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Crowdfunding for Companies in Singapore

Updated on Thursday 19th May 2016

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Crowdfunding implies obtaining funds, services or even content from large gropus of people through specialized platforms and not through the traditional way: by appealing to financial institutions or suppliers . In Singapore, crowdfunding has started to develop in the last few years after this type of fundraising has become popular in western countries. The concept is an important source of finance for start-up companies in Singapore, together with debt financing and venture funding. There are several platforms raising money in order to finance projects in Singapore, at the moment. One of the greatest benefits crowdfunding in Singapore offers is it helps companies attract investors interested in new projects.

Our specialists in company registration in Singapore can provide you with more information about the crowdfunding platforms in the city-state.

Types of crowdfunding in Singapore

As crowdfunding is currently one of the most popular ways of raising money in the city-state, the Singapore Government is considering regulating this type of activities. At the moment, crowdfunding in Singapore is divided into categories based on:

  • -          donation;
  • -          reward;
  • -          loan;
  • -          equity.

While crowdfunding through donation is based on people giving money for a project or a cause, reward-based crowdfunding relies on people giving money to fundraisers in return for various products and services. Lending and equity-based crowdfunding in Singapore are the most suitable for start-ups in the city-state. Among all of them, equity crowdfunding is the most employed by companies in Singapore.

Equity crowdfunding in Singapore

Crowdfunding based on equity is regulated by the Securities and Futures Regulations in Singapore as it implies issuing securities for public offerings and it is considered very advantageous by both enterprisers who can secure their investments and by small companies that cannot apply for a loan or have no other ways of financing their businesses.

The Monetary Authority of Singapore is also considering amending the legislation in order to provide dealing licensees to create crowdfunding platforms based on securities offerings.

If you are interested in the crowdfunding scene and need more information about the laws allowing fundraising, do not hesitate to contact our consultants in company formation in Singapore.

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