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  • Restricted stock and RSUs

    Securities

    As long as:

    • The offer is not advertised or publicized
    • The stock is not traded in Argentina
    • The offer is limited to employees
    • The offer is intended to compensate employees and not to raise capital, no securities law requirements apply

    Foreign exchange

    There are no foreign exchange restrictions applicable to restricted stock or RSUs.

    Tax

    Employee

    The employee is taxed on restricted stock upon grant and on RSUs upon vesting (may include personal assets tax).

    The employee is subject to a flat tax of 15% on any net gain resulting from the sale of the shares by Argentine Tax residents, or, alternatively, 13.5% on the gross sale price by non-residents.

    Employer

    Withholding & reporting

    Tax withholding and reporting are required upon grant for restricted stock and upon vesting of RSUs.

    Deduction

    Argentine subsidiaries are allowed to deduct the amount reimbursed to the parent company for the cost of the benefits if a Reimbursement or Recharge Agreement is in place.

    Social insurance

    Social insurance contributions are generally payable by the employee and employer.

    Data protection

    Obtaining an employee's written consent for the processing and transfer of his or her personal data is the most common approach to comply with certain aspects of data protection requirements. The employer also is required to register any database that includes an employee's personal data with the Argentine privacy authorities.

    Labor

    Benefits received from restricted stock or RSUs may be considered part of the employment relationship and included in a severance payment if the awards are repeatedly granted to an employee. Upon involuntary termination of employment, an employee may be entitled to continued vesting and other rights with respect to his or her award. In order to reduce the risk of employee claims, the award agreement signed by an employee should provide, among other things, that vesting of restricted stock or RSUs ceases upon termination of employment, and that the plan and any awards under it are discretionary.

    Communications

    Although plan materials are not required to be translated into Spanish, it is recommended, to ensure that employees understand the terms of their awards. Award materials should be addressed to individual employees in order to avoid securities law requirements.

  • Stock options

    Securities

    As long as:

    • The offer is not advertised or publicized
    • The stock is not traded in Argentina
    • The offer is limited to employees
    • The offer is intended to compensate employees and not to raise capital, no securities law requirements apply

    Foreign exchange

    There are no foreign exchange restrictions applicable to option plans.

    Tax

    Employee

    The employee is taxed on the spread upon exercise (including personal assets tax, if applicable). 

    The employee is subject to a flat tax of 15% on any net gain resulting from the sale of the shares by Argentine Tax residents, or alternatively 13.5% on the gross sale price by non-residents.

    Employer

    Withholding & reporting

    Tax withholding and reporting are required upon exercise.

    Deduction

    Argentine subsidiaries are allowed to deduct the amount reimbursed to the parent company for the cost of the benefits if a Reimbursement or Recharge Agreement is in place.

    Social insurance

    Social insurance contributions are generally payable by the employee and employer when an option is exercised.

    Data protection

    Obtaining an employee's written consent for the processing and transfer of his or her personal data is the most common approach to comply with certain aspects of data protection requirements. The employer is also required to register any database that includes an employee's personal data with the Argentine privacy authorities.

    Labor

    Benefits received from an option may be considered part of the employment relationship and included in a severance payment if options are repeatedly granted to an employee. Upon involuntary termination of employment, an employee may be entitled to continued vesting and other rights with respect to his or her option. In order to reduce the risk of employee claims, the award agreement signed by an employee should provide, among other things, that vesting of an option ceases upon termination of employment, and that the plan and any awards under it are discretionary.

    Communications

    Although plan materials are not required to be translated into Spanish, it is recommended, to ensure that employees understand the terms of their awards. Award materials should be addressed to individual employees in order to avoid securities law requirements.

  • Stock purchase rights

    Securities

    As long as:

    • The offer is not advertised or publicized
    • The stock is not traded in Argentina
    • The offer is limited to employees
    • The offer is intended to compensate employees and not to raise capital, no securities law requirements apply

    Foreign exchange

    There are no foreign exchange restrictions applicable to stock purchase rights.

    Tax

    Employee

    The employee is taxed on the spread upon purchase.

    The employee is subject to a flat tax of 15% on any net gain resulting from the sale of the shares by Argentine Tax residents, or, alternatively, 13.5% on the gross sale price for non-residents.

    Employer

    Withholding & reporting

    Tax withholding and reporting are required upon purchase.

    Deduction

    Argentine subsidiaries are allowed to deduct the amount reimbursed to the parent company for the cost of the benefits if a Reimbursement or Recharge Agreement is in place.

