Crowdfunding in Singapore 2025
A growing number of Singaporeans are turning to crowdfunding as a legal means of raising money for a range of objectives, such as obtaining the initial funding for a new company or sponsoring an endeavour. Crowdfunding entails collecting money from a big group of individuals, usually via an internet platform.
The objective of this post is to outline the landscape of crowdfunding in Singapore and provide information to those who want to make use of crowdfunding to raise funding to start or grow their business in Singapore. So, without any further ado, it’s dive into it.
What is Crowdfunding?
Crowdfunding is a method of raising funds for a business or project by collecting small amounts of money from a large number of individuals, typically via online platforms. While the term crowdfunding is relatively new, the core concept—pooling resources to support ventures—dates back centuries. A classic example is the formation of the British East India Company in 1599 through joint-stock investments.
In the modern context, crowdfunding in Singapore has gained significant traction due to its efficiency and accessibility. Rather than going through the complex, paperwork-heavy, and expensive processes typically involved with traditional financial institutions like investment banks or venture capital firms, entrepreneurs in Singapore can now turn to online crowdfunding platforms to quickly raise funds.
Why is Crowdfunding in Singapore Gaining Popularity?
The appeal of crowdfunding in Singapore lies in its simplicity and inclusivity. Here’s why it’s becoming a go-to funding source for many startups and SMEs:
- Reduced Barriers to Entry: Entrepreneurs can launch campaigns with minimal documentation.
- Faster Access to Capital: Fundraising via crowdfunding platforms is often quicker than traditional routes.
- Digital Infrastructure: Singapore’s tech-savvy population and advanced digital economy provide an ideal environment for crowdfunding to thrive.
- Regulatory Support: The Monetary Authority of Singapore (MAS) has created clear regulations for securities-based crowdfunding (such as debt and equity crowdfunding), which adds trust and security to the ecosystem.
Crowdfunding Regulations in Singapore
While crowdfunding in Singapore has emerged as a promising funding alternative for startups and SMEs, it is not without risks—including the potential for fraud, misuse of investor funds, or platform misconduct. Fraud can be committed by either the campaign creator or even unscrupulous investors exploiting platform loopholes.
To ensure a secure and transparent crowdfunding ecosystem, the Monetary Authority of Singapore (MAS) has implemented a robust regulatory framework. These rules aim to protect both investors and entrepreneurs while maintaining the integrity of the capital markets.
Regulatory Oversight by MAS
In Singapore, crowdfunding activities are regulated primarily under:
- The Securities and Futures Act (Cap. 289) (SFA) – This governs offers of securities, debentures, and other capital market products.
- The Financial Advisers Act – If the platform provides financial advice on investment products.
Platforms that deal with securities-based crowdfunding—such as equity crowdfunding or peer-to-peer (P2P) lending—must hold a Capital Markets Services (CMS) license issued by MAS. This ensures:
- The platform adheres to compliance standards.
- There are safeguards for retail and accredited investors.
- Financial disclosures and risks are clearly communicated.
Additionally, if a crowdfunding platform advises users on investment opportunities, it may also require a Financial Adviser’s License (FAL).
Regulations for Crowdfunding Platforms
Because platforms can act as financiers, they could require a Capital Market Services License (CMS) which can be granted by MAS. 2nd Schedule of Regulated Activities Part I includes a comprehensive listing of financial activities which fall within the scope of this regulation.
In general, models of community for crowdfunding (reward-based and donation-based) are not subject to MAS; therefore, only models that generate financial returns from crowdfunding (equity-based and lending-based) require the license.
Regulations for Crowdfunding Investors
Singapore law defines a person who lends money using a crowdfunding platform to be a money-lender. Anyone engaged in the business of lending money is required to get authorization for money-lenders through Singapore’s Registrar of Moneylenders.
This license requires an initial deposit of at least S$20,000 and an experienced & qualified person responsible for managing the business of money lending.
The exception can be granted when the loan is made exclusively to businesses or accredited investors. This kind of lender is considered the “excluded moneylender”. The majority of crowdfunding in Singapore platforms use this exemption for investors.
Regulations for Companies Seeking Crowdfunding
Crowdfunding in Singapore may involve various kinds of relationships between an investor and the business.
Before you begin to develop your crowdfunding in Singapore strategy, it is crucial to understand the distinctions between these types of relationships:
- Crowdfunding that is based on lending
- Crowdfunding based on equity
- The crowdfunding model is based on rewards.
- Donations-based crowdfunding
Additional information about the various kinds of crowdfunding in Singapore, as well as the applicable Singapore regulations, are provided in the sections below.
Forms of Crowdfunding in Singapore
1. Lending-Based Crowdfunding
This kind of arrangement is also known as peer-to-peer lending. In this scenario, many people loan money to businesses. The company that is the recipient provides the legal obligation to repay the loan with an agreed-upon rate of interest.
