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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

    Since September 1, 2019, the Argentine government reenacted FX controls and regulations. These FX regulations are applicable to certain operations.  Notwithstanding there are no foreign exchange restrictions applicable to restricted stock or RSUs, local employees may face difficulties in purchasing the foreign currency if the options are in foreign currency, or to transfer money abroad.

    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

    Since September 1, 2019, the Argentine government reenacted FX controls and regulations. These FX regulations are applicable to certain operations.  Notwithstanding there are no foreign exchange restrictions applicable to restricted stock or RSUs, local employees may face difficulties in purchasing the foreign currency if the options are in foreign currency, or to transfer money abroad.

    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

    Since September 1, 2019, the Argentine government reenacted FX controls and regulations. These FX regulations are applicable to certain operations. Notwithstanding there are no foreign exchange restrictions applicable to restricted stock or RSUs, local employees may face difficulties in purchasing the foreign currency if the options are in foreign currency, or to transfer money abroad.

    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
    Partner DLA Piper (Argentina) [email protected] T +5411 41145500 View bio

Stock options

Data protection

Argentina

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.

Australia

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 required to ensure that an employee's tax file number and other personal data are used only for the purpose agreed upon in writing by the employee.

Austria

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. Strict rules apply to data transfer outside the EEA.

Belgium

Consent can be a lawful ground for the processing and transfer of personal data, but it may not always be deemed to be valid in an employee-employer relationship, as one of the core requirements is that it is "freely given"– which can be difficult to establish if given after an employee has entered into an organization’s employ.  In this context, it is easier to obtain valid consent if the entity granting the benefits in question is a group entity other than the actual employer.  For this reason, it may in certain circumstances be more appropriate to invoke another lawful basis for processing, such as the necessity of the processing and transfer for performance of a contract with the employee (to the extent such is the case).  In addition, the employer also is required to register any database that includes employee personal data with the Belgian privacy authorities.  The transfer of personal data outside the EU thus requires prior notice and registration with the Belgian Privacy Commission, as well as a lawful basis for transfer (eg, explicit employee consent or necessity for performance of a contract with the employee), in addition to various other requirements related to the conditions of collection, use and transfer of such data.

Brazil

Obtaining employee consent for the processing and transfer of personal data is recommended.

Canada

Privacy legislation generally requires that an organization must obtain an individual's consent to the collection, use and disclosure of personal information, which is defined as any information about an identifiable individual. There are limited exclusions to this requirement. For example, some provincial legislation provides that certain types of employee personal information may be excluded from the consent requirement where used only for the purpose of establishing, managing or terminating the employment relationship, although requirements regarding notice, retention and data security measures still apply. Compliance with all applicable privacy legislation is necessary.

Chile

Obtaining employee consent for the processing and transfer of personal data is recommended. Such consent should be in Spanish.

China

Obtaining employee consent for the processing and transfer of personal data is recommended.

Colombia

Data protection legislation generally requires the organization to obtain individual's written consent to the collection, use and disclosure of personal information, which is defined as any information about identifiable individual.  This consent shall be obtained prior to the collection of the personal data and shall cover the specific purposes for which the data will be processed (including granting stock options).  Thus, it is mandatory for the employer to obtain the consent from the employee for the processing of their personal data.  For this purpose, keep a record of such consent and provide the employee with the employer´s data privacy policy and/or a privacy notice that informs which information is going to be collected, the purposes of the processing, the rights of the data subject (as provided by law), the complete information and contact details of the employer and the means to consult its data privacy policy.

Czech Republic

Data protection matters are regulated by the GDPR. Generally, employee consent is not required, subject to applicable exceptions.

Denmark

Obtaining employee consent for the processing and transfer of personal data is a means to comply with certain aspects of the Danish data protection requirements. Case-by-case analysis is recommended.

Ecuador

Obtaining employee consent is mandatory for the processing and transfer of personal data.

Egypt

Employers are advised to make disclosures to employees about processing personal data. Obtaining employee consent is required for the processing and transfer of personal data to third parties.

Finland

In order to comply with certain aspects of the data protection requirements, obtaining consent for the processing and transfer of personal data is recommended.

France

Obtaining employee consent for the processing and transfer of personal data is recommended. Employers are also advised to disclose data processing activities to employees. The Commission Nationale de L'lnformatique et des Libertés (CNIL) must be notified of any databases that include employees' personal information.

Tax and social regime applicable to non-qualifying plans

The gains realized upon vesting of stock options granted pursuant to non-qualifying plans are treated as salary for tax and social purposes.

As such, vesting gains are subject to the progressive scale of income tax (with a maximum rate of 45 percent) and to a special 3- to 4-percent surtax on high income.  As from 2019, income tax on non-qualifying plans are withheld by employers, who are also in charge of withholding income tax on salaries.

From a social standpoint, employer social security charges are due at a maximum rate of approximately 45 percent and employee social security charges are due at a maximum rate of approximately 25 percent, including 22.1 percent deductible for income tax purposes.  Both employer and employee social charges are withheld by the employing entity.