    Social insurance

    Social insurance contributions are generally payable by the employee and employer when the shares are purchased.

    Data protection

    Obtaining an employee's written consent for the processing and transfer of his or her personal data is the most common approach to comply with certain aspects of data protection requirements. The employer also is required to register any database that includes an employee's personal data with the Argentine privacy authorities.

    Benefits received from a purchase right may be considered part of the employment relationship and included in a severance payment if purchase rights are repeatedly granted to an employee. Upon involuntary termination of employment, an employee may be entitled to continued participation in the plan. In order to reduce the risk of employee claims, the offer document signed by an employee should provide, among other things, that participation in the plan ceases upon termination of employment, and that the plan and any awards under it are discretionary.

    In light of restrictions on payroll deductions, alternative arrangements may be necessary for contributions to the plan.

    Labor

    Not applicable.

    Communications

    Although plan materials are not required to be translated into Spanish, it is recommended, to ensure that employees understand the terms of their awards. Award materials should be addressed to individual employees in order to avoid securities law requirements.

  • Key contacts
    Guillermo Cabanellas
    Guillermo Cabanellas
    Senior Partner DLA Piper (Argentina) [email protected] T +5411 41145500 View bio
    Augusto Nicolás Mancinelli
    Augusto Nicolás Mancinelli
    Of Counsel DLA Piper (Argentina) [email protected] T +5411 41145500 View bio
    Dean Fealk is the global contact for Global Equity.
    Dean Fealk is the global contact for Global Equity.
    [email protected] View bio

Stock options

Foreign exchange

Argentina

There are no foreign exchange restrictions applicable to option plans.

Australia

Aside from reporting requirements applicable to transfers in excess of AU$10,000 which are normally handled by the relevant financial institution, there generally are no foreign exchange control requirements applicable to options.

Austria

Reporting to the Austrian National Bank is required under certain circumstances.

Belgium

Options are not subject to any significant foreign exchange restrictions.

Brazil

Subject to certain foreign exchange requirements, employees may exercise options by sending funds abroad. Shares held outside of Brazil are subject to certain reporting requirements before the Brazilian Central Bank.

Canada

Options generally are not subject to any foreign exchange requirements.

Chile

Any investment in excess of US$10,000 by a Chilean resident in shares of a foreign company is subject to reporting requirements. For cumulative investments in excess of US$5 million, additional reporting requirements apply.

China

Approval from the State Administration of Foreign Exchange (SAFE) generally is required for foreign currency transactions (including the cross-border cash movements related to the stock awards). As part of this approval, the local subsidiary in China (ie, the employer of the participating employees) is required to open a special foreign exchange account with an approved Chinese bank to process the receipt and transfer of funds related to the stock awards. Periodic reporting requirements apply. The applicable SAFE requirements vary by region and are subject to change.

Colombia

Employee

When the option is vested by a Colombian resident employee and the stock is issued by a foreign entity, the Colombian resident employee must be registered with the Central Bank as Colombian investment in foreign entities.

When the option is vested by a non-Colombian resident employee and the stock is issued by a Colombian entity, the non-resident Colombian employees must be registered with the Central Bank as foreign investment in Colombia.

Colombian entities and its foreign affiliates

The relationship between Colombian employers and the foreign affiliates that issue the shares could also have foreign exchange implications (ie, if the difference between the stock value and the option price has to be reimbursed to the foreign party, a finance transaction between the Colombian employers and its foreign affiliate must be reported before the Central Bank).

Czech Republic

The employee may hold the funds abroad. Unless certain thresholds and other conditions are met, residents are no longer required to notify the Czech National Bank of the opening of an offshore account, to report the account balance or to notify the Czech National Bank when they receive or sell shares in a foreign entity.

Denmark

The tax authorities must be notified by Danish tax residents of foreign exchange transactions and foreign accounts (banking accounts, trading accounts, etc.).

Ecuador

Options generally are not subject to any foreign exchange restrictions.

Egypt

At present, there are no foreign exchange controls in Egypt. An Egyptian bank must handle any transfer of funds.

Finland

Stock options are not subject to any foreign exchange restrictions.

France

Under certain circumstances, employees must declare the transfer of currency to or from France.

Germany

Reporting may be required for certain bank transactions.

Greece

Reporting may be required in connection with foreign exchange transactions.

Hong Kong

There is no foreign exchange control in Hong Kong.

Hungary

Options generally are not subject to any foreign exchange restrictions.

