ICLG

The International Comparative Legal Guide to: Fintech 2019

3rd Edition A practical cross-border insight into fintech law

Published by Global Legal Group, with contributions from:

A&L Goodbody Gilbert + Tobin QUORUS GmbH AEI Legal LLC Gleiss Lutz Schoenherr Anderson Mōri & Tomotsune Goldfarb Seligman & Co. Shearman & Sterling LLP Anjarwalla & Khanna Gorriceta Africa Cauton & Saavedra Shearn Delamore & Co. Appleby Gorrissen Federspiel Silk Legal Co., Ltd. BAHR GVZH Advocates Slaughter and May Bär & Karrer Hajji & Associés Stanford Law School BBA Hudson Gavin Martin The Blockchain Boutique BonelliErede Kim & Chang Traple Konarski Podrecki & Partners Bonn Steichen & Partners König Rebholz Zechberger Attorneys at Law Triay & Triay Bredin Prat Lee and Li, Attorneys-at-Law Trilegal De Brauw Blackstone Westbroek Llinks Law Offices Udo Udoma & Belo-Osagie Democritos Aristidou LLC Lloreda Camacho & Co Uría Menéndez ENSafrica Mannheimer Swartling Uría Menéndez – Proença de Carvalho Erciyas Law Office Mattos Filho, Veiga Filho, Marrey Jr e Vodanovic Legal Evris Law Firm Quiroga Advogados Walalangi & Partners (in association FINREG PARTNERS McMillan LLP with Nishimura & Asahi) Galicia Abogados, S.C. PFR Attorneys-at-law Walkers The International Comparative Legal Guide to: Fintech 2019

General Chapters:

1 Artificial Intelligence in Fintech – Rob Sumroy & Ben Kingsley, Slaughter and May 1

2 Cross-Border Financing of Fintech: A Comparison of Venture and Growth Fintech Financing Trends in Europe and the United States – Jonathan Cardenas, Stanford Law School 7

Contributing Editors Country Question and Answer Chapters: Rob Sumroy and Ben Kingsley, Slaughter and May 3 Australia Gilbert + Tobin: Peter Reeves 14

Publisher 4 Austria PFR Attorneys-at-law: Bernd Fletzberger 21 Rory Smith Sales Director 5 Bermuda Walkers Bermuda: Natalie Neto & Rachel Nightingale 26 Florjan Osmani 6 Brazil Mattos Filho, Veiga Filho, Marrey Jr e Quiroga Advogados: Account Director Larissa Lancha Alves de Oliveira Arruy & Fabio Ferreira Kujawski 31 Oliver Smith 7 Canada McMillan LLP: Pat Forgione & Anthony Pallotta 37 Senior Editors Caroline Collingwood 8 Cayman Islands Appleby: Peter Colegate & Anna-Lise Wisdom 44 Rachel Williams Sub Editor 9 China Llinks Law Offices: David Pan & Xun Yang 49 Amy Norton 10 Colombia Lloreda Camacho & Co: Santiago Gutierrez & Juan Sebastián Peredo 55 Group Consulting Editor Alan Falach 11 Cyprus Democritos Aristidou LLC: Christiana Aristidou 60 Published by 12 FINREG PARTNERS: Ondřej Mikula & Jan Šovar 67 Global Legal Group Ltd. 59 Tanner Street 13 Denmark Gorrissen Federspiel: Morten Nybom Bethe & Tue Goldschmieding 72 London SE1 3PL, UK Tel: +44 20 7367 0720 14 France Bredin Prat: Bena Mara & Vincent Langenbach 78 Fax: +44 20 7407 5255 Email: [email protected] 15 Germany Gleiss Lutz: Dr. Stefan Weidert & Dr. Martin Viciano Gofferje 85 URL: www.glgroup.co.uk 16 Gibraltar Triay & Triay: Javi Triay & Jay Gomez 91 GLG Cover Design F&F Studio Design 17 Hong Kong Slaughter and May: Benita Yu & Jason Webber 97

GLG Cover Image Source 18 Iceland BBA: Stefán Reykjalín & Baldvin Björn Haraldsson 105 iStockphoto Printed by 19 India Trilegal: Kosturi Ghosh & Adhunika Premkumar 112 Stephens & George 20 Indonesia Walalangi & Partners (in association with Nishimura & Asahi): Print Group May 2019 Luky I. Walalangi & Hans Adiputra Kurniawan 119

