Employee stock options (ESOP)
grant employees the right to buy shares at a fixed price after vesting — the standard startup retention tool. Internationally they turn complex: taxing points differ (grant, vest or exercise), mobile employees’ gains apportion across countries, and payroll withholding duties attach in many states.
What global equity programmes must handle
- Taxing point per country: exercise-taxed (UK unapproved, Switzerland generally), vest-taxed variants, and favoured schemes (UK EMI, France BSPCE) with conditions.
- Mobility sourcing: gains apportion by workdays over vesting — assignees create multi-country reporting; see shadow payroll.
- Payroll duties: withholding and social charges on equity income run through payroll in many states — missed equity events are audit classics.
- Securities and data rules: offering documents and filings per country for larger grants.
FAQ
How are options taxed for EOR employees?
The client’s equity, the EOR’s payroll: grants come from the client company, while taxable events may need reporting or withholding through the EOR’s payroll depending on the country. Coordinate before granting — retrofitting equity events into EOR payroll after exercise is painful.
Are there tax-favoured option schemes?
Several markets run them with conditions: the UK’s EMI for qualifying companies, France’s BSPCE, and startup-friendly regimes elsewhere reduce or defer tax. Eligibility rules (company size, employee scope) are strict — structure per country rather than exporting one plan design.