On October 1, 2015 entered into force Law no. 102/2015, of 24 August, approving the crowdfunding legal regime.
Crowdfunding is a form of funding entities, or their activities and projects, through their registration in electronic platforms accessible via internet, from which the raising of in- vestment from one, or several, individual investors occurs.
Such form of funding is performed trough one of the following methods:
- Donation – the funded entity receives a donation, with or without the delivery of non-monetary compensation;
- Reward – the funded entity is obliged to provide the financed product or service, in return for the funding obtained;
- Capital – the funded entity remunerates the obtained funding by participating i n the respective share capital, distribution of dividends or profit sharing;
- Loan – the funded entity remunerates the obtained funding through the payment of fixed interest at the moment of the fund raising.
The electronic platforms may proceed through more than one of such methods, provided that they stay bound to the specific requirements applicable to each of them.
Any collective persons or individual establishments with limited liability can be platform holders. On the other hand, any individuals or collective persons, domestic or foreign, interested in raising funds for their activities and projects through this form of funding may resort to crowdfunding platforms.
The admission of a beneficiary to a platform is carried out through the conclusion of a written contract available in a dematerialized form via the platform. The respective con- tract shall contain the following key elements:
- the identification of parties;
- the collaborative funding methods that will be used;
- the identification of the project or activity to be funded;
- the amount and the term of the fund raising, as well as the financial instruments to be used for the fund raising.
The non-compliance with the mentioned elements constitutes grounds for termination of the contract by either party, notwithstanding the liability of the party that caused the termination of the relationship before third party investors acting in good faith.
The electronic platforms shall (i) ensure the investors’ access to information on the prod- ucts placed through their websites and webportals; (ii) ensure the confidentiality of information received from investors, as well as the information received from the invest- ment beneficiaries, which is not of public disclosure, as part of the information obligation under the applicable law; (iii) ensure the compliance with the applicable law and other applicable regulations regarding the prevention of conflicts of interest, particularly in re- gards to the prohibition of financial interests that governing bodies and employees ma y have in offers made available by them; (iv) not provide advice or recommendations re- garding the investments to be made through their websites or webportals; (v) not compensate their managers and employees for the offer or sales volumes of available products or references on the respective portals; (vi) not manage investment funds nor hold securities.
As for the specific elements of the possible financing methods, it should be noted that the crowdfunding methods performed through donation or reward should , previously, notify the commencement of such activities to the Consumer General Directorate, without the need for payment of administrative fees. The fund raising, however, is subject to a maxi- mum limit of 10 (ten) times of the total amount of the activit y to be funded.
The crowdfunding methods performed via capital or loan are subject to prior registration of the respective activities with the Securities Market Commission (“CMVM”), which is the entity responsible for their supervision.
In this light, a Regulation proposal was published, according to which crowdfunding re- quires prior registration of the managing body of the crowdfunding platforms in the CMVM. The investors in crowdfunding are subject to a funding limit of EUR 3,000.00 (three thou- sand euros) per offer and EUR 10,000.00 (ten thousand euros) for the total of its investments in a 12 month period.
Such limits are not applicable to collective persons or individuals who have an annual income equal or higher than EUR 100,000.00.
The maximum fund raising limit, however, is EUR 1,000,000 (one million euros), not being allowed for an activity or product based funding to exceed this limit in a 12 month period.
An example of the use of this form of funding in Portugal is the fund raising campaign launched by the National Museum of Ancient Art for the acquisition of the painting “The Adoration of the Magi”, from the Portuguese painter Domingos António Sequeira. The fund raising, valid until April 30, 2016, is carried out through the purchase of pixels a t a price of six cents each.