Special report – Legal assistance: prevention or remedy?

Legal issues are often low on a start-up’s priority list. Then come the bad surprises

Macau Business | June 2022 | Special report | Start-up in Macau


“It is not uncommon to see some entrepreneurs looking for lawyers to solve their problems instead of seeking legal assistance to prevent them. It should be noted that choosing to leave annoying and uncomfortable questions and situations for later will cost them more and be more painful,” said local attorney Calvin Chui. Macau Business.

Another local legal professional with experience in this area, Emanuel Soares, agrees: “Even the youngest founders are usually aware that they are creating valuable intellectual property or that they have to put things in writing. in contracts. The main challenge, however, is that dealing with the legal aspect of the business is not a priority in their minds at this stage.

“They mainly focus on the development of the idea or the product. So a legal issue will usually be dealt with just by using a template document found online or just ignoring it for the time being,” Soares adds. “So with just a little help and guidance, many basic legal risks can be addressed and mitigated appropriately.”

Mr. Chui agrees: “In my experience, many start-ups naturally focus more on their business. At the beginning, the essential legal issues – such as the registration of patents and trademarks, the type of contracts (contracts of employment, services) suitable for the company, the definition of a correct and adequate company format, tax issues adjacent to the execution of the activity – most often receive less attention.

“In the beginning, essential legal issues – such as patent and trademark registration, types of contracts (employment, service contracts) – most often receive less attention” – Calvin Chui

Emanuel Soares of MdME Lawyers adds that “most of the problems stem from the fact that for many Macau start-up founders this is their first time running a business. It is therefore normal that there are many questions about how to manage the legal aspects of operating a business. A particularly sensitive issue for start-ups is how to manage the relationships between the founders themselves and how these should be structured and documented from a legal point of view.

“The other major source of legal problems,” Soares continues, “usually arises during the initial fundraising phase, when founders are first dealing with potential investors. These investors are generally more business savvy. than the founders, and there will be different types of legal agreements, obligations and covenants to consider that the founders will not be very familiar with.

“As a general rule, a legal issue will be dealt with simply by using a template document found online or simply ignoring it for the time being” – Emanuel Soares

The problems tend to get worse – and it keeps getting worse – when young entrepreneurs decide to leave Macau and move to mainland cities where there are different legal systems.

“For sure!” Calvin Chui of Lektou Law Office responds. “That is why it is extremely important to have legal assistance in both jurisdictions, even in several different cities. It is a privilege to be part of our firm, which is equipped with an extensive global network of offices, including our JV offices in Hengqin and Shenzhen. This allows us to closely follow companies as they expand across borders.

Emanuel Soares believes that “the mainland is an obvious target for Macau start-ups when it comes to expansion and fundraising. However, it operates in a completely different environment, both in terms of the legal framework and the way of doing things from a business perspective. It is undoubtedly a challenge for young entrepreneurs to tackle such a huge potential market, but also a great opportunity. As it gradually becomes easier for Macau start-ups to grow and settle in the new deep cooperation zone, Hengqin in particular will be an attractive choice for Macau entrepreneurs who want to establish their presence in the mainland and put a foot in the door. with the Chinese market.


“It’s a huge advantage to have the relevant experience”

Is there a qualified lawyer to help a start-up, or does the subject require an expert?

“From a certain point of view, any lawyer will be as able to help a start-up company dealing with Macau’s legal problems as he is able to help any other company operating in Macau. Macau does not have a particularly developed innovation ecosystem or specific legislation to deal with it, so in this respect I would not say that there are really start-up “experts” in Macau”, answers Emanuel Soares (MdME).

However, he adds, “it should be noted that the global start-up environment is highly interconnected and most of the available information that founders will have access to online comes from other jurisdictions. certain areas of law, for example the fundraising process, which adhere to fairly similar standard practices around the world. In this respect, it is a huge advantage to have the relevant experience in this area of ​​practice to better understand what founders want and need and to be able to work with this international standard practice and provide practical solutions that are also suitable for our own legal system.”

Calvin Chui (Lektou) stresses that the start-up ecosystem is “multidisciplinary”, so that the lawyers involved in supporting start-ups “will not rely on professional legal qualifications but will have a profile multidisciplinary, with proven experience. in the fields concerned by such an ecosystem and speaking the same language as start-ups.

“As a legal professional and part of one of Macau’s most renowned law firms, with its diverse team of skilled professionals with strong academic backgrounds, where senior experience merges with energy juniors in complete synergy, I can say that we are honored and able to provide a wide range of legal services in several areas, such as the legal feasibility of a company, companies and finance, asset protection, confidentiality , cybersecurity, taxation, labor and employment, intellectual property, etc.,” says Chui.

Mr. Soares details how in 2018, as part of the firm’s social responsibility program, MdME started cooperating with the Macau Young Entrepreneur Incubation Center: “In this context, I provided pro bono mentoring and advice to its members on legal matters. I work primarily with early stage startups, so most of the legal issues I advise on are day-to-day legal matters such as assisting with reviewing a contract or advising on matters such as compliance or regulatory issues. ‘company.

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