Germany

Obtaining employee consent for the processing and transfer of personal data is recommended. The consent must be easily discernible in appearance (eg, in an alternate font or typeface) if it is given in conjunction with other declarations.  Employers are required to amend their internal records of data processing operations accordingly. Starting from May 25, 2018 a new Data protection law will apply (BDSG-new). Under the BDSG-new employee consent will only be valid if given freely. Consent may be deemed to be given freely if it is associated with a legal or economic advantage for the employee, or if the employer and employee are pursuing the same interests. Processing in connection with restricted stock and RSUS entails such an economic advantage for the employee. Consent must be given in writing.

Greece

Employers will keep a file of and process the employees’ personal data for the purpose of human resources management, for the performance of the employment agreement as well as for the purposes related to the equity compensation programs, according to all applicable data protection and privacy laws, rules and regulations, and especially to the General Data Protection Regulation 679/2016 (GDPR), L. 4624/2019 implementing the GDPR in Greece, the pertinent resolutions and directives issued by the Greek Data Protection Authority as well as any other applicable law amending, supplementing or replacing the GDPR.  In case of transfers of employees’ personal data to recipients located outside of the EU or the European Economic Area, such as in the US, where the data protection laws may not provide a level of protection equivalent to the laws in Greece, employers undertake to enter into any appropriate data transfer agreements based on Standard Contractual Clauses approved by the European Commission, or to take any other measure to provide an adequate level of data protection.

Hong Kong, SAR

Notification for the collection, processing and transfer of personal data is required.  There is no current requirement to register with the data protection authority. That said, the data protection authority is considering implementing the registration requirement in phases. To comply with certain aspects of existing data protection requirements, it is recommended that employee consent be obtained for the transfer of personal data outside of Hong Kong.

Hungary

Employee consent is generally required for the processing and transfer of personal data.

India

Obtaining employee consent for the processing and transfer of personal data is recommended.

Indonesia

Obtaining employee consent for the processing and transfer of personal data is recommended.

Ireland

As of May 25, 2018, companies must comply with Irish data protection laws, including the GDPR, when processing employees' personal data.  This includes, but is not limited to, providing required data protection disclosures, ensuring that there is a legitimate basis for such processing (relying on employee consent is not recommended), ensuring written agreements with any processors are in place and contain the mandatory provisions, complying with mandatory notification obligations regarding data breaches to the relevant supervisory authority and complying with restrictions on the transfer and export of personal data from Ireland to non-EEA countries.

Israel

Employee consent for the processing and transfer of personal data is required. In certain situations, the employer may be required to register its database with the data protection authorities.

Italy

In order to comply with certain aspects of existing data privacy requirements, it is recommended that an employer obtain its employees' consent to the processing and transfer of their personal data. Typically, no employee's personal information can be processed or transferred until the employer registers with Italy's data protection authorities.

Japan

Obtaining employee consent for the processing and transfer of certain sensitive information is mandatory pursuant to the revised Act on Protection of Personal Information.

Malaysia

All personal data must be processed in compliance with the Malaysian Personal Data Protection Act 2010 (PDPA). Generally, the processing of personal data requires consent of the data subject unless one of the prescribed exceptions applies, eg, the processing is necessary for the performance of a contract to which the data subject is a party. However, it is a matter of best practice for written consent to be obtained by the data user prior to any processing of personal data.

The PDPA also requires the data user to give a written notice to the data subject of certain information and the written notice must be given in both Bahasa Malaysia, which is the national language of Malaysia and English.

Mexico

Mexico has enacted a comprehensive federal data protection law. Employee consent for the processing, disclosure and transfer of personal data is required.

Netherlands

In order to comply with certain aspects of existing data protection requirements, it is recommended that employee consent be obtained for the processing and transfer of personal data, and that the employees are properly informed about the data processing. The employer also is required to register all data processing activities and any database that includes an employee's personal data with the Dutch data protection authorities.

Personal data can only be transferred to a non-EU/EEA country if such country provides an adequate level of protection, or if additional safeguards have been implemented.

Personal data may not be further processed in a way incompatible with the purposes for which the data were collected. Personal data may only be processed where, given the purposes for which they are collected or subsequently processed, they are adequate, relevant and not excessive. Sensitive data may not be processed, unless an exception applies.

New Zealand

Obtaining employee consent for the processing and transfer of personal data is required before the transfer of personal data abroad.

Nigeria

There is no specific data protection legislation in relation to the collection, storage, processing, management and treatment of personal information of employees. However, recourse is usually had to the provisions of the Nigerian constitution, which guarantees the right of citizens to privacy of their homes, telephone conversations and telegraphic communications, as well as the 2019 Data Protection Regulations, which provides for the requirement of the consent of a data subject before the use, collection and processing of personal data belonging to that person for a specific and lawful purpose.

In the absence of specific protections under the law relating to employees, employers are also advised to ensure that the terms of each employee’s contract of employment contains a provision pursuant to which an employee consents to the purpose, treatment and use by the employer, of any personal information provided by the employee to the employer in the context of the employment relationship.

Norway

The employer must have sufficient legal basis for the processing of personal data under the plan. For example, such processing is necessary in order to administer obligations under the plan.  Specific conditions must be met if personal data is to be transferred outside the EU/EEA.