The agreement may also stipulate the repayment date that is predetermined. The lending is mostly done via peer-to-peer crowdfunding platforms like FundedHere, Fundnel, InvestaCrowd, etc.
Small offers
The exemption is only applicable if the sum of funds of money raised by the securities issuer within any 12 months is not more than SG$5 million (or equivalent in another currency).
MAS has also altered the capital requirements of crowdfunding in Singapore companies from S250,000 to S$ 500.000. The company still has to be able to disclose the main risks of the investment to investors of all kinds.
Private advertisements
To be eligible for this exemption, the offer cannot be distributed to more than 50 people in any 12 months, and should not be accompanied by advertising that attracts people’s attention people to an offer.
Trustees and entities are considered to be one entity when the entity or trust is not formed primarily to acquire the securities which are the subject of the offer.
However, if a trust or entity is created specifically with the intended acquisition of the security each person who is a member or trust beneficiary is counted separately.
Offers for institutions or investors who are accredited
These offers do not require a prospectus. If you are using an accredited crowdfunding platform soliciting crowdfunding in Singapore based on lending, the platform will ensure that all the rules above are followed. Some of these platforms are Funding Societies, MoolahSense, Zopa, Upstart, etc.
2. Equity-Based Crowdfunding
Equity crowdfunding allows investors to purchase shares in a private company, becoming partial owners entitled to a share in future profits. Unlike an IPO, these companies are not publicly listed, and their shares are illiquid, meaning they cannot be easily sold on secondary markets.
Equity crowdfunding is popular among startups due to the high-growth potential offered to investors in exchange for early capital.
Regulatory Overview:
- Regulated under the Securities and Futures Act (SFA).
- Platforms offering equity-based crowdfunding must hold a Capital Markets Services (CMS) license from MAS.
- Platforms must assess investor suitability and disclose risks clearly.
3. Donation-Based Crowdfunding
In this model, individuals donate money to causes without expecting any return. It is commonly used by charities, social enterprises, or individuals raising money for personal needs (e.g., medical emergencies or community projects).
Regulatory Guidelines:
- Platforms must ensure transparency and accountability.
- Fundraisers must comply with Singapore’s Charities (Fund-Raising Appeals for Local and Foreign Charitable Purposes) Regulations.
- Fundraisers are encouraged to adhere to the Commissioner of Charities’ (COC) Code of Practice for online charitable appeals.
- Proper donor records and use of funds for intended purposes are mandatory.
4. Rewards-Based Crowdfunding
In this model, contributors provide funds in exchange for a non-monetary reward, such as a product, service, or experience. For example, contributors might back a tech gadget, film production, or music album in return for early access, merchandise, or credits.
Characteristics:
- No financial return or ownership.
- Rewards can be tangible (products) or intangible (experiences).
- Common on platforms like Kickstarter and Indiegogo.
Regulatory Note:
- This model does not fall under MAS regulation since it does not involve securities or financial returns.
- However, if it is a charity-related appeal, it may be subject to the Charities Act and COC’s Code of Practice—particularly when run by non-profits or social enterprises.
Conclusion
Crowdfunding has grown to be a well-liked and practical alternative funding option in Singapore as it reduces the likelihood of becoming involved with the excessive paperwork, and exorbitant costs connected with an investment banking institution. The Monetary Authority of Singapore (MAS) has seen the potential of crowdfunding and implemented rules to foster a safe and reliable atmosphere for everyone working in the sector. Nevertheless, it is essential to run a successful campaign in order to collect funds using crowdfunding platforms.
Therefore, before participating in crowdfunding projects, it is crucial to weigh all possible dangers and benefits. You can accomplish your goals if you develop the right structure and plan.
If you are an entrepreneur looking to set up your business presence in Singapore, get in touch with our business experts today.
FAQ’s
Yes, crowdfunding is legal in Singapore. However, it is regulated by the Monetary Authority of Singapore (MAS), especially for equity-based and lending-based crowdfunding. Platforms must obtain a Capital Markets Services (CMS) license if they deal with securities or loans.
Yes, if your platform offers equity crowdfunding or peer-to-peer lending, you must apply for a CMS license from MAS. For donation-based or reward-based crowdfunding, no CMS license is needed, but fundraisers may still need to comply with Charities Act regulations and COC’s Code of Practice.
MAS regulates:
- Equity crowdfunding (offering shares in a company)
- Lending-based crowdfunding (peer-to-peer loans)
Donation-based and reward-based crowdfunding are not regulated by MAS but may fall under other laws such as the Charities Act.
Yes, foreign investors can invest through Singapore-based crowdfunding platforms, but their participation may be subject to KYC (Know Your Customer) and AML (Anti-Money Laundering) checks as required by MAS.
