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Cross-border crowdfunding: new financing opportunities for businesses

The EU is planning to adopt harmonised legislation on the operation of cross-border crowdfunding platforms. This would enable online platform operators to apply for authorisation to provide crowdfunding services across the EU, in all member states. Crowdfunding services providers could thus scale up their operations to cover the whole of the EU.

The proposed legislation contains provisions on protecting investors by testing their understanding of financial products and their ability to bear financial losses. It also contains rules on the disclosure of information to potential investors, risk management practices and supervision of operations.

Crowdfunding involves the collection of relatively small sums, via internet-based platforms, from a large number of people. The new EU legislation would apply to cross-border crowdfunding platforms matching investors with businesses in need of finance. Its application would be restricted to crowdfunding in the form of loans or investments.

Easier access to financing sources

The new legislation aims to diversify funding opportunities for startups and other small and medium-sized businesses. This could boost growth in the economy and employment. From the investor’s point of view, it would expand the range of investment options available.

The Council of the EU reached agreement on the EU legislation in June 2019. Finland, as the country holding the Presidency of the Council, held then trilogue negotiations with the European Parliament and the European Commission. The parties reached a preliminary agreement on the legislation in December 2019.

Building a capital markets union

The project to regulate crowdfunding is part of the plan for building a capital markets union. It is also associated with the European Commission action plan for promoting financial technology (FinTech).

On 8 March 2018, the Commission adopted a proposal for a regulation on European crowdfunding services providers for business. At the same time, the Commission also proposed changes to the markets in financial instruments directive (MiFID).

European Commission press release (8 March 2018)
European Commission website on crowdfunding


Paula Kirppu, Senior Ministerial Adviser, Ministry of Finance, tel. +358 2955 30552, paula.kirppu(at)