Remote Logo
English
Remote Logo
English
Pricing
Book Demo
×

Book a demo, see Remote in action


Find out how Remote can guide you through the complexities of managing cross-border hiring, payroll, taxes, and compliance.

 

Stock options for employees in Spain

Equity incentives are an invaluable way to attract, motivate, and retain top talent for your business. But when you cross hiring borders, they can become deeply complex.

Remote enables you to easily offer non-qualified stock options (NSOs) to your team members in Spain. There are no compliance headaches or administrative hassles — just simplicity and clarity for you and your people at every step.

What are NSOs?

NSOs are a type of equity incentive. They give your team members the right to buy a set number of shares in your company at a fixed price, known as the exercise price.

This typically happens after a vesting period, which is often based on the length of time your team member stays at your company. As a result, they are a great way to foster long-term commitment, and align people with your company’s strategic goals.

Who can receive NSOs in Spain?

Direct employees EOR employees Contractors
Can receive NSOs? Yes Yes Yes
Difficulty score Hard Hard Easy

It’s important to note that granting stock options to contractors can also potentially increase your misclassification risk in Spain (although this is not the primary factor). See how Remote protects you against misclassification.

How are NSOs taxed in Spain?

In Spain, NSOs are taxed in the following ways:

Direct employees EOR employees Contractors
At grant There is no taxation at grant. There is no taxation at grant. There is no taxation at grant.
At exercise The spread (i.e., the difference between the fair market value of the shares and the exercise price) is taxed at progressive income tax rates depending on the employee’s tax residence. Social security applies. The spread (i.e., the difference between the fair market value of the shares and the exercise price) is taxed at progressive income tax rates depending on the employee’s tax residence. Social security applies. The spread (i.e., the difference between the fair market value of the shares and the exercise price) is taxed at progressive income tax rates depending on the contractor’s tax residence. Social security applies.
At sale Any gain is taxed as savings income. Any gain is taxed as savings income. Any gain is taxed as savings income.

Note that, upon exercise over a certain value, the grantee may have to file an annual tax information report to the tax authorities. This is only a reporting obligation; no taxes are due.

Are there tax advantages for your team members?

Direct employees EOR employees Contractors
Employees — under certain conditions — may be entitled to a reduction on the taxation of the spread at the time of exercise. Under certain conditions and restrictions, your employee can benefit from a tax exemption of a percentage of the taxable gain at exercise. Another slight advantage is the fact that capital gains are taxed less heavily than salary income. In general, the earlier the employee exercises, the better (from a tax perspective). Any increase in the value of the shares between the time of exercise and the time of sale will be subject to a lower tax rate. Under certain conditions and restrictions, the employee can benefit from a tax exemption of a percentage of the taxable gain at exercise. Another slight advantage is the fact that capital gains are taxed less heavily than salary income. In general, the earlier the employee exercises, the better (from a tax perspective). Any increase in the value of the shares between the time of exercise and the time of sale will be subject to a lower tax rate. Under certain conditions and restrictions, your contractor can benefit from a tax exemption of a percentage of the taxable gain at exercise. Another slight advantage is the fact that capital gains are taxed less heavily than salary income. In general, the earlier the contractor exercises, the better (from a tax perspective). Any increase in the value of the shares between the time of exercise and the time of sale will be subject to a lower tax rate.

Is your business eligible?

If you want to use Remote Equity Advanced to offer stock options to your Spain-based team members, your top corporation (i.e., your parent company) must be incorporated in Delaware. Your company must also be private — not publicly listed.

OSZAR »