What Crowdfunding Is
Crowdfunding brings together project owners seeking financing and individuals or entities willing to provide it, through dedicated internet platforms. Platforms take commissions on amounts raised, typically between 3% and 12% of funds collected. Three forms of financing are available: loans (with or without interest), donations (with or without non-financial consideration), and subscriptions to unlisted securities. Project owners may be legal entities or — for gratuitous loans and donations only — natural persons acting in a private capacity. Interest-bearing loans to private individuals acting outside any professional context are not available under the EU framework.
The PSFP Regime: Europe's Harmonised Platform Authorisation
EU Regulation 2020/1503 of 7 October 2020 created the prestataire de services de financement participatif (PSFP) status, applicable since 10 November 2021 to platforms proposing interest-bearing loans and subscriptions to financial securities (C. mon. fin. Art. L 547-1 to L 547-6). To benefit from this status, a platform must be authorised by the competent national authority of its home EU member state. In France, that authority is the AMF. Once authorised, a PSFP may passport its services across all EU member states without separate national licences. The €5 million per project per 12-month ceiling applies: above that threshold, a full prospectus is required.
The PSFP status replaced the former French CIP, PSI (equity platforms), and IFP (interest-bearing loan platforms) statuses. Former platforms had until 10 November 2023 to obtain PSFP authorisation to continue those services. From 10 November 2023, IFPs are restricted to gratuitous loan and donation platforms only.
Individual portfolio management of loans
Beyond facilitating direct project-specific loans, a PSFP may offer a service of individual portfolio management of loans, allocating part or all of the investor's funds to one or more projects under a personal mandate given by the investor (EU Regulation 2020/1503 Art. 2). The mandate must specify at least two of the following four criteria that each portfolio loan must satisfy: the minimum and maximum interest rate; the minimum and maximum maturity date; the range and distribution of applicable risk categories; and the probability of achieving the target rate proposed to the investor (EU Regulation 2020/1503 Art. 6).
What the PSFP Regime Delivers to Investors
The Key Investment Information Sheet
For each crowdfunding offer, a PSFP must provide investors with a standardised fiche d'informations clés sur l'investissement (KIIS) prepared by the project owner (EU Regulation 2020/1503 Art. 23). The KIIS must include the project owner's identity and the project's characteristics; clear information on the financial risks including insolvency risk and the platform's project selection criteria; commissions charged and all direct and indirect costs; financial statements in a standardised format; and hyperlinks to supplementary information. For interest-bearing loan platforms, the PSFP must also publish annually the 36-month default rates on the projects it has financed (EU Regulation 2020/1503 Art. 20).
Investor classification and suitability assessment
PSFPs must classify investors as either sophisticated (investisseurs avertis) or non-sophisticated (investisseurs non avertis) based on defined criteria. Before any investment, the PSFP must evaluate the suitability of the proposed financing for non-sophisticated investors, assessing their experience, objectives, understanding, and financial capacity (EU Regulation 2020/1503 Art. 21). Where an investment exceeds €1,000 or represents more than 5% of the investor's net worth, the PSFP must ensure the non-sophisticated investor receives a risk warning, gives explicit consent, and demonstrates their understanding of the investment and associated risks.
The four-day withdrawal right
Non-sophisticated investors benefit from a four calendar-day withdrawal period following the registration of their investment offer or expression of interest by the platform. During this period, they may withdraw their offer without justification and without any financial consequence (EU Regulation 2020/1503 Art. 22). This cooling-off right is a meaningful protection in a market where investment decisions may be made quickly under the influence of project marketing.
The secondary market bulletin board
To address the inherent illiquidity of crowdfunding investments, PSFPs are authorised to operate a bulletin board on their website where investors can advertise their interest in buying or selling securities or loans originally offered on the platform, with an optional reference price. The bulletin board must not lead to automated transactions — it is a communication facility, not a regulated trading venue (EU Regulation 2020/1503 Art. 25). Investors should not assume a secondary sale is guaranteed or that the reference price reflects a clearing price.
Gratuitous Loans and Donations: The IFP Regime
Platforms offering financing exclusively through gratuitous loans and/or donations fall outside the PSFP scope and must hold the IFP (intermédiaire en financement participatif) status, registered with Orias (C. mon. fin. Art. L 548-2). IFPs are supervised by the ACPR. Their obligations include: publishing project selection criteria; presenting each project's characteristics; providing a model loan contract; disclosing platform remuneration and all fees; and making available a lender capacity assessment tool. There is no ceiling on the amount of donations or gratuitous loans that may be raised per project under the IFP framework.
