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Global FinTech Guide
Name
Global FinTech Guide
Country _ Name
Dominican Republic
SectionTitle
Crowdfunding / crowdinvesting / crowdlending
Body
FinTechs belonging to this category operate crowdfunding, crowdinvesting and crowdlending platforms on which money is raised to invest in various projects, mainly start-up companies and real estate projects.
Crowdfunding is not a defined financial service, but generally used to describe
donation-based crowdfunding
(the investor donates the money to the project),
reward-based crowdfunding
(the investor receives an often symbolic consideration for his investment),
equity-based crowdfunding
(
crowdinvesting:
the investor participates in the profits of the financed project or acquires shares or debt instruments) or
lending-based crowdfunding
(
crowdlending:
the investor is reimbursed at the end of the project with or without interest).
Introduction
Attitude of the country towards crowdfunding, crowdinvesting and crowdlending platforms
The social climate towards crowdfunding, and especially donation-based crowdfunding, is friendly thanks in large part to an organisation that acts in a similar manner to a donation-based crowdfunding platform in the sense that it receives and channels donations to those in need, although not through a FinTech platform in the sense that it has not built an in-house technological platform but simply acts through online presence and legacy banking solutions. This organization has helped channel DOP 20 million (approx. USD 350k) from over 11,000 donors to 300 charitable causes.
The regulatory authorities have been silent about crowdfunding platforms of all kinds in the Dominican Republic. The Superintendency for Securities Markets has issued
warnings
to investors concerning fraudulent schemes without mentioning crowdfunding schemes.
Legal affairs
Obligations and requirements to provide crowdfunding, crowdinvesting and crowdlending platforms described above
The Dominican Republic does not have a bespoke regulatory framework for crowdfunding platforms of any kind. However, some crowdfunding models fit into the previously established framework for traditional operations.
Specifically, offerings made by equity-based or reward-based crowdfunding may fit into the definition of public security offerings, which require a registration of both the issuer and the security offering in the Registry for the Securities Markets, at a cost of approximately USD 1,000.
Additional comments regarding the legal situation for crowdfunding, crowdinvesting and crowdlending platforms or what FinTech’s must be aware of in this business area
It's important for crowdfunding/lending platform operators to have a sense of when their activities run the risk of being considered financial intermediation, securities intermediation or public security offerings; so that they may design their platforms in a way that minimizes this risk or obtain the required registration.
Economic conditions
Market size for crowdfunding, crowdinvesting and crowdlending platforms and biggest companies in this business area
Statista estimates a market size of USD 13.23 million for 2022.
Additional comments regarding the economic situation for crowdfunding, crowdinvesting and crowdlending platforms or what FinTech’s must be aware of in this business area
N/A
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Authors
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Name
Organisation
Email
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Michelle Abreu Vargas
OMG
[email protected]
0
6517
Manuel Troncoso Hernández
OMG
[email protected]
0
6517
Aldana Fernández Martínez
OMG
[email protected]
0
6517
Diego García Melendez
OMG
[email protected]
0
6517
Alejandro Lama
OMG
[email protected]
0
6517
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