Copyright © 2019 21 Ireland A&L Goodbody: Claire Morrissey & Peter Walker 124 Global Legal Group Ltd. All rights reserved 22 Israel Goldfarb Seligman & Co.: Ariel Rosenberg & Sharon Gazit 134 No photocopying 23 BonelliErede: Federico Vezzani & Tommaso Faelli 140 ISBN 978-1-912509-70-6 ISSN 2399-9578 24 Japan Anderson Mōri & Tomotsune: Ken Kawai & Kei Sasaki 146

25 Kenya Anjarwalla & Khanna: Sonal Sejpal & Dominic Rebelo 152 Strategic Partners 26 Korea Kim & Chang: Jung Min Lee & Samuel Yim 157

27 Liechtenstein König Rebholz Zechberger Attorneys at Law: Dr. Helene Rebholz & MMag. Degenhard Angerer 164

28 Luxembourg Bonn Steichen & Partners: Pierre-Alexandre Degehet 169

29 Malaysia Shearn Delamore & Co.: Timothy Siaw & Christina Kow 174

PEFC Certified 30 Malta GVZH Advocates: Dr. Andrew J. Zammit & Dr. Kurt Hyzler 181

This product is from sustainably 31 Mexico Galicia Abogados, S.C.: Claudio Kurc & Arturo Portilla 186 managed forests and controlled sources

PEFC/16-33-254 www.pefc.org 32 Morocco Hajji & Associés: Nihma Elgachbour & Ayoub Berdai 192

33 Netherlands De Brauw Blackstone Westbroek: Björn Schep & Willem Röell 197

34 New Zealand Hudson Gavin Martin / The Blockchain Boutique: Andrew Dentice & Rachel Paris 204

Continued Overleaf

Further copies of this book and others in the series can be ordered from the publisher. Please call +44 20 7367 0720

Disclaimer This publication is for general information purposes only. It does not purport to provide comprehensive full legal or other advice. Global Legal Group Ltd. and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this publication. This publication is intended to give an indication of legal issues upon which you may need advice. Full legal advice should be taken from a qualified professional when dealing with specific situations.

WWW.ICLG.COM The International Comparative Legal Guide to: Fintech 2019

Country Question and Answer Chapters:

35 Nigeria Udo Udoma & Belo-Osagie: Yinka Edu & Tolulope Osindero 210

36 Norway BAHR: Markus Nilssen & Vanessa Kalvenes 216

37 Peru Vodanovic Legal: Ljubica Vodanovic & Alejandra Huachaca 223

38 Philippines Gorriceta Africa Cauton & Saavedra: Mark S. Gorriceta 229

39 Traple Konarski Podrecki & Partners: Jan Byrski, PhD, Habil. & Karol 234

40 Portugal Uría Menéndez – Proença de Carvalho: Pedro Ferreira Malaquias & Hélder Frias 242

41 Russia QUORUS GmbH: Maxim Mezentsev & Nikita Iovenko 250

42 Singapore AEI Legal LLC: Andrea Chee & Law Zhi Tian 258

43 Schoenherr: Jurij Lampič 265

44 South Africa ENSafrica: Angela Itzikowitz & Ina Meiring 271

45 Spain Uría Menéndez: Leticia López-Lapuente & Isabel Aguilar Alonso 278

46 Sweden Mannheimer Swartling: Anders Bergsten & Martin Pekkari 286

47 Switzerland Bär & Karrer: Dr. Daniel Flühmann & Dr. Peter Ch. Hsu 292

48 Taiwan Lee and Li, Attorneys-at-Law: Robin Chang & K. J. Li 300

49 Thailand Silk Legal Co., Ltd.: Dr. Jason Corbett & Don Sornumpol 306

50 Turkey Erciyas Law Office: Nihat Erciyas & Miraç Arda Erciyas 311

51 Evris Law Firm: Sergii Papernyk & Alexander Molotai 317

52 United Kingdom Slaughter and May: Rob Sumroy & Ben Kingsley 322

53 USA Shearman & Sterling LLP: Reena Agrawal Sahni & Eli Kozminsky 329

EDITORIAL

Welcome to the third edition of The International Comparative Legal Guide to: Fintech. This guide provides corporate counsel and international practitioners with a comprehensive worldwide legal analysis of the laws and regulations of fintech. It is divided into two main sections: Two general chapters. These chapters provide an overview of artificial intelligence in fintech, and of the recent trends and challenges in the financing of cross-border fintech start-ups. Country question and answer chapters. These provide a broad overview of common issues in fintech laws and regulations in 51 jurisdictions. All chapters are written by leading fintech lawyers and industry specialists and we are extremely grateful for their excellent contributions. Special thanks are reserved for the contributing editors Rob Sumroy and Ben Kingsley of Slaughter and May for their invaluable assistance. Global Legal Group hopes that you find this guide practical and interesting. The International Comparative Legal Guide series is also available online at www.iclg.com.

