Why the Right Investment Structure Is Essential: Jurisdictions & Deal Types

Modern businesses can’t grow without external capital. But it’s not enough to find funding – you need to structure it correctly. Choosing the right jurisdiction and agreement type is about more than convenience; it’s about legal safety and investor trust.

In 2025, investors expect transparent structures and clear legal instruments. Without a well-defined capital-raising model, you risk losing funding at the negotiation stage.

1) Investment Agreements – a Legal Must and a Market Standard

For early-stage rounds, three core instruments are commonly used:

Convertible Loan Agreement (CLA) – a loan that later converts into equity or tokens.
SAFT (Simple Agreement for Future Tokens) – the investor funds the project now in exchange for the right to receive tokens after issuance.
Subscription Agreement – the investor immediately becomes a shareholder by contributing capital.

These instruments work differently across jurisdictions:

United Kingdom: CLA is the venture-market standard, well understood by investors globally.
Latvia & Estonia: CLA and SAFT rely on freedom-of-contract principles, but come with tax nuances.
EU generally: SAFTs can fall under the Prospectus Regulation, though exemptions apply for smaller raises (< €1m).

2) Investor Trust: Transparency = Willingness to Invest

Investors assess:

how clear the financing structure is;
the risk of regulatory issues;
how well their rights are protected.

A clear, transparent investment agreement signals that the company treats capital responsibly and cares about its partners. This is especially critical for FinTech and Web3 startups, where investors expect not only product potential but also a robust legal framework.

3) Business Benefit & Legal Safety

A well-drafted agreement in the right jurisdiction:

reduces the risk of investor and regulator claims;
eases future fundraising rounds;
strengthens your market reputation.

Mistakes are costly. The wrong jurisdiction or agreement can lead to tax leakage, blocked transactions, or even criminal exposure if regulatory rules are breached (e.g., token offerings in the UK).

4) What Your Investment Strategy Must Cover

Jurisdiction: UK, Latvia, or Estonia? Each has distinct rules for loans, tokens, and shares.
Agreement type: CLA, SAFT, or Subscription Agreement? Choose based on stage and roadmap.
Tax outcomes: Can you deduct interest? Could payments be reclassified as hidden profit distribution?
Regulatory risk: Do you trigger the Prospectus Regulation or licensing requirements?
Flexibility: Does the structure leave room for future rounds and new investors?

How We Help

The Manimama Law Firm team:

analyzes your business model and proposes the optimal jurisdiction;
drafts investment agreements (CLA, SAFT, Subscription Agreement, SHA);
structures deals to be investor-friendly and legally compliant;
factors in tax effects and compliance rules (MiFID II, Prospectus Regulation, AML).

We don’t just “get you money” – we help you raise it the right way so it fuels growth instead of creating legal problems.

Why Us?

Manimama Law Firm has hands-on experience with venture deals in the UK, EU, Ukraine, and the US. We help companies combine traditional financing instruments with tokenization models, building clear and safe investment structures.

We work with startups raising their first hundreds of thousands of euros and with companies going global with multi-million rounds.

Want to structure your raise transparently and advantageously?

Write to us—and we’ll prepare a solution aligned with your goals and investor expectations.