International taxation · Stock Options

Does anyone know what the most tax-efficient way to do international equity distributions is?

Elizabeth Charnock CEO at Chenope

September 16th, 2016

Is it generally better from a tax perspective to issue all stock options from the U.S. mother ship or have each foreign sub issue its own?

Specifically the concern is that non-US co-founders can get either/both get hit with very large taxes in their home country and/or possibly get hit with taxes from multiple countries. The most perverse case would be a German or French national employed by a U.K. entity who theoretically could get taxed by 3 different countries. (Yes obviously Brexit-related uncertainty complicates this considerably.)

I've heard apocryphal stories about 90% tax rates on options windfalls in some circumstances in Europe but I don't know to what extent they are exaggerations.  BTW, we also have Singapore as well as the US and EU.

I'm sure the answer is 'it depends' and further that whatever is true today may not be down the road, but any insights appreciated from the corporate attorneys or tax geeks out there. Thanks!