Alan Falach LL.M. Group Consulting Editor Global Legal Group [email protected] Chapter 5 Bermuda Natalie Neto

Walkers Bermuda Rachel Nightingale

1 The Fintech Landscape 2 Funding For Fintech

1.1 Please describe the types of fintech businesses that 2.1 Broadly, what types of funding are available for new are active in your jurisdiction and any notable fintech and growing businesses in your jurisdiction (covering innovation trends of the past year within particular both equity and debt)? sub-sectors (e.g. payments, asset management, peer- to-peer lending or investment, insurance and The Bermuda Government has passed a bill to create the Fintech blockchain applications). Development Fund for the purpose of investing and training Bermudians to build and develop an ecosystem in Bermuda for The Bermuda Government announced its Fintech Strategy in fintech to develop and thrive. The purpose of the fund is to support November 2017 and stated its intention for Bermuda to become a the financial technology education for Bermudians, including leading jurisdiction for fintech, to embrace the development of new supporting community-based initiatives. forms of financial technology, including blockchain and cryptocurrencies, and to establish Bermuda as an innovation hub for In addition, the Bermuda Government also passed amendments to the development and employment of such technology. The Bermuda the Banks and Deposit Companies Act 2000 to create a new class of Government and the sole financial services regulator, the Bermuda licensed bank (with no requirement for a retail presence in Monetary Authority (the “BMA”), have worked together with Bermuda) for banking services to be made available to fintech industry and technology advisers to create a fit-for-purpose legal and businesses in Bermuda. regulatory framework which offers a welcoming environment to In February 2019, it was announced that Signature Bank, a New foster innovation, but also provide adequate protection for investors York-based full-service commercial bank, had agreed to provide a and consumers via regulation. Bermuda operates one of the largest full range of banking services to Bermuda-licensed fintech (re)insurance industries in the world, which is regulated and companies that meet both Bermuda and Signature Bank standards. supervised by the BMA, and has leveraged its experience and expertise in the regulation of this sector (known for its innovation in 2.2 Are there any special incentive schemes for terms of the creation of new risk vehicle and products) to develop a investment in tech/fintech businesses, or in robust, risk-based framework and a supervisory environment that is small/medium-sized businesses more generally, in both conservative and effective, but is not unduly burdensome on your jurisdiction, e.g. tax incentive schemes for those who seek to operate their fintech businesses from within enterprise investment or venture capital investment? Bermuda. Bermuda companies are not currently subject to corporate income tax and Bermuda does not levy personal income tax. Bermuda- 1.2 Are there any types of fintech business that are at present prohibited or restricted in your jurisdiction exempted companies may apply for an assurance from the Minister (for example cryptocurrency-based businesses)? of Finance that, in the event of there being enacted in Bermuda any legislation imposing tax computed on profits or income or There are no such restrictions. Bermuda’s legislation captures all computed on any capital asset, gain or appreciation, or any tax in the forms of fintech businesses provided they are conducting digital nature of estate duty or inheritance tax, the imposition of any tax assets business activities, which also includes cryptocurrency-based will not apply to the company or to any of its operations or to the businesses or offering digital assets to the public. Fintech shares, debentures or other obligations of the company. businesses may operate in or from Bermuda, subject to complying with the legislative and regulatory framework. For further 2.3 In brief, what conditions need to be satisfied for a explanation as to the type of fintech activities that are regulated, business to IPO in your jurisdiction? please see our responses below. A company which is offering shares to the public is required to comply with the provisions of the Companies Act, 1981, as amended (the “Companies Act”) and, unless exempted, must prepare and file a prospectus with the Bermuda Registrar of Companies.

