By Av. Christian Bogaru, Managing Partner, Bogaru, Braun Noviello & Associates
- Short considerations
Crowdfunding in Romania is in an early stage, although probably the earliest project of this kind was the construction of one of the Romanian architectural and cultural symbol – the Romanian Athenaeum, over 125 years ago in Bucharest (opened in February 14, 1888).
- The Donations or Rewards Model
Most of the Romanian crowdfunding platforms promote donations, usually with certain non-monetary rewards:
- Mindfruit supports all kind of projects (technologic, publishing etc.), that recently adapted its financing policy from “all or nothing” to “flexible financing”, pursuant to which the initiator keeps all the amounts collected, provided that the amounts raised will be used for the project and the doner receives the promised reward.
- Crestem Idei promotes projects for development of the community, design/graphic, film, photography, sport, writing and publishing. Since its creation, it helped financing 6 projects and collected more than EUR 11.000.
- Multifinantare Platform supports financing of “creative” projects and charity projects from a broad range of activities (such as agriculture, culture, social etc.), against rewards (for an example, a project for development of an apiary offers rewards consisting in naming a beehive and collecting the bee honey and wax from the same).
- Crowdfunding regulation in Romania
At this time, Romania does not have any such regulatory framework of Crowdfunding. All thought, Romanian legislation in forced a law that is similar to crowdfunding. A main difference is that the individuals do not submit money thought financial platforms.
Law no. 120/2015 to stimulate individual investors – business angel (“Law no. 120/2015”) provides the requirements that need to be accomplished by individuals in order to benefit for tax breaks following the acquisition of shares through investments in companies. Law no. 120/2015 provides many restrictions on granting investment by individuals.
In order for the individuals to invest in small and micro enterprises, the companies shall meet the requirements provided by the aforementioned law.The individual may participate with money and following the financial participation, the individual may obtain shares or debt instruments which give investors the right to charge interest.