June 13, 2024
Advising an AI-based Fintech Company on its Global Restructuring
Introduction
The Client – a group of companies offering SaaS to financial institutions to enable them to revolutionise the lending market using proprietary Artificial Intelligence (“AI”) models.
The Client sought to revamp its existing corporate structure, which consisted of a North American holding company and branches and subsidiaries across multiple jurisdictions.
The Client engaged us to conduct an analysis and provide recommendations for overhauling its structure to optimise operations, manage existing intellectual property (“IP”), and accommodate new IP developments.
Challenge
The primary challenge involved restructuring the Client’s multi-jurisdictional corporate structure while ensuring regulatory compliance, tax efficiency, and seamless IP management. Additionally, the Client aimed to facilitate new IP development by its key personnel in a separate structure.
Strategies, Tactics, and Solutions
Our team comprehensively reviewed the Client’s existing structure, agreements, and objectives. We analysed the benefits of incorporating a new holding company in the Dubai International Financial Centre (“DIFC”) free zone, leveraging its strategic location, robust legal framework, tax advantages, and progressive regulations. We also outlined the advantages of having an existing company with the same Ultimate Beneficial Owners (“UBOs”) in the DIFC in terms of discounts and ease of incorporation.
We recommended amending the employment contracts of the Client’s key personnel to enable them to own and transfer any new IP developed by them. This involved reviewing bylaws, drafting amendments, and outlining processes for board resolutions and agreement executions.
Furthermore, we proposed a parallel structure by incorporating a new AI-licensed DIFC entity to collectively own and manage any new IP created by the Client’s key personnel.
Outcomes
Our tailored strategy provided a step-by-step roadmap for the Client’s restructuring, covering incorporation processes, agreement amendments, asset transfers, and the winding down of the existing Delaware holding company.
The recommended DIFC holding company structure offers cost efficiencies, regulatory alignment, and growth opportunities. Meanwhile, the proposed AI-licensed entity ensures collective IP ownership, reduced licensing costs, and visa benefits.
Our advice has enabled the Client to navigate the intricate restructuring process effectively while positioning the company for operational excellence and future innovation in the AI-driven fintech landscape.
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TLP Advisors is a dynamic and forward-thinking consulting, strategy and law firm specialising in providing cutting-edge solutions to our diverse clientele. With our roots deeply embedded in financial services, gaming, web3, and emerging tech, we offer unparalleled knowledge and support tailored to these rapidly evolving sectors’ unique challenges and opportunities.
TLP Advisors has consistently been the firm of choice for L1 chains, DeFi protocols, gaming companies, fintech and payment companies, foundations, funds, and investors. We have built a reputation for excellence through frequent collaborations with regulators, funds, and technology incubators. Our deep understanding of the intricate regulatory landscapes and industry dynamics allows us to provide strategic guidance and innovative solutions that empower our clients to navigate complex challenges and seize emerging opportunities.