26 WWW.ICLG.COM ICLG TO: FINTECH 2019 © Published and reproduced with kind permission by Global Legal Group Ltd, London © Published andreproduced with kindpermission byGlobal Legal Group Ltd, London ■ ■ by theBMA: from withinBermuda,andrequiresthatsuchactivitiesbelicensed the following‘digitalassetbusinessactivities’ ifcarriedoninor with effect from10September2018inBermuda.DABA regulates The Digital Assets Business Act 2018(“ 3.1 None thatweareawareof. 2.4 Walkers Bermuda ICLG TO: FINTECH2019 to question3.4below. businesses inBermuda. Forfurtherdetails,pleasesee ourresponse M licence,whichisaregulatory sandboxoptionforfintech There isatwotier-licensing regimeunder DABA, includingaClass 3.3 cryptocurrencies andcryptoassets,asdescribedabove. Yes, DABA andtheCompanies Act specifically regulate 3.2 Offering Regulations2018(the“ an offer documentinaccordance withthat Act andtheInitialCoin Minister ofFinancepursuanttotheCompanies Act andmustpublish who isconductingsuchanoffering mustfirstobtaintheconsentof defined above)tothepublicandisnotlimitedICOs. Any person captures theoffering bya person ofanyform‘digitalasset’ (as for theregulationof‘initialcoinofferings’ inBermuda. The legislation Amendment Act 2018on9July2018,tocreateastatutoryframework Companies andLimitedLiabilityCompany(InitialCoinOffering) Amendments werealsomadetotheCompanies Act pursuanttothe gaming platform,areexcludedfromthedefinitionof‘digitalassets’. digital representationofvalueusedbyapublisherwithinanonline or exchangedforfiatcurrency, bankcreditoranydigitalasset),a affinity orrewardsprogramme (providedvaluecannotbetakenfrom technology. Transactions inwhichapersongrantsvalueaspartofan application, productorservicebymeansofdistributedledger utility tokensandanythingintendedtoprovideaccessan representation ofvalue.Itcapturesdigitalcoins,security, equityor and comeswiththerighttouseitincludesadigital The term‘digitalasset’ coversanythingwhichexistsinbinaryform ■ ■ ■ 3 digital assetservicesvendors. provision ofdigitalassetscustodialwalletservices;and type areexchangedforcashorothertypesofdigitalassets; operating anelectronicexchangewherebydigitalassetsofany payment serviceproviderbusinessutilisingdigitalassets; other formofdigitalasset; issuing, sellingorredeemingvirtualcoins,tokensany and thetypeoffintechactivitiesthatareregulated. for fintechbusinessesoperatinginyourjurisdiction, Please brieflydescribetheregulatoryframework(s) Fintech Regulation jurisdiction? IPO) bythefoundersoffintechbusinessesinyour Have therebeenanynotableexits(saleofbusinessor fintechs inyourjurisdiction? Are thereanyregulatory‘sandbox’ optionsfor services markets,andifsohowisthismanifested? technology-driven newentrantstoregulatedfinancial jurisdiction receptivetofintechinnovationand Are financialregulatorsandpolicy-makersinyour directed atcryptocurrenciesorcryptoassets? Is thereanyregulationinyourjurisdictionspecifically

ICO Regulations

DABA ”) becameoperative ”).

restrictions, ifdeemednecessarybytheBMA. are notrestrictedtoaspecifictimeperiod,butmaybesubject once thebusinessmeetsitscriticalsuccessfactors.ClassFlicences licensed undertakingwillbeabletomigrateaClassFlicence supervisory oversightoftheBMA,withintentionthat established, withinacontrolledenvironmentandunderthe will beissuedforadefinedperiodtoenableproofofconcept licence. The ClassMlicencemayhaverestrictionsattachedand full licence;andClassM,whichisamodified‘regulatorysandbox’ There aretwoclassesoflicenceunderDABA:ClassF, whichisa licensed andregulatedbytheBMA. in orfromwithinBermuda(unlessexempted)isrequiredtobe Any personwhowishestocarryonadigitalassetbusinessactivity 3.4 insurtech innovation. The BMA hasalsoestablishedan“InnovationHub”topromote innovative applicationsoftechnologyintheinsurancesector. for thepurposeoffacilitatingandpromotingexperimental with effect fromJuly2018tocreateaninsurtechregulatorysandbox In addition,amendmentswerealsomadetotheInsurance Act 1978 ■ ■ ■ ■ ■ fund managemententities)andincludethefollowingrequirements: (such asinsurance,insurancemanager, investmentbusinessand to thoseappliedinrespectofotherregulatedentitiesBermuda which aresetoutinSchedule1toDABA. These criteriaaresimilar ‘minimum criteria’ havebeensatisfiedwithrespecttotheapplicant, The BMA willnotissuealicenceunlessitissatisfiedthatthe terrorist financingpolicies(“ thereunder, includingcopiesoftheanti-moneylaunderingandanti- (“ requirements ofDABA,theDigital Asset BusinessCodeofPractice policies andprocedureswhichwillbeinplacetocomplywiththe the governanceandriskmanagementframeworkcopiesof things) abusinessplan,twoyears’ financialprojections,detailsof Applications forlicencesmustbeaccompaniedby(amongother DABA CodeofPractice new customersinyourjurisdiction? outside yourjurisdictionovercomeinordertoaccess fintech productsandservices)whichareestablished businesses (orfinancialservicesoffering What, ifany, regulatoryhurdlesmustfintech undertaking; and the nature,size,complexity andriskprofileofthe licensed executive directorsastheBMA considers appropriategiven directors andundertheoversight ofsuchnumbernon- the businessmustbeeffectively directedbyatleasttwo appropriate corporategovernance policies; systems, policiesandprocedures, andimplementationof maintenance ofadequateaccounting records,control the BMA mayapprove; cover inherentrisksorsuchotherriskmitigationmeasuresas the businessmusthaveinplaceappropriateinsuranceto undertaking); account thenature,sizeandcomplexityoflicensed such otheramountastheBMA maydirect,takinginto it maintainslessthanBD$100,000ofminimumnetassets(or deemed nottobeconductingbusinessinaprudentmannerif and internationalsanctionsmeasures),abusinesswillbe DABA, theDABCodeofPractice, AML/ATF requirements into accountanyfailuretocomplywiththeprovisionsof the businessmustbeconductedinaprudentmanner(taking must be‘fitandproper’; the applicantisaccustomedtoacting(shadowdirectors)) persons inaccordancewithwhoseinstructionsordirections controllers (owningorcontrollingmorethan10%)and the ‘controllers’ (managingdirectors,CEOs,shareholder

