Crowdfunding industry transformed the way the business was made a decade ago, on an international level, and since then, numerous business people thrived in this important field. China makes no exception and entrepreneurs who would like to establish a crowdfunding company in this country should talk to one of our company formation specialists in China. They can give proper business advice and handle the entire registration process of such a company.
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Details about crowdfunding business
Crowdfunding platforms present varied business ideas that need financial support. Anyone with a solid business plan or project can be funded by an investor who believes it has enormous potential. In most of the cases, entrepreneurs who do not receive a bank loan or credit think of crowdfunding platforms where there are lots of chances for them to raise funds and develop their products on the market. Here is what you should know about crowdfunding companies in China:
- Crowdfunding is identified by the China Financial Stability Report as a type of small amount of funding with particular returns to investors.
- Crowdfunding is also seen as alternative financing for micro, small and medium enterprises in China.
- Big e-commerce retailers dominate the crowdfunding industry in China.
- There is no particular set of regulations for opening a crowdfunding company in China.
- Investors who support different projects receive varied rewards, donations, products, business shares, etc.
Crowdfunding companies in China can be ideal businesses to small and medium entrepreneurs who want to expand their portfolios and even consider a new business direction for their companies. For more details about how to start a crowdfunding company in China, feel free to get in touch with one of our company formation representatives in China. They can also help you open a WFOE in China, or the Wholly Foreign-Owned Enterprise, the proper business forms for most of the activities.
Crowdfunding as part of the digital economy in China
The attention of the Chinese authorities for digital economy is quite known, and the “Internet Plus” is an important set of policies introduced in 2015 to enhance the crowdfunding sector in China. Also, the national guidelines referring to the way the business is done in China should be attentively measured when establishing a crowdfunding company.
Reward-based crowdfunding companies in China
Small-scale projects presented on crowdfunding platforms in China use the reward-based model and these are usually found in sectors like agriculture, television, cinema and many more. This means that tangible or intangible compensations are offered to investors for their support. Such a business model is adopted by e-commerce businesses, but not limited to these. We remind that a business in China must be approved by the Ministry of Commerce.
Donation-based crowdfunding companies in China
In most of the cases, donation-based crowdfunding businesses are subject to rewards for social and charitable causes for investors and no other material rewards in exchange.
Crowdfunding company owners in China
Owners of crowdfunding companies in China have different reasons for dealing with this kind of business. Some are interested in financial or material returns, or some only need to develop their social status and motivation. There are many investors who believe in different projects and who are motivated and satisfied that they financed a great business idea. One should know that crowdfunding provides a niche opportunity for a particular type of investors, especially the ones who have a low budget for investments or projects.
Investing online by using crowdfunding platforms is seen as a solid business idea in China by many investors. It is important to know that reward-based crowdfunding is the most popular in China and that because investors have the privilege of seeing and testing the products before they are presented on the market. We have gathered information and facts about crowdfunding in China:
- at the beginning of 2018, there were more than 404 crowdfunding platforms registered in China;
- around USD 5,575.7 million represented the transaction value in the crowdfunding sector already registered for this year;
- the highest value of crowdfunding transactions was registered this year in China, followed by USA with approximately USD 718 million;
- by the end of 2025, RMB 300 billion will be collected in China in the crowdfunding industry.
If you would like to know more about how to register a company in China and particularly about how to establish a crowdfunding company in China, we invite you to contact our company formation agents.