Whether you need a crowdfunding licence in the EU comes down to one distinction: is a platform providing a crowdfunding service, or is a company simply asking the public for money? The EU crowdfunding rulebook, Regulation (EU) 2020/1503 (ECSPR), licenses only the first.
When a crowdfunding licence is required
A legal person running a crowdfunding platform that matches investors with businesses seeking funding must be authorised as a European crowdfunding service provider before the platform goes live. Two models are covered:
- Lending-based crowdfunding (crowdlending, P2P business lending): facilitating loans, including real estate loans, from investors to business borrowers, whether by presenting, pricing or credit-scoring the offers.
- Equity and bond crowdfunding (crowdinvesting): placing shares, bonds or similar instruments issued by the project owner without a firm commitment and transmitting investor orders for them.
The ECSPR covers offers of up to €5,000,000 per project owner over 12 months, counting platform offers and the owner’s own prospectus-exempt offers. Authorisation is granted by the operator’s home competent authority and is passported across the EU after a notification: one licence, all member states. The old national licences expired with the transitional period.
Who applies for the licence
The authorisation is held by the platform operator, not by the businesses raising money. A startup launching a crowdfunding campaign on an authorised platform needs no licence: it prepares the key investment information sheet and passes the platform’s checks. Nor do borrowers and lenders on the platform’s loans need authorisation.
When crowdfunding needs no licence
Two popular forms of crowdfunding fall entirely outside licensing:
- Donation and reward crowdfunding. Backers get nothing, or a product or perk as on Kickstarter-style sites, but no financial return. This is a sale or a gift, not an investment, subject to consumer and tax law only.
- Direct fundraising by the company itself. A business selling its own shares or bonds on its website, without an intermediary, is not providing a crowdfunding service. No licence is needed, though prospectus rules govern the offer.
The grey zone
Hybrid models are the trap: a reward platform adding a profit share, a donation site promising repayment, or a lending platform whose borrowers are sole traders may all fall under the ECSPR. For a natural-person borrower the test is the loan’s purpose: business use is within the ECSPR, private use is not.
When a different licence applies
Some activities need another permit instead of, or alongside, ECSP authorisation:
- Loans to consumers. Platforms arranging loans to private individuals for personal purposes fall under national consumer-credit law, usually requiring a credit-intermediary licence.
- Token sales and ICOs. Offers of crypto-assets that are not securities are governed by MiCA, with its own white-paper and authorisation regime.
- Large offers. Above €5,000,000 per project owner in 12 months, placing securities becomes a MiFID II investment service and the offer falls under the Prospectus Regulation; loan intermediation reverts to national law.
- Moving client money. ECSP authorisation does not cover payments: funds must flow through a licensed payment service provider, the platform itself or a partner.
Where to get a crowdfunding licence in Europe
Operators apply in their member state of establishment: to Finantsinspektsioon in Estonia, to the Bank of Lithuania in Lithuania. Our Estonian crowdfunding licence and Lithuanian crowdfunding licence pages cover procedure and costs. Non-EU operators must first set up an EU entity, since only legal persons established in the Union qualify.
Frequently Asked Questions
No. The ECSP licence belongs to the platform operator; a company raising money on an authorised platform deals with the operator, not the regulator. Donation and reward campaigns are exempt altogether.
An EU legal entity, at least €25,000 in own funds or equivalent insurance, managers of good repute with relevant experience, and procedures for risk, conflicts and continuity. The regulator decides within three months of a complete application.
Yes. Authorisation granted in one member state lets a crowdfunding platform operate in all others after a notification to its home authority.