AML/AT

”) andotherrulespromulgated

F ”).

WWW.ICLG.COM

Bermuda

27 Bermuda 28 Bermuda © Published andreproduced with kindpermission byGlobal Legal Group Ltd, London provided bytheoverseasthirdparty iscomparabletothelevelof If theorganisation isnotsatisfiedthatthelevelofprotection by theoverseasthirdpartyforthat personalinformation. This willincludeanassessmentof thelevelofprotectionprovided for compliancewithPIPA inrelationtothatpersonalinformation. own businesspurposes,theorganisation shallremainresponsible an overseasthirdpartyeitheronbehalfoftheorganisation orforits under PIPA, whereanorganisation transferspersonalinformationto Once PIPA substantivelytakeseffect, subjecttolimitedexceptions or whichrelatetobusinesscarriedoutelectronically. themselves takeplaceelectronicallyorwhichassistotherstodoso, Transactions Act 1999,whosetransactionsorserviceseither identified withBermudaforthepurposesofElectronic transactions orservicesinfromwithinBermuda,whichare carrying onatradeorbusinessconductingcommercial to intermediariesande-commerceserviceproviderswhoare The StandardforElectronic Transactions (“ of personalinformationtoanoverseasthirdparty. information bytheoverseasthirdpartybeforemakinganytransfer the levelofprotectionprovidedinrelationtopersonal international transfersofdatabyrequiringanorganisation toassess wholly orpartlybymanualelectronicmeans.PIPA restricts the eventthattheyusepersonalinformationinBermudaeither PIPA mayapplytoorganisations establishedoutsideofBermudain 4.2 comply withPIPA. degree ofpersonalinformation,fintechbusinesseswillberequiredto electronic means.Sincefintechbusinessestypicallyuseasignificant information inBermudaeitherwhollyorpartlybymanual PIPA generallyappliestoeveryorganisation thatusespersonal is notyetinforceasatFebruary2019. law wasexpectedtobecomefullyeffective byDecember2018,but 2016 toenabletheappointmentofPrivacyCommissioner; The initialoperativeprovisionsofPIPA cameintoforceinDecember principal Bermudastatuteregardingtheregulationofpersonaldata. Yes, thePersonalInformationProtection Act 2016(“ 4.1 takes placeinBermuda. the strategicdecision-makingconcerningriskandpolicydecisions including thepresenceofseniorexecutivesinBermudaandwhether determining iftheheadoffice requirementhasbeensatisfied, and theBMA willtakeanumberoffactorsintoaccountwhen in Bermudafromwhichthebusinesswillbedirectedandmanaged, A DABA licensedundertakingisrequiredtomaintainaheadoffice ■ Walkers Bermuda WWW.ICLG.COM 4 Non-Financial Regulation Other RegulatoryRegimes/ supervision. will notobstructtheconductofeffective consolidated of anygrouptowhichitmaybelongshouldbesuchthat the positionoflicensedundertakingwithinstructure privacy lawsrestrictinternationaltransfersofdata? established outsideofyourjurisdiction?Dodata Do yourdataprivacylawsapplytoorganisations in yourjurisdiction? how doesthisapplytofintechbusinessesoperating yes, whatisthelegalbasisforsuchregulationand collection/use/transmission ofpersonaldata,andif Does yourjurisdictionregulatethe

