German Legal Advice on Crowdfundings 

Under current law, issuers have various options for placing their investment offer as crowdfunding without a prospectus, but subject to certain investment thresholds. One possible form of structuring is regulated by the European Crowdfunding Service Provider Regulation (ECSPR), which enables cross-border distribution (European passport) with an issue volume of up to EUR 5 million in the EEA area. However, a German platform operator requires a licence from BaFin and must fulfil certain compliance requirements. Possible German crowdfunding instruments include loans and transferable securities, whereby a distinction from collective investment undertakings must be made. An investment information sheet (AIB; KIIS for ‘key investment information sheet’) is to be provided.

Another possibility for issuing a swarm financing instrument exists under the German Asset Investment Act (VermAnlG), insofar as the provisions of the ECSPR do not apply. On the one hand, European distribution on a harmonised legal basis is not possible. On the other hand, however, no BaFin licence is required for platform operation - a simple licence in accordance with Section 34f of the German Trade Regulation Act (GewO) is sufficient - and the possible issue volume is up to EUR 6 million. In particular, the qualified subordinated loan established in Germany can be considered as a swarm financing instrument. In line with the requirements of the ECSPR, an investment information sheet (IIS) must be published and certain investment thresholds must be complied with.

Finally, the prospectus-free issue of a transferable security in accordance with the European Prospectus Regulation (PR) or the German Securities Prospectus Act (WpPG) can also be considered. However, the legal framework will be amended by the EU Listing Act with effect from June 2026 and has not yet been finalised at the time of editing this website.