Fragmentation of legal regulation of crowdfunding in the Baltic States: the need for a single regulation at the EU level

Abstract

Crowdfunding is usually defined as the possibility of obtaining a loan through a platform set up on the Internet. Therefore, it is considered a relatively new alternative option of attracting financing, allowing persons to easily realize their business ideas to attract the necessary funding from investors. In turn, the investors have an opportunity to increase their capital by investing their funds in specific projects and business ideas. In the Baltic States, the Republic of Lithuania is the only country that has introduced a framework for crowdfunding. In turn, the Republic of Estonia and the Republic of Latvia apply the existing regulation, which is related to the credit institutions and beneficiaries, payment services laws, and other laws which by any means address the crowdfunding service and platforms. Therefore, the master’s thesis analyzes the current legal framework in the Baltic States, its fragmentation, the development of such alternative financing, and risks associated with crowdfunding. Due to the fact that each Member State has tried to regulate the crowdfunding field internally, the divergence of legal frameworks has significantly limited the development of crowdfunding services across the EU. The purpose of the thesis work is to compare the existing legal framework in the Baltic States with the newly introduced crowdfunding regulation in the EU, which will apply from November 2021