Crowdfunding provider licence
Who needs the license?
A legal entity established in the European Union that provides crowdfunding services consisting of matching of business funding interests of investors and project owners through the use of a crowdfunding platform and which consists of any of the following activities:
- the facilitation of granting of loans (credit crowdfunding), and
- placement of transferable (investment) securities and instruments accepted for the purposes of crowdfunding issued by project owners without a firm commitment and the receipt and transmission of client orders in respect of such securities and instruments (investment crowdfunding).
Who doesn’t need the license?
Providers of non-financial crowdfunding (donor or reward crowdfunding), providers of crowdfunding services to project owners who are consumers or service providers for projects where the consideration exceeds EUR 5 million.
Who grants the licence?
Czech National Bank (CNB).
What legislation governs the granting of a licence?
The conditions for the activity of a crowdfunding service provider are set out in Regulation (EU) 2020/1503 of the European Parliament and of the Council of 7 October 2020 on European crowdfunding service providers for business (the Regulation).
What can we do for you?
- We will prepare a complete application for the crowdfunding provider licence, including all mandatory annexes.
- We will prepare a business plan, including a forecast of economic performance in the form of financial statements and a business development strategy.
- We will create complete internal regulations and procedures, including risk management.
- We will develop anti-money laundering (AML/CFT) measures.
After obtaining a CNB license for crowdfunding:
- We will ensure the performance of compliance and AML.
- We’ll arrange reporting to the CNB.
- In cooperation with an accountant and a tax office, we provide bookkeeping.
How long does it take to process a license?
The preparation of the application and all attachments is a demanding process that can take several months. Within 25 working days of receipt, the CNB will review the application for a crowdfunding provider licence for completeness and, if necessary, invite the applicant to complete it. The CNB then has 3 months to decide whether to grant or refuse the licence. However, in view of the extremely short timeframe for the decision, it can be expected that licensing procedures will be interrupted and applicants will be invited to amend their licensing documentation in the context of the CNB’s comments without the 3-month timeframe running.
There is a transitional period until 10 November 2023 during which existing providers of group financing services may continue to operate as they did on 10 November 2021 under the existing conditions. Thereafter, only CNB licence holders will be able to provide group financing services under the Regulation.
In view of the length and complexity of the whole process of obtaining a CNB licence for a group financing service provider, we recommend that clients start dealing with the situation as soon as possible.
If you are interested in our crowdfunding licensing services - crowdfunding provider licenses or other financial services, please contact us at email@example.com or call +420 222 767 393 to arrange a free initial consultation.