Standard

”) onlyapplies PIPA

”) isthe

guilty ofanoffence andmay beliableonsummaryconvictiontoa within aperiodasmaybespecifiedinthedirection,personis or otherwisetocorrectitspractices,and,ifthatpersonfailsdoso commerce. The Ministermay directthatpersontoceaseanddesist written warningbytheMinisterresponsibleforeconomic comply withtheStandardmustinfirstinstancebegivena An intermediaryore-commerceserviceproviderwhofailsto BD$50,000, orboth. summary convictionandimprisonmentforsixmonthsorafineof controller. FailuretocomplywiththeStandardmayresultin in respectofanypersonaldatathatiscollectedbythe A datacontrollerorprocessormustcomplywiththeStandard ■ ■ its provisions: PIPA incorporatesthefollowingsanctionsfornon-compliancewith 4.3 third partyprovidesacomparablelevelofprotection. binding corporaterules,orothermeanstoensurethattheoverseas contractual mechanisms,corporatecodesofconductincluding protection requiredbyPIPA, theorganisation shallemploy in theICORegulations. money launderingandanti-terrorist financingrequirementssetout verify theidentityofparticipants intheoffering, andother anti- from withinBermudatohavein placeappropriatemeasuresto require anypersonthatisconducting an‘initialcoinoffering’ inor The Companies Act andtheInitialCoinOffering Regulations as conductongoingmonitoringandreportanysuspiciousactivity. adequate duediligenceandverifytheidentityofitsclients,aswell undertakings shouldapplyarisk-basedapproachandobtain businesses withrespecttothe AML/ATF Laws.Licensed The BMA hasalsoissuedsector-specific guidancefordigitalasset (“ laundering andanti-terroristfinancinglawsregulations financial institution’ for thepurposeofBermuda’s anti-money An undertakingwhichislicensedunderDABA isa‘regulated 4.5 Rules 2018. a requirementaspartoftheDigital Asset Business(Cybersecurity) also beconductedonanannualbasis.Suchcybersecuritypolicyis annually. An externalauditofitscybersecurityprogrammemust to haveawrittencybersecuritypolicywhichisreviewedatleast the nature,scaleandcomplexityofitsbusinesswillbeexpected a comprehensivecybersecurityprogrammethatiscommensurateto Yes, anyentitythatislicensedunderDABA mustalsodemonstrate 4.4 continues. fine ofBD$5,000foreachdayonwhichthecontravention AML/ATF Laws individuals, afinenotexceedingBD$250,000. For convictionsonindictmentofpersonsotherthan BD$25,000, imprisonmentnotexceedingtwoyears,orboth. For summaryconvictionsofindividuals,afinenotexceeding failing tocomplywithyourdataprivacylaws. Please brieflydescribethesanctionsthatapplyfor your jurisdiction. requirements thatmayapplytofintechbusinessesin Please describeany AML andotherfinancialcrime operating inyourjurisdiction? regulations thatmayapplytofintechbusinesses Does yourjurisdictionhavecybersecuritylawsor

”) andmustcomplyinallrespectswiththem.