India

India has a Liberalized Remittance Scheme, under which resident individuals may remit up to US $250,000 per financial year for any permitted current or capital account transaction. In this case, individuals would need to remit the funds separately from their personal accounts, after filing Form A-2 with their authorized dealer bank, and directly acquire foreign shares.

Alternatively, "general permission" has been given under Indian foreign exchange regulations, for an employee of the Indian subsidiary of a foreign company to indirectly acquire shares of the foreign parent company, as long as the conditions mentioned in the general permission are complied with. If these conditions are not met, Reserve Bank of India's approval will need to be obtained.

Annual reporting is also required in case the "general permission" route is followed.

Generally, sale proceeds must be repatriated within 90 days of the transaction.

Indonesia

Although options generally are not subject to any foreign exchange requirements, routine reporting is required on foreign exchange transactions.

Ireland

Options are not subject to any specific foreign exchange restrictions.

Israel

There are no specific foreign exchange restrictions.

Italy

Reporting may be required for shares held outside of Italy.

Japan

Payment between an employee and the foreign parent company in excess of ¥30 million is subject to reporting obligations. Issuance of stock options of ¥1 billion or more also triggers reporting obligations.

Malaysia

If the remittance of funds in relation to stock options is made in foreign currency, it is generally not subject to any foreign exchange requirements.

Mexico

Option plans are not subject to any specific foreign exchange restrictions.

Netherlands

No exchange control/foreign exchange requirements or restrictions apply.

New Zealand

Generally, there should not be issues of foreign exchange restrictions.

Norway

Except for certain large currency transactions, there are no specific foreign exchange requirements.

Philippines

There are generally no specific foreign exchange requirements applicable to stock options.

Poland

Reporting requirements may apply to currency transactions.

Portugal

There are no foreign exchange controls in Portugal for transfers made by individuals (financial institutions may however be required to notify the Bank of Portugal in case certain thresholds are reached).

Russia

Russian residents generally are allowed to remit foreign currency to purchase shares of foreign corporations. Provided certain restrictions and reporting requirements are met, employees generally may hold foreign currency in banks located outside of Russia. However, proceeds from a sale of the foreign stock must always be transferred to the bank accounts of Russian currency control residents, opened with a Russian bank.

Saudi Arabia

In general, option plans are not subject to any specific foreign exchange restrictions.

Singapore

Options are not subject to any specific foreign exchange restrictions.

Slovak Republic

Generally, there are no specific foreign exchange restrictions. Reporting obligations may apply under certain circumstances.

South Africa

A tax clearance certificate from the Exchange Control Department of the South African Reserve Bank is required for the purchase of shares overseas.

The approval of the Exchange Control Department of the South African Reserve Bank is necessary for employees that exceed their offshore investment allowance limit of ZAR 4 million. This limit is the aggregate of all amounts transferred out of South Africa by the employee at any time. Approval is required, whether or not the employees intend to use a cashless exercise method.

South Korea

As long as a resident acquiring foreign shares or stock options is a person who works at a "Foreign Invested Enterprise" as defined under the Foreign Investment Promotion Law, or a Korean subsidiary of an offshore company, the obligation to file a share acquisition report with the Bank of Korea will be exempted.

Transfer of funds outside of Korea above a certain amount to purchase shares must be confirmed by a Korean foreign exchange bank prior to such transfer.

Spain

Residents are required to declare their foreign securities interests annually (solely for statistical and administrative purposes).

Sweden

Options are not subject to any specific foreign exchange restrictions.

Switzerland

Options are not subject to any specific foreign exchange restrictions.

Taiwan

Reporting is required for currency transactions exceeding certain thresholds.

Thailand

Certain monetary restrictions apply to remittances for the purchase of shares in overseas companies. An authorized bank or dealer is required to remit funds overseas.

Certain repatriation requirements apply.

Turkey

Turkish residents must purchase foreign shares through banks or intermediaries that are approved under Turkish Capital Markets legislation. Employees must, therefore, remit funds to purchase shares through a bank or an approved intermediary when they exercise their options. These exchange control restrictions generally do not apply if the cashless method of exercise is used.

United Kingdom

Options are not subject to any specific foreign exchange restrictions.

Venezuela

Foreign exchange restrictions may limit the employees' ability to purchase and hold shares.

Vietnam

After the SBV's approval on the registration of the stock award plan, the Implementing Entity must open an account at the commercial bank in Vietnam recorded in the SBV’s approval in order to implement the registered stock award plan (eg, sale of stock and receipt of dividends by relevant employees under such plan). Note that the Implementing Entity can choose the commercial bank and indicate such bank in the registration application.