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.