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Crowdfunding service providers must obtain a license

As of 10.11.2022, all crowdfunding service providers (CSP) who (intend to) provide crowdfunding services falling within the scope of the EU Crowdfunding Regulation ((EU) 2020/1503) (CFR) must have relevant authorisation and meet the new requirements.

As the assessment by the competent authorities of the completeness of the authorisation applications may take up to 25 business days (followed by a deadline for providing missing information, if relevant) and the review of the complete applications may additionally take up to 3 months, it is advisable to start with the preparation without delay.

This applies to:

  • Lending-based crowdfunding: facilitating granting of non-consumer credits (loans) by investors to project owners through the use of a crowdfunding platform

  • Investment-based crowdfunding: placing without a firm commitment basis of transferable securities and admitted instruments for crowdfunding purposes issued by project owners or a special purpose vehicles and reception and transmission of client orders in relation such instruments

The volume: CFR applies to crowdfunding campaigns made by project owners in the amount of up to 5 MEUR over a 12-months period (unless, smaller amount is set forth in the national law, e.g. currently 2,5 MEUR in Estonia). Larger offers fall within the scope of the Prospectus Regulation and may trigger an authorisation requirement under MiFID II.

The geographical scope: under the CFR, only legal persons established in the EU can obtain an authorisation to provide crowdfunding services to EU clients. Crowdfunding platforms and their intermediaries currently providing services to investors and project owners in the EU from establishments outside of the EU will therefore have to relocate or establish subsidiaries within the EU to access EU investors and project owners.


1. CSP established or operating in the EU must obtain an authorisation under the CFR.

2. CSP who operates in another EU member state besides its home EU member state may have to additionally passport the authorisation.

3. CSP must bring itself and its services in compliance with the new requirements set forth in the CFR, applicable (among other) to:

  • Prudential safeguards

  • Managers and qualified owners

  • Prudent management, including internal governance and internal control arrangements

  • Management of conflicts of interest

  • Outsourcing arrangements

  • Assessment of the project owners and crowdfunding projects

  • Classification of investors, including entry knowledge test

  • Investor protection, including preparation and disclosure of specified information on project owners and crowdfunding projects, pre-contractual reflection period and investment limits for non-sophisticated investors

  • Individual portfolio management services

  • Complaints handling

  • Record keeping and reporting

  • IT and security arrangements

  • Business continuity arrangements.

4. CSPs shall be under financial supervision of a competent authority. In Estonia, CPSs shall be supervised by the Estonian Financial Supervision and Resolution Authority.

CSPs who wish to provide payment services in the course of its activities, must also have relevant separate authorisation or cooperate with authorised payment service provider.

For more information you can contact us at

#Crowdfunding #Legal

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