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

Brazil Yes. A local sub-plan is not required.

China Currently stock options granted outside mainland China to mainland Chinese staff located within China face various legal obstacles, in particular those 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. To benefit from the French preferential tax and social security regime, a French sub-plan is required in order to supersede those of the parent company option plan’s provisions which are not compliant with the French Commercial Code.

Germany Yes. No local sub-plan is required but is helpful, especially when headcount of German employees has reached five or more employees. If the company employs less than five employees in Germany, for pragmatic reasons a sub-plan is not a must (although legally still advisable).

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 (e.g., tax or employment laws and regulations).

Netherlands You can grant stock options / RSUs under the overseas parent's company's option plan to employees, even employees of a subsidiary, in the Netherlands. A local sub-plan is not required.

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

Portugal Yes, but together with local sub-plan.

Singapore Yes, depending on whether the overseas parent company’s plan caters to grants to employees in Singapore and subject to compliance with Singapore securities offering laws.

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.

Spain There is no rule preventing employers to provide employees with a remuneration system under a parent company’s option plan. However, in most cases, such plans must be adapted to be enforceable under Spanish law.

United Arab Emirates The UAE Commercial Companies Law provides for employee share option schemes that may be implemented by UAE registered companies. However, this is largely untested since its introduction. In addition, the resolution that, in accordance with the UAE Commercial Companies Law, is to be passed by the Emirates Securities and Commodities Authority on the "mechanism and conditions of implementation" of ESOPs has not been issued and published yet.

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 Currently, no. If at all and until recently, stock options have been granted by Austrian stock companies (Aktiengesellschaft). Due to legal restrictions the GmbH (except for certain exceptional cases) cannot hold 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 a GmbH also requires an Austrian notarial deed (Notariatsakt).
However, with effect from January 1, 2024, a new form of legal entity, so called flexible company (Flexible Kapitalgesellschaft; FlexCo) being a hybrid form between a GmbH and a stock company (Aktiengesellschaft), has been introduced in Austria. FlexCo provides for a myriad of "start-up" or "stock options" friendly corporate solutions (such as establishing a new class of shares - company value shares - granting limited shareholder rights with reduced economic risk, possibility of FlexCo to hold its own shares, possibility of implementing a conditional capital increase (e.g., for granting stock options) and simplified transferability of the shares without the requirement of an Austrian notarial deed (Notariatsakt)) which could contribute to the popularisation of stock option plans in Austria.

Brazil It is cultural in some multinational enterprise groups. Domestic stock option plans are common.

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.

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.

Portugal No, but stock options plans are increasing in the context of IT companies and start-ups.

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

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

Spain It is common in senior positions and start-ups.

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

Austria Austrian tax law provides tax incentives for specific types of employee incentive programmes. For stock options there is technically no specific tax benefit. Under certain circumstances stock options may fall under the regime of tax incentive.

As of 2024 a new tax benefit has been implemented which – subject to specific conditions – mainly targets the granting of shares to employees by start-up companies.

Brazil No.

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

Czech Republic In principle, no.

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, equal to the difference between (i) the share price at the time of exercise and (ii) the strike price, is treated as an employment income. However, there is a social security benefit for both the French employer and the French employees:
• For the French employer, the acquisition gain will benefit from an exemption of social charges, set between 40 and 45%, under certain conditions. If so, the employer will only be subject to an employer social contribution of 7,5% assessed on the value of the underlying shares at the time of the grant, which must be paid by the French employer within 2 months as from the grant date.
• For the French employee, the acquisition gain will be subject to the social security contributions and to the specific contribution at a global rate of 19,7%, instead of the usual social security charges set between 20 and 25%.

Germany No, there is no special tax benefit to employees. In very limited cases an annual tax allowance of EUR 1,440.00 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.

Portugal Stock option capital gains earned by employees granted by certain types of entities, namely start-ups, small and medium-sized enterprises and R&D entities, which are held for a period of not less than one year, are considered in 50% of its tax value, at a rate of 28% (which corresponds to an effective tax rate of 14%). Taxation will arise on the first of the following moments: (i) alienation of shares; (ii) lost of Portuguese residency.
The above does not apply to members of corporate bodies or capital shareholders above 10%, regarding the employer entity.

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.

Spain When the employee exercises the stock option the employee will be taxed in their Personal Income Tax and must reflect the market value of the shares as income from work in kind.
The employees might apply a 30% reduction -with a limit of €300,000 - on income obtained from the exercise of the stock options.
30% tax reduction is applicable provided that (i) employees have not applied this reduction in the previous 5 tax years; and (ii) income is obtained in a single tax year; and (iii) is generated in a period of more than 2 years.

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.