ICLG TO: FINTECH2019

Bermuda

© Published andreproduced with kindpermission byGlobal Legal Group Ltd, London Act Bermuda issetoutintheEmployment Act 2000(the“ The legalframeworkforhiringanddismissingemployeesin 5.1 staff, itmayrequirealicenceundertheInvestmentBusiness Act 2003. business activitiesfrompremisesinBermuda,atwhichitemploys (see furtherabove).Ifafintechbusinessisconductinginvestment company, itwouldberequiredtocomplywiththeInsurance Act 1978 To theextentthatafintechbusinessisoperatingasaninsurance 4.6 Walkers Bermuda ICLG TO: FINTECH2019 used foranyjob category providedthattheposition isnotanentry for asix-monthperiodfollowingincorporation. The permits can be company toreceiveautomaticapproval foruptofiveworkpermits Business Work Permit allows anynewlyincorporatedfintech permit calledthe‘FintechBusiness Work Permit’. A Fintech Bermuda, theBermudaGovernment hascreatedanewclasswork bring specialiststaff fromoverseasinordertoestablishabusiness in In recognitionofthefactthatmanyfintechbusinessesmayneedto Please refertotheresponsequestion5.1above. 5.3 Bermudian employeesandemployedspousesofBermudians. addition, employersmustalsoprovideapensionplanforits for theiremployeeandeachemployee’s uninsureddependant.In Every employerinBermudamustprovideahealthinsuranceplan 5.2 the operationalrequirementsofemployer’s business. reason beingconnectedtotheperformance,ability, conductand/or employee maynotbedismissedwithoutavalidreason–such Act and/oranyunfairdismissalclaim.UnderBermudalaw, any three-month periodoftheemployer’s breachundertheEmployment government’s Departmentof Workforce Developmentwithina Any employeehiredhastherighttobringacomplaint apply fortheposition. period oftimeintheeventthatnosuitablyqualifiedBermudians workers mayonlybeemployedonaworkpermitforlimited in Bermudaandalsoonlocaljobadvertisementboards,guest employment positionmustbeadvertisedfirstintheRoyalGazette opportunities inBermuda.Subjecttolimitedexceptions,any have precedenceovernon-Bermudianswithrespecttoemployment was createdtoensurethatsuitablyqualifiedBermudianswould Bermuda ImmigrationandProtection Act 1956(asamended),which Employers mustalsoobservetherequirementssetoutunder 5 ”).

businesses? restrictions thatarefrequentlyencounteredby Are thereanyparticularlyonerousrequirementsor the hiringanddismissalofstaffinyourjurisdiction? In broadterms,whatisthelegalframeworkaround Accessing Talent to fintechbusinessesoperatinginyourjurisdiction? Are thereanyotherregulatoryregimesthatmayapply for fintechbusinesses? obtaining permissionforindividualswhowishtowork your jurisdiction?Isthereaspecialroutefor bring employeesfromoutsideyourjurisdictioninto What, ifany, hurdlesmustbusinessesovercometo provided tostaff? What, ifany, mandatoryemploymentbenefits mustbe

Employment

situations, anunregisteredtrademarkmayalsobeprotectedunder exclusive rightstouseandlicensethetrademark.Incertain thereafter. A registeredtrademarkwillprovidetheproprietorwith lasts forsevenyearsandisrenewablesuccessive14-yearperiods based ontheUK Trade Marks Act 1938. The initialregistration Trademarks areregisterableunderthe Trade Mark Act, whichis 6.2 registration ofintellectualproperty. General inBermudaistheresponsiblegovernmentdepartmentfor Patent andDesigns Act 1930(the“ the CopyrightandDesigns Act 2004(the“ Bermuda underthe Trade Mark Act 1974(the“ Innovations, inventionsandintellectualpropertyareprotectedin 6.1 be grantedforbetweenonetofiveyears. be advertisedassetoutabove.FintechBusiness Work Permitscan level, graduateortraineepositionandthewillnotneedto Rights. Accordingly, inorder toprotectandenforceintellectual the Agreement on Trade-Related Aspects ofIntellectualProperty Literary and Artistic Works; UniversalCopyrightConvention;or Cooperation Treaty; BerneConventionfortheProtection of Convention fortheProtectionof IndustrialProperty;thePatent Bermuda isnotasignatorytothe followingtreaties:theParis 6.3 maximum of15years. copyright subsistinginadesignprotectioncanlastfor Designs canalsobeprotectedundertheCopyright Act, wherea patent processsetoutabovetoextendtheregistrationBermuda. registration ofaUKdesignmaybesubjecttotheconfirmatory Designs mayalsoberegisteredunderthePatents Act andany years oftheoriginalgrant. designating theUKcanbereregisteredinBermudawithinthree securing patentprotectioninBermuda,asaUKorEuropean confirmatory patentprocess,whichisaconvenientmeansof relevant Minister’s discretion. The Patent Act providesfora 16 yearsandmaybeextendedforperiodsofuptosevenatthe for search,examinationandconfirmation. A patentiseffective for General inBermuda,andtheapplicationwillthenbesenttoUK register apatentanapplicationmustbesubmittedtotheRegistry The Patent Act providespatentprotectioninBermuda.Inorderto created andregistrationisnotarequirement. copyright protectionisdeemedeffective fromthetimeworkis must meettherequirementssetoutunderCopyright Act. The afforded protectionunderthe Copyright Act, eachpotentialcopyright broadcasts, typographicalarrangementsanddatabases.Inordertobe literary, dramatic,musicalandartisticworks,soundrecordings,films, Act 1988andappliestothecopyrightswhichsubsistinoriginal The Copyright Act isbasedontheUKCopyright,DesignsandPatents the commonlawtortiousremedyofpassingoff. 6 in yourjurisdiction. Please brieflydescribehowownershipofIP operates inventions areprotectedinyourjurisdiction. Please brieflydescribehowinnovationsand Technology do anytreatiesormulti-jurisdictionalrightsapply)? or areyouabletoenforceotherrights(forexample, jurisdiction, doyouneedtoownlocal/nationalrights In ordertoprotectorenforceIP rightsinyour

