Investor area


Questions and Answers for Investors on Crowdfunding


1.  What is crowdfunding?
Crowdfunding is the financing of entities or their activities and projects through their registration on electronic platforms available via the Internet, from where they raise investment tranches from one or several individual investors.

2. What types of crowdfunding are there?
The legal framework on crowdfunding established in Law No. 2012/2015 provides for four types of crowdfunding:  
  • Donation-based crowdfunding, where the funded entity receives a donation in return for, or not, consideration of a non-monetary nature;
  • Reward-based crowdfunding, where the funded entity is obliged to provide the financed product or service in return for the funding obtained;
  • Equity crowdfunding, where the funded entity repays the funding obtained through a share of its share capital, dividend payments or profit sharing;
  • Loan-based crowdfunding, through which the funded entity pays interest on the financing obtained, at the rate defined at the time the funds are raised.
3.  Are crowdfunding platforms able to pursue more than one type of crowdfunding? 
Yes. Crowdfunding platforms can simultaneously pursue more than one crowdfunding type and are bound by specific requirements applicable to each type.
If a platform intends to pursue simultaneously crowdfunding types subject to CMVM supervision and those that are not subject to that supervision, management entities shall demonstrate to CMVM the segregation of the businesses in question.

4.  Which crowdfunding types are subject to CMVM's regulation and supervision?
The crowdfunding types that are within the scope of the CMVM's supervisory powers are solely those that pertain to equity and loan-based crowdfunding.
5.  What is the scope of the CMVM's responsibilities as to equity and loan-based crowdfunding?
As regards equity and loan-based crowdfunding, the CMVM exercises all the powers and prerogatives conferred on it by the respective Statutes and the Securities Code, namely regulation, supervision and oversight, as well as those of inquiry of infractions, case procedures and application of fines and ancillary sanctions within this activity. However, the activities and projects to be financed through equity and loan-based crowdfunding are not subject to approval by the CMVM, nor does the CMVM assess the content of the information provided by them, including through the document containing the "key information for investors of crowdfunding"(IFIFC). 

6. Do electronic platforms of equity and loan-based crowdfunding have to be registered at the CMVM? 
Yes, the information on respective registration must be made available to investors by the managing entities of the platforms.

7. Can one resort to equity and loan-based crowdfunding without using a platform?
No. equity or loan-based crowdfunding is a form of fund-raising by entities or individuals who intend to finance business activities and/or projects through their registration on electronic platforms, from which they obtain investment from one or more individual investors.

8. How may an investor confirm whether the platform is registered? 
The CMVM makes available on its website the list of managing entities of crowdfunding platforms that are registered. Before making any decision, the investor should check the CMVM website if this entity is registered. If it is not registered, then it should not make any equity application and must report the situation to the CMVM. However, it should be noted that, as mentioned previously, there are only two types of crowdfunding – equity and loan-based - which require the registration of their management entities with the CMVM.
9. What type of information should be made available to investors by the management entities of crowdfunding platforms?
Management entities shall make available all the relevant information for informed investment decision making on the crowdfunding platforms, including:
  • Information on the respective prior registration with the CMVM;
  • Prior information on each offer, presented in a document containing the "key information for investors of crowdfunding" (IFIFC), the format and minimum content of which is described in Annex II of CMVM Regulation No. 1/2016​, and which must be written in Portuguese;
  • Information on current offers including identification of the beneficiary, the type of crowdfunding, deadline, remuneration rate, total amount of the offer, percentage of the amount raised, any credit ratings and guarantees provided, as well as any other materially relevant information on the terms and conditions of such operations;
  • Historical information on the financed projects, including the number of projects and their amounts, broken down by type of crowdfunding and by the status of the financing (financing not due, financing repaid on time and financing not repaid on time), indicating the average rate of return and the average term of the loans;
  • Price list;
  • Information on investor protection procedures that should be adopted in the event of insolvency, cessation of activity and prolonged inactivity by the managing entity of the electronic crowdfunding platform.
10.  Are there legal limits for investment in crowdfunding?
Investors in equity crowdfunding may not surpass the following investment limits: 
    • €3,000 per offer;
    • €10,000 in the total investment amount via crowdfunding during a 12-month period.

      The investment limits provided for in the previous number are not applicable to: 

    • Legal entities;
    • Natural entities that have an annual income equal or greater than €70.000;
    • Professional investors as per Article 30 (a) to (k) of the Securities Code. 
11.  How does one ensure that the investment limits are complied with?
In order to ensure compliance with investment limits, investors declare in the document containing the "key information for investors of crowdfunding" the overall amount already invested in crowdfunding platform offerings in the last 12 months.
12. Can investors' statements regarding investment limits be made without investors having to specify the amounts actually invested in?
Yes. The statement of investment limits to be made by investors when subscribing to an offer referred to in the previous question, may be issued without investors having to indicate the exact amount invested in the last 12 months (including the amount to be invested in the current offer) and merely stating that in the last 12 months (including the current offer), no investment in crowdfunding of more than €10.000 was done. 

13.  What risks should investors take into consideration with crowdfunding? 
Crowdfunding includes due to its particular nature and configuration, the following risks: 
  • Risk of illiquidity or lack of market for subsequent trading of financial instruments or credits subscribed by investors;
  • Risk of partial or total loss of the amount invested in the funded projects, due to the incipient phase of these projects;
  • Operational risks of the crowdfunding platforms or discontinuation of that service;
  • Risk of fraud, especially due to the inability of an accurate diagnosis of the project's purposes;
  • Risk of not verifying the estimated profitability of the invested amounts;
  • The products, funded activities and information conveyed through the crowdfunding platforms are not subject to approval by the CMVM (see Q&A 5);
  • The investments made are not, for the most part, covered by the Investor Compensation Scheme (see Q&A 14);
  • The investments made are not deposits and are not covered by the Deposit Guarantee Fund.
14. Are investments made on equity or loan-based crowdfunding platforms covered by the Investor Compensation Scheme?
Investment made in crowdfunding platforms is not covered by the Investor Compensation Scheme (ICS) unless they arise from financial intermediation and the assumptions of its application are verified. For further clarification on the scope of coverage of the ICS, consult the applicable legislation, questions and answers, as well as other additional information.