Verifying a Platform Before Investing
Before committing funds, investors should always verify that the platform holds the authorisation required for the type of financing it is offering. Authorisation does not guarantee investment quality — it confirms that investor protection obligations are being observed. Only an authorised platform may display the label "Plateforme de financement participatif régulée par les autorités françaises". The registration or authorisation number must appear in the platform's legal notices and all commercial documents.
| Form of financing | Required status (from 10 November 2023) | Register to verify |
|---|---|---|
| Securities (shares, bonds, etc.) | PSFP (authorised by AMF or equivalent EU authority) | AMF website (France); ESMA website (other EU states) |
| Interest-bearing loans | PSFP (authorised by AMF or equivalent EU authority) | AMF website; ESMA website |
| Gratuitous loans | IFP (registered with Orias) | Orias register (orias.fr) |
| Donations | IFP (registered with Orias) | Orias register (orias.fr) |
From 10 November 2023, any former CIP, PSI, or IFP that did not obtain PSFP authorisation may no longer offer securities subscriptions or interest-bearing loans. Using such a platform means the investor no longer benefits from the KIIS, the suitability assessment, or the four-day withdrawal right. Never invest on a platform before checking its current regulatory status. The presence of a reference number in the platform's legal notices is the minimum check — cross-referencing against the AMF or ESMA register is strongly recommended for significant amounts.
Assessing the Risks of a Crowdfunding Project
Securities subscriptions
An investor subscribing to unlisted securities bears the risk of total or partial loss of invested capital. Companies raising funds through crowdfunding are typically small businesses in a development phase with limited track records. Resale of unlisted securities is not guaranteed — the PSFP's bulletin board provides a communication channel but not a market. The investment should be treated as illiquid and long-term. Diversifying across multiple projects reduces concentration risk.
Loans
For participatory loans, the principal risks are non-payment of interest and non-repayment of capital in full or in part in the event of the project owner's default. The risk increases with the loan's duration. Some platforms offer lenders insurance covering a portion of potential losses. Lenders can manage concentration risk by allocating small amounts across multiple projects rather than making a single large commitment to one.
Real estate crowdfunding
An investor considering a real estate crowdfunding project should be precise about what is being financed: a specific property development (construction of a residence, conversion of offices) exposes the investor to that single project's risks, whereas financing a developer as an entity exposes them to all the developer's current and future projects. The legal form of the investment vehicle is equally important: SCI shareholders are personally liable for the SCI's debts beyond the amounts invested without limitation, unlike shareholders in a joint-stock company (SAS or SA). Where the SCI or its holding vehicle qualifies as an AIF, it must be managed by an AMF-authorised portfolio management company.
Tax Treatment of Crowdfunding Returns
Interest on loans
Interest received by a lender from a participatory loan is taxed as fixed-income investment income: default PFU rate of 12.8% income tax plus 17.2% social charges (30% total), or progressive scale on global election. Where a participatory loan or minibon becomes definitively irrecoverable, the capital loss is deductible against interest income from other participatory loans or minibons received in the same year or the five following years (CGI Art. 125-00 A). The annual deduction cap is €8,000. Social charges remain due on the gross interest received — the loss deduction has no effect on them. The loss is deductible from the year in which the claim becomes definitively irrecoverable, not from the year of default.
Donations
Donations to qualifying public-interest organisations (organismes d'intérêt général) generating an income tax reduction of 66% (or 75% for certain categories), within 20% of taxable income, with a 5-year carry-forward. The IFI reduction of 75% of amounts donated applies, capped at €50,000 per year (CGI Art. 978). Donations to commercial project owners are not deductible. Non-financial consideration of a symbolic nature does not affect deductibility.
Equity subscriptions: the IR-PME reduction
A subscription to the equity capital of a qualifying unlisted SME may generate an income tax reduction of 18% of the amount subscribed (temporarily raised to 25% for certain periods) (CGI Art. 199 terdecies-0 A). Annual ceiling: €50,000 (single individuals) or €100,000 (couples with joint taxation). Conditions: unlisted EU SME; corporate income tax; fewer than 250 employees; annual turnover ≤€50m or balance sheet ≤€43m; qualifying operational activity; five-year minimum hold. This reduction cannot be combined with the PEA wrapper for the same securities.
