European Union crowdfunding platforms

Published:

March 19, 2020

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CROUDFUNDING PLATFORMS IN THE EUROPEAN UNION

European countries have decided to increase the attractiveness of their territories for startups and introduce new crowdfunding rules. Crowdfunding platforms in the European Union will gain access to customers of the entire European Union

The executive body presented an action plan aimed at improving the latest technology. These include: Blockchain, AI (artificial intelligence) and various cloud storage.

The problem with crowdfunding in Europe today is that there is not a single general law. This means that all startups operate within the framework of national laws, which greatly slows down their development.

The new law will make markets safer and more affordable for new companies. It provides some rules for crowdfunding, thanks to which platforms can operate throughout the EU.

With the help of this law, operators will have the opportunity to work, subject to a single law.

The vice president of financial stability, Valdis Dombrovskis, noted that licensing crowdfunding platforms will help increase their number in Europe. It will also be possible to invest in companies, which will open up great opportunities for entrepreneurs and sponsors.

UK crowdfunding platforms are looking for ways to get a license in the EU after Britain leaves the EU

This decision is not unimportant, since England will soon leave the EU bloc and remain with its law on licensing crowdfunding. Today it is becoming clear that English financial companies will not be able to provide customer service from Europe.

UK licensed financial service providers are already looking for new ways to continue to have access to the European market. Without it, they will lose up to 500 million potential customers, which will entail financial losses.

The main direction for crowdfunding in Europe is Lithuania. Due to its developed infrastructure.

Once approved, the decree will enable platforms to make an application for an EU brand name under unified legislation. Thanks to this, it will be possible to offer their services directly.

All platform investors will be protected thanks to clear disclosure rules. Rules are also provided for in the areas of risk management and supervision.

Crowdfunding provides access to financial injections for startups and small businesses. Companies place their business plan on an online platform and apply for sponsorship or investment. Investors, in turn, profit from profitable projects.

Thanks to strict rules in EU law, it is difficult for many crowdfunding platforms to expand their activities. Because of this, the development of such a business in Europe is problematic. The main obstacle is the high cost of maintaining the platform.

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