- Corporate Law and M&A , Finance and Banking
- Pieter Dierckx - Leo Peeters
- crowdfunding , crowdfunding platforms , FSMA , investment , fund , equity crowdfunding , start-up fund , prospectus
The Law of 18 December 2016 (hereinafter "The Law") regulating the recognition and
definition of crowdfunding and containing various provisions relating to finance finally creates a
legal framework for crowdfunding and alternative types of funding.
Previously, crowdfunding platforms were obliged to comply with a range of legislations, which did not aid clarity and transparency, and meant you couldn’t see the wood for the trees. However, the question is whether the new legislation will create sufficient clarity in this area.
Crowdfunding can be regarded as a collective effort on the part of several investors who combine
their investments in order to fund a different individual or organisation requiring funds for
Crowdfunding is an alternative form of funding which frequently uses an internet platform as a tool.
It can have various forms, such as equity crowdfunding, credit funding or donation funding.
The Law defines a crowdfunding platform as any natural or legal person who provides or offers alternative funding services in the territory of Belgium, and which is not a regulated enterprise.
And an "alternative funding service" refers to the sale, via a website or via any other electronic device, of investment instruments issued by issuing operators, start-up funds or funding vehicles in the context of a (non-)public offering. And no investment service may be provided in relation to these investment instruments, except:
From 1 February 2017, equity crowdfunding platforms are obliged to first obtain a permit from
the FSMA (Financial Services and Markets Authority). To do this, they must submit a dossier.
A number of conditions must be met in order to obtain this permit:
The FSMA must be notified of any changes to the management or conditions. If a platform ceases
to satisfy the conditions of the permit, it must be terminated.
Crowdfunding platforms may not receive or keep monies in cash or on an account. The same applies to financial products which belong to their clients.
Nor may they hold debts in respect of their clients, or have proxy or power of attorney for a
On its website, the FSMA has a list of the alternative-funding platforms, which may be accessed by the public.
The FSMA may oppose such project if it deems that it will to be detrimental to the platform.
If crowdfunding activities are performed by a branch of a crowdfunding platform that is located abroad, only the managers of the Belgian branch must meet the requirements for managers under Belgian legislation.
The Law incorporates a number of rules intended to provide maximum protection for investors.
For instance, crowdfunding platforms have a duty to inform their clients.
They must inform potential investors:
Clients must be capable of understanding the latter, and must be aware of the risks involved. Therefore, crowdfunding platforms are obliged to verify investors’ knowledge and experience, and to judge the suitability of the instruments.
In relaxation of "crowdfunding" legislation, the Law introduces an exemption from prospectus, provided the following conditions are met:
From 1 February, people investing in a (FSMA-recognised) crowdfunding platform can benefit from
the tax shelter for start-up enterprises, provided, of course, that they invest in the capital of a
This tax relief depends on the size of the company at the time of fund-raising:
Tax relief can be gained for the assessment year relating to the income year in which the
investment occurred. The tax relief cannot be refunded or transferred.
Therefore, during its life-time, a company is able to raise a maximum of € 250,000.
The investor may invest a maximum of € 100,000. The maximum stake in the capital that qualifies for the tax concession, is 30%. If the aforementioned 30%-threshold is exceeded, the tax relief is limited to an investment amounting to the first 30%.