Fintech Market Overview

This article does not constitute legal advice.

Crowdfunding in Portugal

Fintech Software

In what concerns crowdfunding platforms, Portuguese law sets out requirements and conditions applicable to the corporate entities managing these platforms, which are subject to the CMVM's supervision when they are either collaborative equity-based or loan-based platforms. These management entities of crowdfunding platforms are subject to prior registry and authorisation with the CMVM. Their application must be accompanied by the required documentation, which includes the entity's corporate details, structure and beneficial ownership, the managers' identification and fit and proper documentation, business plan and model, and an indication of whether it should be considered a financial intermediary or an agent thereof, as well as evidence of compliance with the minimum financial requirements. Minimum financial requirements are either (1) a minimum share capital of €50,000; (2) an insurance policy covering a minimum of €1 million per claim, and a minimum of €1.5 million in aggregate claims per year; or (3) a combination of both (1) and (2) that ensures proper similar coverage.1

Crowdfunding schemes are gaining some traction. There are now six management entities of crowdfunding platforms registered with the CMVM, the majority of which operate in the loan-based platforms sector. Further developments may arise in this field following the entry into force of the Regulation on European Crowdfunding Service Providers for Business and as the market develops and market players become more sophisticated and numerous, in which case movements towards the securitisation of loan portfolios originating from these platforms may begin to be noticed in the medium to long term.1

Notwithstanding, current securitisation law (Decree Law No. 453/99, as amended) defines which entities may qualify as originators of receivables for securitisation purposes and these are currently limited to the Portuguese state and other public legal persons, credit institutions, financial companies, insurance firms, pension funds and pension fund management companies. However, entities that have their accounts of the previous three years legally certified by an auditor registered with the CMVM may also assign loans for securitisation purposes; this may open the door to crowdfunding entities being able to enter into securitisation and other structured finance transactions, which were traditionally reserved to banks and other incumbents. Nevertheless, owing to the nature of the entities resorting to crowd-lending platforms for funding, as well as those managing the platforms, the movement towards securitisation may still take some time.1

In June 2019, Regulation (EU) 2019/1150 of the European Parliament and of the Council on promoting fairness and transparency for business users of online intermediation services came into force, placing certain obligations upon providers of online intermediation services, simultaneously (1) constituting information society services, (2) allowing business users to offer goods or services to consumers, and (3) provided to business users on the basis of contractual relationships (such as platforms' terms of use). Obligations include transparency and intelligibility requirements for platforms' terms and conditions, duties of notification to business users concerning changes to those terms and conditions, limitations on the restriction, suspension and termination of online intermediation services, explanation of ranking parameters (when the online intermediation services include these rankings), transparency with respect to the differentiated treatment of business users and the service provider's access to personal data through the platform, and the setting up of an internal complaint-handling system with specific characteristics (without prejudice against the possibility of business users resorting to mediation).1

Payment services in Portugal

Fintech in Portugal

Fintech in other countries

Let's introduce you

Portuguese Fintech Lawyers

Denis Polyakov

Denis Polyakov

Comprehensive legal services for businesses on corporate, tax law, cryptocurrency legislation, investment activities

Kristina Berkes

Kristina Berkes

Participation as a lawyer at investment venture funds, leading venture M&A deals in IT, supporting iGaming and business assets

Viacheslav Losev

Viacheslav Losev

Legal support for FinTech and Blockchain projects

  1. https://thelawreviews.co.uk/title/the-financial-technology-law-review/portugal
Offer for startups

Fast start for $5K

You can launch your platform by paying $5000 initially and the rest after 6 months if your business grows