Month: June 2024

Some entrepreneurs wonder about the reasons for registering their trademark. Below, we highlight five fundamentals that demonstrate the importance of registration:

1. Uso exclusivo

Once registered, the trademark becomes the property of the owner for ten years, and can be renewed successively.

This ensures the exclusivity of use and the right to oppose the registration of identical or similar trademarks.

2. Agrega valor a la empresa

Registration is part of the business consolidation process. In this way, credibility is transmitted to the consumer and user public, being a differential to influence the decision-making of your client.

3. Permite desarrollar nuevos negocios

At the end of the registration process at the INPI, the owner receives a certificate that certifies ownership of the trademark.

This document will be essential for opening franchises and licensing their use to third parties.

4. Evita problemas futuros

Imagine, after years of investment, having to start a brand practically from scratch, since a competitor has proven that your brand is similar or the same as theirs.

With registration, you will have the peace of mind of leaving the distinctive symbol of your company properly protected.

5. Seguridad para inversores

Registration provides security for the company to receive investments. If you need financing, your investors will require proof of ownership of the brand, since it is one of the company’s most important assets.

Now that you know the reasons for doing so, do you dare to register your trademark?

Our team accompanies you throughout the INPI registration process. Call Lawi Brands!

What are Phantom Shares?

If you are immersed in the Startup world you will have heard more than once about “Phantom Shares”.

As their name indicates, Phantom Shares are “phantom” or fictitious participation rights. They are offered to employees as an incentive to remain in the Company.

They are fictitious since with their granting only the economic rights of the share are recognized, but not the political or property rights over it. That is, the employee who has been assigned a Phantom Share will not be the owner of any corporate shares, but only the economic rights that he would have if he were.

The beneficiary of the Phantom Shares will not be able to participate in voting or decision-making, but in the event of a liquidity event (exit) they will have the right to collect their economic participation, which, in addition to the attraction for the collaborator who may feel part of the project, It has great attraction for shareholders.

Entre sus principales beneficios se destacan:

1. Cap Table Preservation
The founders will not be affected by the dilution of their shares compared to the entry of Phantom Shares holders. They allow Startups to offer incentives similar to real shares without diluting the company’s share capital.

2. Fiscal Benefits
As the beneficiaries of Phantom Shares do not acquire property rights, they provide an interesting advantage from a tax point of view for employees, who will not have to declare ownership over them and the profits will only be impacted when there is a liquidity event.

3. Flexibility in Compensation Structure
Companies can structure Phantom Shares flexibly, tying them to specific performance milestones or business success.

4. Team Motivation
By granting Phantom Shares, Startups can motivate key employees to work towards the company’s success by aligning their financial interests with those of shareholders.

5. Option for settlement in cash or real shares
Phantom shares are generally settled in cash equivalent to the value of the company’s shares at a given time, although some companies may choose to settle them in real shares.

Are you ready to create your Phantom Shares incentive plan? Contact us!

If you have a Startup you have probably heard of the striking term “Cayman Sandwich”.

But what is it?

It is a legal structure that involves the use of a parent company in the Cayman Islands with a subsidiary in Delaware, USA in the middle and below it an operating company in the Latin American country where the Startups actually operate (hence the term Sandwich , with the Delaware LLC in the middle).

It is used by Startups to take advantage of tax advantages and regulatory flexibility of this jurisdiction. When looking for investment rounds, jurisdiction is one of the first things that accelerators and venture investment funds (VCs) will be interested in.

Main benefits

1. Tax Benefits: There are no – or very low – taxes on income, capital gains such as profits, dividends, and liquidation in the event of EXIT. Additionally, unlike Delaware C corporations, Cayman Islands holdings are not subject to double taxation (corporate tax + income tax).

2. Regulatory Benefits: The Cayman Islands offers regulatory flexibility, allowing companies to structure their operations efficiently and adapt to changing regulatory requirements.

3. Financial Confidentiality: shareholder confidentiality prevails.

How does it work?

Sandwich Top: Cayman Holding.

• Investments are made directly in Cayman Holding.

• La gobernanza de la startup y todos los acuerdos de financiación se rigen generalmente por la ley de las Islas Caimán, que los inversores prefieren, ya que está fuertemente influenciada por la tradición legal del Reino Unido y tiene un gran parecido con la ley de Delaware.

Middle of the Sandwich: LLC Delaware.

• Acts as a “shell” or blocker between the Local / Operational Subsidiary and the Holding in Cayman.

Bottom of the Sandwich: Operating Subsidiary.

• It will be in charge of carrying out all operations, contracting and local taxation in each of the countries where it operates. This subsidiary will be the one that bears the risks of the operation.