PEA-PME eligibility for participatory bonds
Fixed-rate bonds and participatory securities marketed by qualifying crowdfunding platforms have been eligible for inclusion in a PEA-PME since 24 May 2019, enabling investors to shelter interest income and capital gains within the PEA-PME's tax-exempt envelope after a five-year hold. Dividends and capital gains on securities outside a PEA are taxed under the standard securities regime — PFU 30% or progressive scale on election.
| Form | Return type | Default tax | Special regime or relief |
|---|---|---|---|
| Interest-bearing loan | Interest income | PFU 30% | Irrecoverable loss: deductible vs participatory interest; cap €8,000/yr; 5-year carry-forward (CGI Art. 125-00 A) |
| Gratuitous loan | No return | N/A | Irrecoverable loss: same deduction rules as interest-bearing loans |
| Donation — qualifying public-interest body | No financial return | N/A | IR reduction: 66% or 75%. IFI reduction: 75%; cap €50,000/yr (CGI Art. 978) |
| Donation — commercial project | No return or in-kind consideration | Not deductible | No tax relief |
| Equity subscription (qualifying SME) | Dividends + capital gain | PFU 30% | IR-PME reduction: 18% (or 25% in qualifying periods); ceilings €50,000/€100,000; 5-year hold (CGI Art. 199 terdecies-0 A). Alternative: PEA wrapper |
| Fixed-rate bond / participatory security | Interest + potential capital gain | PFU 30% | PEA-PME eligible since 24 May 2019; interest and gains tax-exempt after 5-year hold |
Whether you are verifying a platform's authorisation, assessing the tax efficiency of a loan or equity subscription, or understanding your rights as a non-sophisticated investor under the PSFP framework, our guides cover the full French framework for alternative finance.
Book a ConsultationThis article covers crowdfunding as an investment vehicle for individuals acting in their private capacity in France, reflecting the regulatory framework applicable from 10 November 2023 under EU Regulation 2020/1503 and its French transposition. The IR-PME tax reduction rate under CGI Art. 199 terdecies-0 A has been temporarily increased to 25% for specific periods; the applicable rate depends on the date of the subscription.
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Key Legal References
PSFP status: EU-harmonised authorisation for crowdfunding platforms; applicable since 10 November 2021; mandatory from 10 November 2023; AMF competent authority in France; EU passport across member states; €5 million per-project per 12-month ceiling
Individual portfolio loan management: PSFP may allocate investor funds across multiple projects under mandate specifying at least 2 of 4 criteria (min/max interest rate; min/max maturity; risk category range; probability of target rate)
Annual 36-month default rate publication: mandatory for interest-bearing loan platforms
Sophisticated/non-sophisticated investor classification; pre-investment suitability assessment; mandatory risk warning and explicit consent for investments over €1,000 or 5% of net worth
Four calendar-day withdrawal right for non-sophisticated investors: no justification, no financial consequence; protects against rushed investment decisions
Key Investment Information Sheet (KIIS): standardised; project-owner prepared; includes risks, costs, financials, hyperlinks to supplementary information
Secondary market bulletin board: PSFPs may operate for buying/selling of securities or loans; communication facility only; no automated transactions
IFP (intermédiaire en financement participatif): registered with Orias; supervised by ACPR; applies to gratuitous loan and donation platforms; no ceiling on amounts raised per project
Irrecoverable participatory loan loss deduction: deductible against participatory interest income in same year or 5 following years; annual cap €8,000; social charges remain due on gross interest; deductible from year of definitive irrecoverability (not year of default)
IR-PME reduction: 18% (or 25% in qualifying periods) of subscription to qualifying unlisted EU SME; ceilings €50,000/€100,000; IS-subject; ≤250 employees; qualifying operational activity; 5-year hold; cannot combine with PEA wrapper for same securities
Income tax reduction on qualifying donations to public-interest organisations: 66% or 75%; within 20% of taxable income; 5-year carry-forward
IFI reduction on qualifying donations: 75%; annual cap €50,000 of IFI reduction per year
PEA-PME: fixed-rate bonds and participatory securities on qualifying crowdfunding platforms eligible since 24 May 2019; interest and gains tax-exempt after 5-year hold
