Notarisation, geographical tax & legal nuances
Certain countries (many in Europe) require any legal paperwork concerning a purchase of shares to be wet-signed and certified by a notary public. They also typically require foreign investors to send certified and apostilled copies of paperwork for the SPV, as well as a power of attorney so that someone can sign on behalf of the SPV in-person in the relevant country. The process is fairly similar across countries but there are often some geographical nuances.
Note that instruments like convertible notes and SAFEs will often not require notary attendance at the time of the initial investment, but there will be notary costs when the instrument converts and shares are issued.
Notarisation is required in the following countries (non-exhaustive list):
- Germany;
- The Netherlands;
- Spain;
- Austria;
- Luxembourg (in some cases);
- Poland (in some cases), and;
- Some cantons of Switzerland.
Paperwork, as normal, has to be drafted by the lawyers of the investee company. Odin will typically have been notified of the requirement for notarisation at the creation of the deal, given we ask the investee company to tell us as part of completing their onboarding.
The investee company will have to inform Odin of the specific date that their notary appointment is set for, ideally as far in advance as possible so our team can make the necessary preparations.
A ‘Power of Attorney’ (PoA) document is usually provided by the company for the in-person wet-signing event. Usually, the PoA itself also needs to be wet-signed in-person by a director or authorised signatory of the investing entity, and apostilled, but it depends on the country and the type of company (for example, German companies with the suffix ‘AG’ don’t require a wet signature, but GmbH companies do).
The notary may additionally need apostilled evidence that someone is the legal signatory of the nominee entity we are administering the investment through. To provide this, Odin would need to send an apostilled copy of company incorporation documents to the lawyers.
There can be other nuances, eg, in Spain local tax numbers (NIF) and other paperwork are required for the legal entity that is investing.
Optional suggestion for Power of Attorney
To streamline future processes, we suggest that for all first-close deals requiring notarisation, you consider optionally signing a deal-specific Power of Attorney (PoA) in perpetuity, rather than just for that specific deal close. Odin will not draft this document but is happy to sign any reasonable version provided. However, this should include the caveat that for any exits or transfers of shares, the PoA holder will be required to obtain full investor consent beforehand.
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Nuances in Germany
Typically German companies require certified and apostilled copies of the following:
- Power of Attorney so that someone in Germany can sign investment docs on behalf of your SPV;
- Certificates for the SPV entity’s incorporation, and;
- Proof of representation for the entity by the person signing the power of attorney.
These documents are typically scanned and shared with the investee company and their lawyers ahead of the notary appointment in Germany. Once the German lawyers confirm all documents are in good order, they are forwarded to the Apostille Office in London to be given a UK government seal, and then sent on by courier to the address designated by the investee company’s lawyers.
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Nuances in Spain
Any entity buying equity in Spanish companies needs a local tax identification number called a NIF. Odin has already obtained an NIF for this purpose, corresponding to ‘Odin Investments Limited’.
Additional paperwork is required, and a power of attorney (not notarised) must be signed so that a local signatory can take care of paperwork in Spain.
Please note that Odin cannot obtain a NIF for any branded entities. Any deals conducted for investee companies in Spain will have to be done under Odin Investments Limited.