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Global FinTech Guide
Name
Global FinTech Guide
Country _ Name
Thailand
SectionTitle
Crowdfunding / crowdinvesting / crowdlending
Body
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 Securities and Exchange Commission (SEC) and the BOT have issued notifications regulating crowdinvesting and crowdlending, respectively. Currently, the SEC supervises the offering of newly issued shares and debentures, while the BOT supervises peer-to-peer lending.
The Thai crowdfunding market is developing and poised for growth as there are now eight (8) operators approved by the SEC as funding portals for equity-based crowdfunding, and four (4) peer-to-peer lending platform operators currently testing their services in the BOT regulatory sandbox framework for financial services that leverage new technologies. The regulatory sandbox allows financial service providers to test new technology in a live environment within a limited, well-defined scope.
As for donation-based crowdfunding, there are only a few major players in Thailand’s market, including taejai.com, social.sinwattana.com, and kaokonlakao.com.
Legal affairs
Obligations and requirements to provide crowdfunding, crowdinvesting and crowdlending platforms described above
Equity-based Crowdfunding (Crowdinvesting)
The SEC’s crowdfunding notification sets out restrictions and requirements (including reporting requirements) for issuers and crowdfunding portals. Crowdfunding platforms are also required to carry out KYC processes for issuers and investors using their services and must provide investors with information and risk assessments in order to protect inexperienced investors. The SEC crowdfunding notification also places higher restrictions on individual retail investors than on other types of investors.
Under the crowdfunding notification, the value of crowdfunding securities offered by an issuer to each retail investor is limited to THB 100,000 (approx. USD 3,000). Furthermore, the value of crowdfunding securities offered by an issuer to all retail investors must be no more than THB 20 million (approx. USD 595,000) within the first 12-months of the first offering of crowdfunding securities, and the total value of crowdfunding securities which may be offered to retail investors from the date of first offering is capped at THB 40 million (approx. USD 1.19 million).
Any entity intending to become a crowdfunding platform, or an approved provider of electronic systems or networks (so-called funding portal) must file an application with the SEC Office, together with the documents specified in the application and in accordance with the guidelines provided by the SEC Office in the electronic system. Applicants for approval as a crowdfunding portal must have the following characteristics:
a) Be incorporated under Thai law.
b) Have paid-up registered capital of not less than THB 5 million (approx. USD 149,000).
c) Not be in a financial condition that is likely to cause damage, or in any other circumstances indica
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Authors
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Name
Organisation
Email
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Charuwan Charoonchitsathian
Tilleke & Gibbins - Thailand
[email protected]
0
2154
Napassorn Lertussavavivat
Tilleke & Gibbins - Thailand
[email protected]
0
2154
Nopparat Lalitkomon
Tilleke & Gibbins - Thailand
[email protected]
0
2154
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