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ECSPR Crowdfunding: Europe's One Licence for Property Platforms

Since November 2023 every crowdfunding platform in the European Union that raises money for businesses, property developers included, needs authorisation under the European Crowdfunding Service Providers Regulation, Regulation (EU) 2020/1503, known as ECSPR. One licence from a home regulator works in all 27 member states. Platforms such as EstateGuru, Reinvest24, Rendity, Bricks.co and BRXS operate under it, and Threeworld's profiles will carry each one's authorisation when they join the index. This page explains what an ECSPR offer gives you, the €5 million cap, the investor protections written into the regulation, how resale works on a bulletin board, and what the key investment information sheet should tell you.

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Who uses this structure on Threeworld

No platform listed on Threeworld sells under this structure today. The page is here so you can recognise it when a platform does.

Table of contents

What You Actually Own

ECSPR covers two kinds of crowdfunding, lending and investment, and property platforms use both. On a lending platform you make a loan to the project owner, usually a developer, directly or through a nominee, and your return is interest with a fixed term, often secured by a mortgage on the site. On an investment platform you buy transferable securities, shares or bonds in a company set up for the project, or in some member states admitted instruments such as units in a limited partnership. What you do not get under ECSPR is a fraction of a rented flat held for income. The regulation is designed for raising capital for a business or project, so a property offer is typically a development loan, a bridge loan or equity in a development company with a planned exit. Rental fractions in Europe tend to use other wrappers, such as the participative loan model Reental runs in Spain, or national rules outside ECSPR.

How the Regulation Works

A crowdfunding service provider applies to the competent authority of its home state, the AFM in the Netherlands, the AMF in France, the FMA in Austria, Finantsinspektsioon in Estonia, and once authorised appears on ESMA's register and may serve investors anywhere in the EU. Authorisation requires capital or insurance, segregation of client funds, conflict of interest rules and a due diligence process on every project owner, including a check for criminal records and that the project owner is not based in a high-risk jurisdiction. Each project owner may raise at most €5 million across all crowdfunding platforms in any twelve-month period. Above that, a full prospectus is needed. The platform must assess whether a project is suitable for its investors, but the regulation forbids it from paying for or receiving payment for recommending one, and it may not hold an interest in the offers it lists. The transition from national regimes ended on 10 November 2023, so an EU platform without ECSPR authorisation after that date is operating under a separate national exemption or not at all.

Who Can Buy and What Protects Them

Anyone may invest. ECSPR splits investors into sophisticated and non-sophisticated, a test of knowledge and resources rather than wealth alone, and wraps the non-sophisticated in three protections. Before a first investment the platform runs an entry knowledge test and a simulation of the investor's ability to bear loss. When a non-sophisticated investor wants to put more than the higher of €1,000 or 5% of their net worth into a single project, the platform must issue a risk warning and obtain explicit consent, though it may not refuse the investment. And every non-sophisticated investor has a four-day pre-contractual reflection period during which the investment offer can be withdrawn without reason or penalty. The regulation does not set a hard cap on how much a non-sophisticated investor may lose in a year. It relies on the warning, the test and the cooling-off period, which is a lighter touch than the DFSA's retail caps or Regulation Crowdfunding's income-based limits.

The Bulletin Board

ECSPR lets a platform run a bulletin board where investors advertise loans or securities they want to sell and buyers respond, but it forbids the platform from operating a true trading system that matches orders or sets prices. The platform may publish a reference price and must say how it was calculated, and buyers and sellers deal with each other directly. So resale exists where a platform chooses to offer the board, and it is a noticeboard rather than a market. A development loan with eighteen months to run is a hold-to-maturity instrument unless another investor on the same platform wants your position. Threeworld's guide to how you get your money out compares this with the order books tokenized platforms run.

The Key Investment Information Sheet

Every ECSPR offer comes with a key investment information sheet, the KIIS, a standardised document of no more than six pages that the project owner writes and the platform checks for completeness and clarity. It covers the project owner and the project, the main features of the offer, the risk factors, the financial position, the rights attached to the instrument, the fees, and the resale options. It must carry the regulation's standard warning that the investment is not covered by deposit guarantee or investor compensation schemes and that the investor may lose everything. The KIIS is not a prospectus and no regulator approves it. The project owner is liable for its accuracy and the platform for checking it, which is the regulation's trade: a short, readable document in exchange for no pre-approval.

What to Check Before You Buy

Find the platform on ESMA's register of crowdfunding service providers and note its home regulator and authorisation date. Read the KIIS in full. Six pages is the maximum, so there is no excuse to skip it. Identify the instrument: loan, bond or share, and in which company. A loan to a developer and a share in a project company carry different places in the queue if things go wrong. Check the security. For a loan, find the mortgage rank and the loan-to-value, and who holds the security on your behalf. Note the reflection period, four days from your offer, and use it if the KIIS raises a question. Ask whether the platform runs a bulletin board and read how its reference price is calculated.

Questions people ask

What is ECSPR?

The European Crowdfunding Service Providers Regulation, Regulation (EU) 2020/1503, a single EU licence for platforms that raise up to €5 million a year per project owner through loans or securities. It applies in full since 10 November 2023 and lets a platform authorised in one member state serve investors across the EU.

Does ECSPR cover fractional real estate?

It covers crowdfunding for property projects, typically development loans or equity in a project company, through platforms such as EstateGuru, Rendity or Bricks.co. It is not designed for selling fractions of a rented home for income, which in Europe tends to use other structures such as Spain's participative loans.

What protections do small investors get under ECSPR?

An entry knowledge test, a loss-bearing simulation, a risk warning and explicit consent when investing more than the higher of €1,000 or 5% of net worth in one project, a four-day reflection period to withdraw, and a six-page key investment information sheet for every offer.

Can I sell an ECSPR crowdfunding investment?

Only through a bulletin board if the platform runs one, where you advertise and another investor agrees a price with you directly. The regulation forbids platforms from operating a matched trading system, so most offers are held to maturity.
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