On March 14th 2014, Japan’s Prime Minister Abe and his Cabinet approved a de-regulation of equity fundraising to the Financial Instruments and Exchange Law paving the way for companies, especially startups, to raise finance through crowdfunding.
PM Abe’s ‘Abenomics’, is set to encourage SMEs growth and development, thereby encouraging domestic demand and finally overcoming two decades worth of deflation. Mr. Aso, Japan’s Financial Minister states that the reform “is necessary to strengthen the provision of risk money and boost the confidence in the financial market”.
Japan has closely considered crowdfunding platforms in the US and UK, and have come up with regulations that seem best suited for Japanese society.
Currently, private companies are prohibited from advertising offerings to the public. However, once the amended law comes into effect, private companies will be able to crowdfund up to $1 million through an online platform. Anyone will be allowed to invest in equity crowdfunding, though there still will be a restriction to a maximum of $5,000 in equity offerings.
The regulation will demand crowdfunding operators and the issuing company to be transparent by publishing all data, educating investors.
The Japanese are sitting on savings worth an approximate $8.39 trillion, by far the largest in the world. There is great market potential in Japan, which has yet to be fully exploited. Unfortunately, less than 5% of total savings has entered the crowdfunding market, rather unimpressive. But are the Japanese actually ready to start investing?
Japan’s risk adverse nature is said to be changing. The March 11th 2011 earthquake has sparked momentum for the industry as crowdfunding was used to connect donors and those who desperately needed funds to rebuild their lives. It appears that their mindset is slowly changing. Kaz Ohmae, President of Crowd Securites Japan and CrowdBank, is expecting some 10,000 investors using the CrowdBank platform by March of next year.
There is no doubt that Japan holds vast potential in the crowdfunding industry. However, it is up to crowdfunding platforms to provide meaningful reasons for savers to invest in ideas rather than keeping their money locked up in a bank that provides a close to zero interest rate. Only time will tell if crowdfunding will become mainstream in the near future.
References:
Ikeda, M. (2013) Crowd Securities Japan to launch investment crowdfunding platform. Thebridge.jp.
Kyodo. (2014) Cabinet Oks bill that would push crowdfunding. Japantimes.co.jp
Root, A. (2014) Crowdfunding in the Land of the Rising Sun. Crowdsourcing.org
Image Credit to: themonnie. http://bit.ly/1j7g4Wp
Japan has closely considered crowdfunding platforms in the US and UK, and have come up with regulations that seem best suited for Japanese society.
Currently, private companies are prohibited from advertising offerings to the public. However, once the amended law comes into effect, private companies will be able to crowdfund up to $1 million through an online platform. Anyone will be allowed to invest in equity crowdfunding, though there still will be a restriction to a maximum of $5,000 in equity offerings.
The regulation will demand crowdfunding operators and the issuing company to be transparent by publishing all data, educating investors.
The Japanese are sitting on savings worth an approximate $8.39 trillion, by far the largest in the world. There is great market potential in Japan, which has yet to be fully exploited. Unfortunately, less than 5% of total savings has entered the crowdfunding market, rather unimpressive. But are the Japanese actually ready to start investing?
Japan’s risk adverse nature is said to be changing. The March 11th 2011 earthquake has sparked momentum for the industry as crowdfunding was used to connect donors and those who desperately needed funds to rebuild their lives. It appears that their mindset is slowly changing. Kaz Ohmae, President of Crowd Securites Japan and CrowdBank, is expecting some 10,000 investors using the CrowdBank platform by March of next year.
There is no doubt that Japan holds vast potential in the crowdfunding industry. However, it is up to crowdfunding platforms to provide meaningful reasons for savers to invest in ideas rather than keeping their money locked up in a bank that provides a close to zero interest rate. Only time will tell if crowdfunding will become mainstream in the near future.
References:
Ikeda, M. (2013) Crowd Securities Japan to launch investment crowdfunding platform. Thebridge.jp.
Kyodo. (2014) Cabinet Oks bill that would push crowdfunding. Japantimes.co.jp
Root, A. (2014) Crowdfunding in the Land of the Rising Sun. Crowdsourcing.org
Image Credit to: themonnie. http://bit.ly/1j7g4Wp
About the author - Jasmien Cels
Jasmien is currently studying a bachelors in Business Studies from Cass Business School in London while interning at Crowd Valley. Originally from Belgium, she grew up in Switzerland, Ethiopia, USA, and Japan.
She is very passionate about the start-ups, entrepreneurship, technology, and travelling; she aspires to one day become an entrepreneur.
Jasmien is currently studying a bachelors in Business Studies from Cass Business School in London while interning at Crowd Valley. Originally from Belgium, she grew up in Switzerland, Ethiopia, USA, and Japan.
She is very passionate about the start-ups, entrepreneurship, technology, and travelling; she aspires to one day become an entrepreneur.
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