Austria Yes. In most cases a local sub-plan will be recommended.

China Currently stock options granted outside mainland China to mainland Chinese staff located within China, face various legal obstacles, in particular regarding all cross-border elements of such transactions. Solutions include contractual arrangements solely within China to mirror the economic result, or to find an arrangement which is completely outside mainland China (in particular no cross-border money transfers).

Czech Republic Yes. No local sub-plan is required.

England & Wales Yes, and in most cases a local sub-plan is required.

France Yes. A French sub-plan is required to benefit from the preferential tax and social security regime.

Germany Yes. No local sub-plan is required but can be helpful, especially when headcount of German employees has reached a significant number.

Hong Kong Yes, but it is subject to the relevant requirements under the Companies Ordinance (Cap 622) and in the case of a listed company, the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited. A local sub-plan is not a must.

Hungary Even if there is a US plan, only the Hungarian entity has the right to make lawful decisions regarding stock options towards its employees. Further, for the Hungarian entity being able to offer stock options relating to US entities, a separate agreement between the Hungarian and the US entity will be necessary.

Ireland Yes. Although not a legal requirement, in most cases, it is advisable to adopt a local sub-plan.

Italy Yes, it is possible to grant stock options to Italian employees under the overseas parent’s company option plan.

Even if a sub-plan is not mandatorily required, it could be advisable to prepare a local sub-plan (or at least carry out a review for compliance of the parent’s company option plan), so to double-check the conformity of the latter with Italian mandatory provisions (eg, tax or employment laws and regulations).

Netherlands No, a local sub-plan is not required.

Poland Yes, as a rule a local sub-plan is not required.

Singapore Yes, depending on whether the overseas parent company’s plan caters to grants to employees in Singapore.

The decision to adopt share option schemes is commercially driven. Share option schemes may be a strategic way to align the interests of owners and employees, and to minimise operational expenditure on salaries. However, private companies incorporated in Singapore have to note the 50-member restriction on private companies when structuring their share option schemes.

Slovakia Yes, a local sub-plan is not required.

Ukraine Yes, it is possible for a foreign company to grant stock or other option plans. Depending on how the option plan is used, different tax obligations may arise. Usually, a tax is paid upon the sale of the received asset under the option plan.
A local sub-plan is not required, though taxes may be added depending on the nature of the transaction and asset to be acquired.
Ukraine's Tax Code does not include possibility of entering into stock option contract as part of payment for labour/services of an engaged person. This does not, however, mean that stock option is out of the scope of the tax legislation. Stock option contracts are subject to mandatory tax reporting under Ukrainian law.

United Arab Emirates The UAE Companies Law provides for employee share option schemes that may be implemented by UAE registered companies. However, this is largely untested since its introduction pursuant to the revised companies law in 2015. In addition, the resolution that, in accordance with the UAE Companies Law, was to be passed by the Emirates Securities and Commodities Authority on the “mechanism and conditions of implementation” of ESOPs has never been issued and published.

There is no specific law in the UAE that prohibits granting additional benefits to employees in other jurisdictions, so long as the benefits under UAE Employment Law are honoured. At this stage there is also no requirement for a sub-plan when ESOPs are offered to UAE based employees by overseas located group companies of the respective employees’ employer.
There is no specific law in the UAE that prohibits granting additional benefits to employees in other jurisdictions, so long as the benefits under UAE Employment Law are honoured. At this stage there is also no requirement for a sub-plan when ESOPs are offered to UAE based employees by overseas located group companies of the respective employees’ employer.

Austria No. If at all, stock options are granted by Austrian stock companies (Aktiengesellschaft). Due to legal restrictions: The GmbH (except for certain exceptional cases) cannot own shares. The exercise of stock options would require a capital increase in the GmbH, if such stock options are not granted by the current shareholders of the GmbH.

The acquisition of shares in an GmbH requires an Austrian notarial deed (Notariatsakt).

China More common for tech firms and start-ups considering an IPO as the ultimate goal.

