About the service

A company that offers crowdfunding services is classified as a Crowdfunding Service Provider (matches the business financing interests of investors and project owners using a crowdfunding platform).

The rise of fintech has enabled more alternative sources of financing, such as crowdfunding. This system depends on voluntary contributions from people who believe in a particular project. By creating a campaign and having a good concept, crowdfunding can be used to not only raise the money needed to carry out a project, but to also attract a community of supporters and potential customers. Unlike donations, those who contribute to crowdfunding are typically rewarded, either through tangible or intangible means.

To conduct crowdfunding business in the EU territory, you need to obtain a consumer lending and public finance license. The term for obtaining such a license in Lithuania is 1 month, minimum authorized capital of a company is
40 000 EUR.

Licensed Crowdfunding platform operators are permitted to finance their client companies through crowdfunding platforms using different instruments:

• Loan agreement;

• Issue of debt securities (i.e. bonds);

• Issue of equity securities (i.e. shares) or any other securities;

• Assignment of claim rights deriving from existing credit agreements.

Requirements:

• The suitability of the papers submitted.
  Documents provided must be accurate and fulfill the standards of the law acts that regulate Crowdfunding activities and administration.

• Compliance with the minimum capital requirement.
  40 000 EUR.

• Fitness and propriety of the company and its shareholders.
  Entities with a qualifying ownership in the payment institution's authorized capital and/or voting rights must be able to assure the payment institution's competent and prudent management, have a good reputation, and be financially sound.

• Fitness and propriety of heads of a company.
  The management of a payment institution must be well-respected and have the training and expertise required to carry out their responsibilities.

• The business plan must be coherent with the founders of the crowdfunding provider possibilities.