ECN Review of Crowdfunding Regulation 2013
The first edition of our Review of Crowdfunding Regulation published at the end of 2013 marks an important milestone in the work of the European Crowdfunding Network, its members and its supporters. The paper covers the legal frameworks in 30 countries across Europe, the USA, Canada and Israel. Details of how crowdfunding of all types is treated under national regulation across Europe and beyond can be found in this publication.
The drastic lack of funding for SMEs has a visible impact on Europe’s economy. It is the key reason why we are currently witnessing a lively discussion on crowdfunding, which involves political actors of the highest level, such as the Vice President of the European Commission Neelie Kroes, the European Commissioner for the Internal Market Michel Barnier and the French President François Hollande.
However, the fragmentation of the European Union is a key hurdle for crowdfunding – as it has been for the venture capital industry, too. True, national laws allow for local crowdfunding industries to grow, but the markets are limited in size and do not offer room for scale. The different legislations and interpretations of European Directives will effectively prohibit a healthy European industry from emerging across borders. This fragmentation also concerns a number of other related issues, including e-commerce laws, tax rules and company laws.
In this light, it is alarming for the potential of SME finance that crowdfunding may be regulated on a national basis, without a common pan-European principle.
This publication considers the varying applications of the single market legislation to Crowdfunders across Europe both now and in the foreseeable future, so to frame the diverse situations in different countries and to highlight regulatory best practices which can potentially lead the way forward to pan-European market.