Great opportunities without a legal framework. How crowdinvesting works in Ukraine

A modern financing model such as crowd investing, or collective investment, is increasingly allowing businesses to raise funds from a large number of ordinary Ukrainians (private investors).

Crowdinvesting came to Ukraine from the United States. Its start is associated with the name of American President Barack Obama. In 2012, he signed the JOBS Act. The document allowed not only qualified investors, but also ordinary people to invest.

There are several online platforms where ordinary Ukrainians can invest their money, whether in complex development projects, land, energy, etc. or even in a one-room apartment near the metro or in a bath complex. The threshold for entering projects varies – from 1000 UAH to several thousand euros.

Legally unregulated potential

"Crowdinvesting has significant potential for small business development and capital raising, but in the Ukrainian reality, it remains an insufficiently protected field. Until separate legislation is introduced, as in the EU or the US, investors should act cautiously: analyze projects, engage lawyers to verify documents, and be prepared for risks," says Olga Cherevko, Managing Partner of GLS Law Company, in a commentary to LIGA.net .