Patent Act

Copyright Act WWW.ICLG.COM

Trade Mark Act

”). The Registry Bermuda

”) andthe

”),

29 Bermuda Walkers Bermuda Bermuda

rights in Bermuda, the proprietor will need to have local and/or Bermuda, along with other Overseas Territories and Crown national rights over the intellectual property and register these in Dependencies, is committed to putting in place legislation which accordance with the processes set out above. would address the EU’s concerns over harmful tax practices with respect to Bermuda entities carrying on ‘relevant activities’, including intellectual property related activities. With effect from 1 January 6.4 How do you exploit/monetise IP in your jurisdiction and are there any particular rules or restrictions 2019, any company, limited liability company, exempted partnership regarding such exploitation/monetisation? or exempted limited partnership will be required to observe economic substance requirements and, in the case of intellectual property- Intellectual property in Bermuda may be monetised in a number of related activities, may be required to file additional information with ways, including utilising a Bermuda exempted entity to hold, sell the Registrar of Companies depending on the manner in which such Bermuda and license intellectual property rights from Bermuda. intellectual property activities are being conducted.

Natalie Neto Rachel Nightingale Walkers Bermuda Walkers Bermuda Park Place, 55 Par-la-Ville Park Place, 55 Par-la-Ville Hamilton HM 11 Hamilton HM 11 Bermuda Bermuda

Tel: +1 441 242 1533 Tel: +1 441 242 1520 Email: [email protected] Email: [email protected] URL: www.walkersglobal.com URL: www.walkersglobal.com

Natalie Neto is a partner in the corporate and finance practice at Rachel Nightingale is based in the Walkers Bermuda* office and is an Walkers Bermuda*. associate and member of the corporate, finance and funds practice at Walkers Bermuda. Rachel specialises in advising on corporate, Natalie advises on a wide range of Bermuda-based and international regulatory, compliance and finance matters. corporate and regulatory matters with significant transactional experience advising on M&A transactions for public and private Rachel has particular expertise advising on international M&A companies, including takeovers, tender offers and squeeze outs, transactions, public listings, Bermuda law regulatory and compliance amalgamations, mergers, and schemes of arrangement. matters and Fintech businesses in connection with the digital asset framework in Bermuda. Natalie also advises on private equity investments, debt and equity capital markets transactions, banking and finance matters and has a Rachel regularly advises licensed insurance and reinsurance entities, wide depth of knowledge with respect to complex restructuring financial institutions, investment managers, advisors and brokers as projects involving Bermuda companies, LLCs and partnerships, well as start-up Fintech venture companies. including redomiciliations. Natalie also advises companies and directors in respect of corporate governance and regulatory matters, including directors’ fiduciary duties and responsibilities. Natalie advises Fintech clients and investors with respect to Bermuda’s evolving ICO legislation and blockchain and digital asset framework, including the establishment, licensing and ongoing compliance obligations of digital asset businesses.

With staff drawn from top international law firms, Walkers Bermuda* provides first-class, commercially-focused advice that is attuned to our clients’ requirements and facilitates their business. Clients include global corporations, financial institutions, capital markets participants, investment fund managers and high-net-worth individuals located throughout the world, but with a primary focus in the Americas. Walkers Bermuda is a full-service commercial law office. Core practice areas are: ■ Corporate & Private Equity. ■ Finance. ■ Investment Funds. ■ Insolvency & Dispute Resolution. ■ Insurance. ■ Compliance & Regulatory. *Walkers works in exclusive association with Kevin Taylor, trading as ‘Walkers Bermuda’, a full-service commercial law firm providing advice on all aspects of Bermuda law. The title of ‘partner’ is used to refer to a consultant or employee of Walkers Bermuda with equivalent standing and qualifications to a partner of Walkers.

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