Czech Republic No, but becoming increasingly common with US/UK-parent companies.

England & Wales Yes, especially within the technology and life sciences sectors.

France Share option schemes are common among listed companies and subsidiaries of
multinational companies.

Germany Common within companies with a US-parent company, but not significantly used by German headquartered companies since the burst of the dotcom bubble. Other incentives such as bonuses, phantom shares or participation certificates are common.

Hong Kong Share option schemes are common among listed companies and private subsidiaries of multinational companies or some start-ups.

Hungary Strictly speaking no, however stock options are slowly becoming increasingly common in Hungary, usually at local subsidiaries of international companies who extend their global plans to Hungary.

Ireland Yes, especially within the technology and life sciences sectors.

Italy No, even if it is becoming increasingly common, in particular with regards to start-ups.

Netherlands It is becoming increasingly common, in particular with start-ups and US/UK headquartered technology and life sciences companies.

Poland No, but it is often offered to employees within new tech companies with US or Canadian parent company.

Singapore Information unavailable or not applicable

Slovakia No, but it has been increasingly used by VC-backed start-up companies.

Ukraine It is acceptable but not required, though more and more highly experienced professionals in IT industry, including non-technical managers, expect to be proposed an option plan for their loyalty, while the salary is expected to remain competitive. Please, however, note that depending on the conditions of employment, a change in tax residency is possible, and sometimes neither the employer nor the employee considers this, especially when an option plan is involved.

United Arab Emirates No, on the contrary we have seen very few clients offering ESOPs to UAE based employees.

Austria Under certain circumstances a tax allowance (Freibetrag) of up to EUR 3,000 per year may apply.

China Normally not, due to the above described limitations and alternative structures sought.

Czech Republic In principle, no.
To reduce the economic impacts of the pandemic, under new legislation effective from 2021, employees are entitled to higher personal income tax deductions.

England & Wales Yes for certain types of options. For example, shares acquired on exercise of an EMI option can have a capital gains tax rate as low as 10% to the option holder on sale.

France The acquisition gain is treated as an employment income. However, there is a tax benefit for the employer given that such gain will benefit from an exemption of social charges under certain conditions.

Germany No, there is no special tax benefit to employees. In very limited cases an annual tax allowance of EUR 360 applies. The granting of stock options will generally be taxed upon exercise of the stock options.

Hong Kong No, but salaries tax is payable by employees on the benefits associated with any stock-based awards arising from their office or employment in the form of share awards and share options.

Hungary Income from stock options must be classified based on the relationship between the provider of the income and the recipient. Since the recipients would have an employment relationship with the Hungarian subsidiary, the income would be treated as employment income even if the options were provided by their non-Hungarian mother company.

However, limited companies may issue employee shares and provide them to full-time and part-time employees free of charge or at a reduced price, below the share’s nominal value.

Ireland Generally no, because any gain made by an employee or director upon the exercise of a share option is subject to income tax, universal social charge (USC) and pay-related social insurance (PRSI) (at a combined marginal rate of up to 52%). However, one exception is the Key Employee Engagement Programme (KEEP) scheme, which was introduced to support SMEs through advantageous tax treatment for certain qualifying share options.

Italy The acquisition gain is treated as an employment income. However, there is a tax benefit for the employer given that such gain will benefit from an exemption of social contribution charges under certain conditions.

Netherlands In principle, no.

Poland If a plan is deemed qualified for Polish tax purposes, then employees will not be taxed at acquisition of securities through executing options. Instead, an employee will be taxed at 19% PIT on profit gained on the sale of such securities.

Non-qualified option is in general taxable at its execution.

Singapore Employees who are granted share options by their employers will be taxed on any gains or profits arising from the exercise of the share options.

Slovakia In principle, no.

Ukraine No.

United Arab Emirates No, at least not from a UAE law perspective. There are no personal income taxes in the UAE. The situation might be different for non UAE national employees, who are subject to taxation in their home jurisdiction.