Crowdfunding is a specific funding instrument for startups: it allows investors to receive a stake in a startup, provide loans to them concluding specific contracts, and issue securities and tokens. Crowdfunding service provider’s license in Lithuania gives opportunities to fund enterprises through special crowd-funding platforms implementing certain next-mentioned tools:
- loan contracts;
- ebt obligations issuance;
- securities issuance;
- transfer of their rights arising from loan contracts.
Present tools such as the issuance and offering of tokens as STO securities may be evolved to increase means for investing structures via certified crowd-funding financing platforms. Securities provided to businesspersons using licensed platforms may be freely distributed throughout Europe.
Crowdfunding platform’s operator in Lithuania, as a rule, functions to attract as many potential investors as possible, who, by performing a number of non-trivial operations (registration on the platform, transferring the necessary amount of money), contribute to the corresponding project, receiving various benefits in return..
Legal framework governing crowdfunding service providers license in Lithuania
There’re 5 such platforms in Lithuania: they are engaged in P2P consumer lending. An operator wishing to offer a crowdinvesting or crowdlending service needs to get permission to enter the open register of crowd-funding firms of Lithuanian Bank (Law dated 01.01.2016). Also, in the case of a consumer crediting space, a separate permission from a credit institution is required.
- The transfer of funds via platform operator may be considered a payment service and therefore may be subject to licensing rules in Lithuania in accordance with local payment services legislation (PI or EMI).
- In accordance with Crowdfunding Law, a person engaged in or wishing to participate in the activities of a platform operator in Lithuania must reside in Lithuania. Persons registered in other EU states are only entitled to act through a local branch.
- In case if a Lithuanian company releases securities via a foreign platform, the prospectus regime is applied.
- If the Lithuanian platform addresses investors in another EU country, then the platform must comply with the legislation of another EU country. However, if investors from another EU country initiate contact, the reverse solicitation principle should be applied.
- The minimum requirement for the authorized capital is 40,000 euros.
Requirements for Lithuania crowdfunding service providers license
To subordinate the relationship between participants of crowdfunding-platforms to certain unified rules and obtain a permit, which should be followed by each participant using it; platform’s administrators (creators) should attend to the development of regulative framework: it will regulate, among other things, interaction of all parties and participants, namely next-mentioned.
- Relationship of crowd-funding platform with users (executives and project initiators) – user agreement.
- Agency relationship of crowdfunding-platform with project initiators – agency agreement.
- Relationship of platform with payment systems – an agreement for the implementation of activities for accepting payments.
- Relationship between investors and the project initiator – loan/purchase/sale/service agreements, etc.
- The procedure for processing personal data of users – provision of confidential information.
The above regulatory documents for crowdfunding service providers can be forms of arrangements posted on the site where the crowd-funding platform itself is located (concerning the user agreement, the provisions on confidential information) to which all users of platform automatically join when registering on the site at the time of filling out the registration form.
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