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Crowd funding law: enhancing start-ups in Austria by a new law

21. May 2015

A proposal for a new law on crowd funding was passed by the Austrian Council of Ministers yesterday. The proposal has not passed the Austrian Parliaments yet.

The new crowd funding law is officially referred to as “law for alternative possibilities for funding”. The law’s purpose is to push start-ups, especially young entrepreneurs. The proposal is regarded as a reasonable supplement to traditional funding methods. The Vice Chancellor and Federal Minister for Economy, Reinhold Mitterlehner, is convinced of the proposal: “It supports the further development of new ideas and strengthens Austria as a business location for young entrepreneurs”. The law would on one hand facilitate access to capital and on the other hand create legal certainty and ensure protection for financiers.

Some of the specific renewals of the proposal:

  • The so-called “capital market prospectus”-requirement will raise from 250.000 Euros up to five million Euros. 100.000 Euros require a mere information sheet and one and a half million Euros crave a simplified capital market prospectus (the so-called “light” prospectus requirement).
  • A single investor can invest up to 5.000 Euros per project and year. This formal single investment limit can be exceeded if the investor has an income of more than 2.500 Euros net per month available.
  • Similar to Austrian consumer protection law, investors can withdraw within 14 days.
  • In the future, crowd funding must be operated through crowdfunding platforms which investment service providers and consultants are entitled to operate.