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Crowdfunding in Hong Kong

Jun 24, 2014
With the increased international profile of crowdfunding as a successful fundraising tool for a variety of projects, the Securities and Futures Commission in Hong Kong (SFC) have recently issued a guidance note to the public on this subject.1  

Hong Kong does not have an equivalent of the JOBS Act in the United States so that the use of Crowdfunding to raise money in return for shares, debt instruments or interests in collective investment schemes (“CIS”) (which are all classified as "Securities" under the Securities and Futures Ordinance (Cap. 571) (“SFO”)) had been seen as presenting significant issues under local law.

The SFC have reaffirmed this position in their notice, underlining that:
  1. anyone who issues an offer to the public (including over the internet) to acquire securities or participate in a CIS commits an offence unless it is either an authorised issue or an issue for which a specified exemption applies; and
  2. the offering document for the shares or debentures requires a registered prospectus, again unless a specific exemption applies.
In relation to (1) and (2) above, as the exemptions largely relate to targeted investments to specific persons, this means that general offers made over the internet are highly likely not to be exempt.

The SFC have further underlined that, even if the offering is exempt, the operators of the platform may need to be licensed as one of the types of securities-related intermediaries under the SFO.

Whilst this does not mean that all crowdfunding is illegal in Hong Kong, where shares and other securities are offered as part of the process, then this will raise significant legal issues and regulatory hurdles.

We would be happy to assist on any enquiries with potential crowdfunding projects and please contact Chris Lambert at 2861 8417 or email to

1 "Notice to Potential Regulations Applicable to and Risks of Crowd-funding Activities" - 7 May 2014



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