there is no specific regulation applicable to crowdfunding platforms, however, this does not mean that no regulation should apply.
Firstly, the crowdfunding platforms provider activities may fall within the scope of the Regulation (EU) 2020/1503 on European crowdfunding service providers for business (European Crowdfunding Service Provider Regulation - "ECSPR"). If so, the provider needs to obtain the respective license under the ECSPR. Although the implementing legislation has not yet been passed, it can be presumed that obtaining the license will be subject to an administrative fee of 20.000 CZK (plus additional legal and other fees).
Secondly, anti-money laundering and data protection regulations are to be complied with.
Additional comments regarding the legal situation for crowdfunding, crowdinvesting and crowdlending platforms or what FinTech’s must be aware of in this business area
Although there is no specific regulation applicable to crowdfunding platforms providers that are not covered by the ECSPR, depending on their business model, they may fall within the scope of other financial regulations, e.g. in the area of payment services (ZPS) or investment services (ZISIF). Additionally, anti-money laundering and data protection regulations are to be complied with.
Market size for crowdfunding, crowdinvesting and crowdlending platforms and biggest companies in this business area
Unfortunately, there is no statistical data available regarding crowdfunding platforms in Czechia.
Additional comments regarding the economic situation for crowdfunding, crowdinvesting and crowdlending platforms or what FinTech’s must be aware of in this business area
The recently introduced ECSPR provides for uniform rules in the EU for crowd-investment or crowdfunding and the Czech legislator decided to adopt it entirely without imposing any additional requirements. Given the relatively limited presence of crowdfunding platforms in Czechia, this may present opportunities for crowdfunding platform operators from other EU Member states.