Crowdfunding has yet to gain traction in the Irish market partly due to a lack of regulation which is in stark contrast to the progressive approach of UK authorities, a new report has found.
A range of existing legislation currently governs crowdfunding — which allows businesses raise money from online contributors — but the Irish environment lacks bespoke legislation which may leave gaps in consumer protections.
A Europe-wide report on the state of crowdfunding across the continent carried out by the Amsterdam-based Crowdfunding Hub found regulatory issues to be at fault in almost all countries where the volume of crowdfunding was low.
It adds, however, that the prevalence of crowdfunding will continue to increase following the recent introduction of specific legislation in a number of countries that will help remove barriers for SMEs.
An Oireachtas Jobs, Enterprise, and Innovation committee report published also encouraged the Government to legislate for crowdfunding in order to “set the conditions for SMEs in the creative economy to thrive”.
The report recommended that the Government “should examine how to regulate the crowdfunding sector to afford better protection to both lenders and businesses”.
The Irish scenario whereby legislators appear to have been comparatively slow to account for the increasing popularity of crowdfunding is in contrast to the UK environment which is lauded by the report’s authors.
The UK is identified as “the best example” of a positive stance from government enabling progressive regulation and tax reliefs which in turn correlates with high volumes in the industry.
The outlook for the Irish crowdfunding sector which includes indigenous players such as www.FundIt.ie and www.iCrowdFund.ie along with global players such as Kickstarter and Indiegogo is somewhat less positive than that outlined by the latter’s European director for technology and design, Anastasia Emmanuel.
Speaking to the Irish Examiner in November 2015, Ms Emmanuel said Ireland had “every element to be one of the strongest crowdfunding markets in Europe”.
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