Name
Global FinTech Guide
Country _ Name
Spain
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

Law 5/2015 has provided more security and protection for investors in Spain. However, FinTech experts demand a more flexible regulation so that it can also be used to finance large projects.

Legal affairs

Obligations and requirements to provide crowdfunding, crowdinvesting and crowdlending platforms described above

Spanish Law
Law 5/2015, of April 27, on the Promotion of Business Financing ("LFFE”) regulates financial crowdfunding platforms, involved in the intermediation of financing through loans, bonds or equity participations. This regulation considers two kind of investors, qualified and unqualified, and setting limits of investment for each type of investors:

  • Qualified investors: have a total income of more than €50.000 per year or a financial asset of more than €100.000
  • Unqualified investors: those with less than €50.000 of income per year.

Only qualified investors can invest more than €3.000 in the same project or more than €10.000 in the same platform per year. Unqualified investors only can invest less than €3000 per project.

These platforms are under the authorization, supervision, inspection and sanction of the CNMV, with the participation of the Bank of Spain in the case of lending-based crowdfunding.

They have to fulfil certain administrative and financial requirements to be allowed to operate as crowdfunding platforms:

  1. The capital of the financing platforms must be at least €60,000. Also, they must have professional liability insurance with a minimum coverage of €300,000 for damage claims and a total of €400,000 per year to cover all possible claims.
  2. The corporate address of the platform must be in Spain.
  3. For safety purposes, the law requires the platform to report detailed information on its operation (procedure, data processing, fees, conditions, etc.), the risks involved in the participation in loans or subscription of shares and the degree of supervision of the financing (the platforms are supervised, but the individual projects that are published are not examined by the CNMV or the Bank of Spain).
  4. The platforms must inform their clients about the rights and obligations assumed in a clear, timely, sufficient, accessible, objective and non-misleading manner, as well as the specific information that must be included in the website.
  5. The corporate name must include the name financing platform (“Plataforma de Financiación Participativa”) or the acronym in Spanish “PFP”.
  6. The platform has to prove the suitability of the administrators for exercising their functions as well as have a good administrative and accounting organization that guarantees security, confidentiality, reliability and capacity of the ser
vice provided and have an internal conduct regulation.
Moreover, the law restricts the range of services that these platforms may provide. In particular, they are not allowed to offer investment advice or process payments (unless they apply for a license as hybrid payment institutions).

Finally, the CNMV fees to get the license for the crowdfunding platforms are €312,18. 

European Law
 
EU Regulation 2020/1503 applies to Spain and platforms have until 10 November 2022 to adapt to the new regulation.

There is a draft of a new law (Proyecto de Ley de Creación y Crecimiento de Empresas), that is intended to modify Law 5/2015 to adapt Platforms to the above-mentioned EU Regulation.

Additional comments regarding the legal situation for crowdfunding, crowdinvesting and crowdlending platforms or what FinTech’s must be aware of in this business area

Platforms will need to adapt their legal situation to EU Regulation 2020/1503 and to the new Spanish law that will come into force to adapt the EU Regulation.

Economic conditions

Market size for crowdfunding, crowdinvesting and crowdlending platforms and biggest companies in this business area

In 2020, lending platforms (Crowdlending) once again lead with €49,158,300 raised. This is followed by investment platforms (Equity Crowdfunding) with €44,548,631. In third place comes Real Estate Crowdfunding with €29,319,570. In fourth place comes Donations Crowdfunding with €26,957,162, while Rewards Crowdfunding with €17,046,264 closes the list.

For the first time in several years, there has been a decrease within Crowdfunding in Spain, linked to the situation generated by the Covid-19. Although this decline has two key points, it occurs mainly in two types of Crowdfunding, Crowdlending and Real Estate Crowdfunding. In both cases, two leading platforms, Housers and MytripleA, had a large influence. Their declines have dragged down the overall fundraising, when previously they clearly expanded it.

Despite this decrease in fundraising, Equity Crowdfunding has remained firm and with record fundraising campaigns, while reward-based Crowdfunding and donation-based Crowdfunding have increased their fundraising.

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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