Crowdfunding provides an alternative financing option to traditional funding and is open to a range of businesses, from start-ups, through SMEs to larger companies.
The Isle of Man has long been a pioneer in introducing pragmatic regulation balanced with strong consumer protection which is responsive to international business requirements and the Isle of Man’s new Crowdfunding regulations once again demonstrates delivery of that philosophy.
The Crowdfunding regulations offer comfort to businesses and investors alike using Isle of Man based platforms that those platforms will operate within a strong regulatory framework. The oversight provided by the Crowdfunding regulation is arguably even more important for international businesses and clients than those operating just within their own jurisdiction.
Isle of Man entities registering under the Crowdfunding regulations would apply for a Class 6 licence with the Isle of Man Financial Services Authority. The Class 6 licence facilitates investment from three types of client – Restricted Client, Unlimited Client and High Net Worth Client, as follows:
Restricted Client
> May invest/ lend £1,500 per deal
> May invest/ lend up to £5,000 per platform per annum
> Must sign a ‘Risk Acknowledgement’ form
Unlimited Client
> Minimum of £500,000 net worth available
> No limits on how much they may invest/ lend
> Must confirm that they are experienced in making investments into early stage, high risk, illiquid businesses
High Net Worth Client
> Minimum of £100,000 net worth available
> May invest/lend £10,000 per deal
> May invest/lend £50,000 per platform per annum
> Must confirm that they are experienced in making investments into early stage, high risk, illiquid businesses
The Class 6 licence does include minimum capital and net tangible asset requirements plus licence application and annual fees and the licensing process takes approximately 12 weeks from application.
To enquire about setting up an Isle of Man regulated Crowdfunding platform or for further information please contact the following members of our team:
Shaun Corris – Email: sc@cavendishtrust.com