Philippines

Employee consent for the processing and transfer of personal data should be obtained.

Poland

GDPR (Regulation EU 2016/679), which is applicable from May 25, 2018, changed the data protection regime. The transfer of personal data to third countries shall take place according to the GDPR regulations. Not all domestic provisions on the processing of employees' personal data have been set out. Some amendments will be implemented soon as they are still going through the legislative procedure. Categories of personal data of candidates and employees that can be processed by an employer and exceptions to general principles in this respect shall be regulated in the Polish Labor Code.

Portugal

In order to comply with certain aspects of data protection requirements and of the GDPR, it is essential to assess which is the legal basis for the collection and processing of personal data, having in mind the specific circumstances of the case (eg,.  execution of a labor agreement, employee consent).  In case the processing of personal data falls outside the scope of a labor agreement execution, the employee consent for transfer of personal data may be required.  Since the implementation of the GDPR, employers are no longer required to register their employee database or request prior authorization from the Portuguese Data Protection Authority (CNPD) to process employees’ personal data.  In any case, it is crucial that all mandatory information regarding the processing of such personal data, notably the data subjects’ rights (eg,.  right of access, rectification) is provided to the employees.

Russia

Obtaining employee consent for processing and transferring personal data is required.

Saudi Arabia

Obtaining employee consent for the processing and transfer of personal data is recommended.

Singapore

Obtaining employee consent for the processing and transfer of personal data is required.

Slovak Republic

The Slovak Republic’s adoption of the GDPR is reflected in Act No. 18/2018 Coll.  on protection of personal data and on amending and supplementing of certain acts (Slovak Act).  The Slovak Act became valid as of January 30, 2018 and effective as of May 25, 2018.  It repealed the previous Act No.  122/2013 Coll.  on protection of personal data.

In general, the GDPR, alongside certain parts of the Slovak Act, applies to the processing of personal data.

The Slovak Act regulates certain specific situations, e.g.:

If a controller is an employer of a data subject, it is entitled to provide or to publish the data subject's personal data in the extent of academic title, name, surname, position, personal employee's number, department, place of work performance, telephone number, fax number, work email address and the identification details of employer if it is necessary for the completion of the work tasks.  However, provision of such personal data shall not interfere the reputability, honor and security of a data subject.

The processing of a national identification number (birth number) is permitted only if its use is necessary to achieve the given purpose of processing and the special regulation shall not prohibit such processing.  The consent to the processing of a national identification number must be explicit and must not be precluded by a specific regulation when it is processed on the legal basis of the data subject's consent.  The publication of birth number is prohibited.

South Africa

Obtaining employee consent for the processing and transfer of personal data is recommended.

South Korea

Obtaining employee consent for the processing and transfer of personal data is required. The Personal Information Protection Act (PIPA) was amended to require the important aspects of consent form for personal information collection be shown clearly (the amended PIPA became effective on October 19, 2017). The amended PIPA requires such important aspects:

  • To be shown at least 20% larger than the rest of the content of the consent form, but in any case, in the font size of at least 9 points
  • To be clearly readable by using a different color, underline or bold typeface

The amended PIPA defines the "important aspects" to include:

  • The fact that sensitive personal information or unique identification information (passport number, driver's license number and foreigner registration number) will be processed
  • If the personal information will be provided to a third party, the identity of the recipient and the recipient's purpose of using the personal information
  • The retention and use period

Spain

The GDPR (Regulation EU 2016/679) entered into force on May 25, 2018, substantially changing the data protection regulatory regime applicable in the EU, including Spain.  While employee consent remains an option, depending on the data processing to be carried out, employers may rather rely on other legitimating bases for the processing of employees' personal information (eg, fulfilment of a legal duty, of a contractual obligation, legitimate interest).  Registration of an employee related database is no longer necessary as of that date.  However, other control/data management and security requirements will need to be fulfilled.  The GDPR allows member states to further regulate employment-related privacy issues and, therefore, by the end of 2018, Spain passed a new data protection act (Spanish Fundamental Act 3/2018) to supplement the data protection regime contained therein.

Sweden

Obtaining employee consent for the processing and transfer of personal data is a means to comply with certain aspects of the data protection requirements.

Switzerland

Obtaining written consent from employees is recommended prior to transferring any personal information to the parent company or a third-party administrator.

Taiwan, China

Employees' consent must be obtained prior to the collection, processing and transfer of personal data.

Thailand

Obtaining employee consent for the collection, processing, disclosure and transfer of personal data is required. The purpose of such collection, processing, disclosure and transfer of personal data must also be acknowledged by the employee upon receiving the consent.

Turkey

Describing to the employee the purposes of processing his/her personal data and obtaining the employee's consent under certain circumstances, for processing and transfer of personal data is legally required.

United Kingdom

Companies must consider on what basis and to what extent they are legally permitted to process and transfer participant data and should provide a notice to UK-based participants accordingly.

Venezuela

Obtaining employee consent for the processing and transfer of personal data is required.

Vietnam

The implementing entity must obtain consent from relevant employees prior to the processing and transfer of their personal data.