Finder's Fee Agreement For Raising Capital Template for Hong Kong

A Finder's Fee Agreement For Raising Capital is a crucial legal document that establishes the terms under which an intermediary will introduce potential investors to your company in exchange for compensation. In Hong Kong's highly regulated financial sector, this agreement serves as both a commercial contract and a compliance tool, ensuring that capital raising activities conform to local securities laws while protecting your business interests.

When do you need this document?

You need this agreement whenever you engage third parties to help identify and introduce potential investors for your capital raising efforts. This includes situations where investment advisors, business consultants, or professional networks offer to connect you with angel investors, venture capital funds, or institutional investors. The document is particularly important for startups seeking seed funding, growing companies pursuing Series A or B rounds, and established businesses planning expansion capital raises. You should have this agreement in place before any introductions begin to ensure clear expectations and legal protection.

Key legal considerations

The agreement must carefully define the scope of the finder's services to avoid crossing into regulated activities under the Securities and Futures Ordinance. Key provisions include specific definitions of "successful introduction" and "qualified investor" to prevent disputes over fee entitlements. The document should establish clear payment terms, typically structured as a percentage of successfully raised capital, with detailed conditions for when fees become payable. Confidentiality clauses are essential to protect sensitive business information shared during the introduction process. The agreement must also include appropriate indemnification provisions and specify the finder's obligations regarding investor due diligence and regulatory compliance.

Legal requirements in Hong Kong

Under Hong Kong law, finder's fee agreements must comply with the Securities and Futures Ordinance, particularly regarding Type 1 and Type 6 regulated activities. The agreement must ensure that finders do not engage in securities dealing or corporate finance advisory services without proper licensing from the Securities and Futures Commission. Contract formation requirements under the Contract Ordinance must be satisfied, including valid consideration and clear terms. The Anti-Money Laundering and Counter-Terrorist Financing Ordinance may require due diligence provisions for substantial transactions. Additionally, any exemption clauses must comply with the Control of Exemption Clauses Ordinance to ensure fairness and enforceability. The document should specify Hong Kong jurisdiction and governing law to ensure local court enforcement.