Crowdfunding - the new way to finance a start-up?

Eveline Deutsch
Eveline Deutsch
Senior Manager
Crowdfunding - the new way to finance a start-up?

Crowdfunding can be a solution to finance a start-up. We explain the four types of crowdfunding.

After a new business idea, the question of financing often arises. Banks or credit institutions are not always prepared to finance a start-up company, or at least not to the extent that the founders would like. Crowdfunding can be a solution. In the following we will show you the different types of crowdfunding and the legal and tax consequences of such financing.


Often the new company does not have sufficient resources and is dependent on outside capital. However, the uncertainty as to whether the loan given can be repaid and whether the business idea will develop positively is very great and often ends with a negative decision from the banks or credit institutions.

Crowdfunding offers another possible form of financing. Via the Internet, a so-called crowdfunding platform, the person seeking capital puts the project out to tender and hopes that various donors will contribute a partial amount to the financing. If sufficient financial resources are contributed, the business idea can be implemented or the company can be founded.

However, this fundraising, i.e. crowdfunding, does not yet say anything about the type and form in which the financial resources are made available to the founders and how this is handled in terms of taxation.

4 Types of crowdfunding

The following four types of crowdfunding can be distinguished:

Crowdlending (lending based, peer-to-peer)

According to OR Art. 312 ff., this form of financing is a loan, because the lenders provide the borrower with a certain amount of money for a certain period of time. Repayment can be made with or without interest.

Crowdinvesting (equity based)

Investors participate in the company, usually in the form of shares or share certificates. However, the voting rights of the investors are usually restricted so that they do not have control over the company.

Crowddonating (donating based)

The capital contribution is made without consideration by means of a donation or gift. The willingness to make a gift is a mandatory prerequisite, but is also linked to a condition. The capital must be used for a specific purpose. Should the foundation not take place after all due to insufficient funds received, the donation or gift must be repaid.

Crowdsupporting (reward based, crowdsponsoring)

The capital is provided in return for a consideration. This may be of an intangible or material nature.

The distinction between the various forms of crowdfunding can be difficult in practice.

Legal and tax consequences of crowdfunding

As crowdfunding is a new form of financing, there is no case law on this yet. Nor is it possible to fall back on customary law. Thus, the legal and, above all, the tax consequences are assessed on the basis of the existing legal foundations.

Depending on the type of crowdfunding, different tax consequences arise, e.g. capital and wealth taxes, withholding taxes or stamp duties. Marketing or brokerage services may also trigger taxes. It is therefore important to distinguish precisely which cash flow is subject to which tax. Particularly in the case of mixed forms of crowdfunding, it is a good idea to be aware of the consequences of the respective form of financing due to the different legal structures. In addition, the resulting tax consequences must be analysed in detail.


We will be happy to assist you with the legal and tax clarifications and provide you with advice tailored to your needs.