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Real estate crowdfunding in the EU is going to be simpler and safer
New EU Regulation on business crowdfunding will come into effect in November 2021. Unified European legislation leads to overall simplification and cost reduction, and also strengthens investor protection.
On 7th October 2020, the European Parliament passed Regulation (EU) 2020/1503 on European crowdfunding service providers for businesses. This concerns real estate crowdfunding related to business financing.
Prior to this, legislation on crowdfunding was mostly based on national legislation. However, the real estate crowdfunding market is seeing impressive growth, and because of this the EU legislation needed to address this subject. A harmonized EU legislation will facilitate cross-border crowdfunding and also limit the costs. Regulation (EU) 2020/1503 establishes uniform rules in the EU regarding investment-based and lending-based crowdfunding services related to business financing.
Crowdfunding platforms can now ask for an EU passport, which will allow them to get a single authorization in order to offer their services across the EU.
The new regulation will also strengthen investor protection. First of all, real estate crowdfunding project owners will be required to provide precise information to the investor regarding the crowdfunding offer. In addition, Investors will also have to demonstrate that they have the ability to face potential losses by completing a suitability and appropriateness test.
The regulation will cover and be applicable to every EU real estate crowdfunding platform raising up to 5 million euros, calculated over a period of 12 months.
Regulation (EU) 2020/1503 came into force on 10th November 2020, and will be applicable from 10th November 2021.
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Jasper Brinkman
Jasper Brinkman
"Following a devastating hotel fire in Prague, the law firm Holubová advokáti, led by attorney Klara Dvorakova, successfully represented our extended family as a group of victims. The firm navigated complex international insurance and compensation laws to defend our rights.
I would like to acknowledge the extraordinary efforts the firm had to make to bring our case to a successful compensation under extremely difficult circumstances."
Stewarts
Stewarts
"A visit to her daughter in London turned Eva's life upside down when she says she stepped into a crossing on a green light but was hit by a car. Despite her remarkable bravery, she faced a long treatment due to fractures in her pelvis, and the associated limitations and pain are likely to persist for the rest of her life. Regular headaches and impaired concentration compound her challenges.
Eva contacted us through an organization temporarily helping her manage her difficult living situation. At that time, she was destitute, relying only on subsistence payments. We were able to assist her because we specialize in personal injury and have contacts with proven colleagues abroad.
We worked with Stewarts, a UK law firm, on this case. Attorneys Klára Dvořáková and Rebecca Huxford helped Eva with the documentation in her case, explaining her options and the differences between the Czech and British systems of healthcare and social benefits reimbursement. Within a few months, thanks to the professional cooperation between the two offices, an offer of compensation from the insurance company of approximately CZK seven million was achieved. The client accepted this settlement because she did not want to deal with courts in the United Kingdom.
Subsequently, we assisted the client with related tax issues and contacted Auditone, a tax consultancy firm, which arranged for the filing of a tax return. Compensation for lost income is taxable, unlike most personal injury compensation.
'No one has done as much for me as you,' Eva said.
The fact that we were able to help Eva gives our work meaning and brings us great joy. We are very happy that, thanks to our many years of active involvement in the international professional organization PEOPIL, we can cooperate on such cases."