Regulatory frameworks of crowdfunding for startups in Singapore, Thailand, and Vietnam

Abstract

Access to financing is a well-documented and universal challenge for startup businesses for whom traditional lending and capital markets are generally not available. The development of alternative funding sources to enable startups and early-stage enterprises to undertake innovative new projects that would be difficult to fund through traditional channels is, therefore, of increasing interest, particularly in ASEAN where micro, small, and medium enterprises form the backbone of economic activity in most ASEAN member countries. Crowdfunding, the harnessing of the resources of a large number of people, is a significant recent phenomenon. Although the concept of crowdfunding is not new – its origins can be traced back to essentially charitable examples in the 18th century – the development of the Internet and social media has transformed crowdfunding into a modern fintech-enabled financing strategy which is expanding rapidly. This chapter reviews the nature and operation of crowdfunding and examines and compares the regulatory frameworks for startup crowdfunding in selected ASEAN countries, namely Singapore, Thailand, and Vietnam. It concludes that the exciting potential that crowdfunding offers is unlikely to be fully realized without the development of an appropriate regulatory framework which facilitates its use by a startup business while offering appropriate protection to the crowd investing in it.