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 Estonia

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 Estonia. 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 Estonia?

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

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

It may also happen that some contractors work with you through a personal management company. This is a corporate vehicle that is owned and managed by the same natural person, and is usually set up for limitation of liability, personal accounting, and tax purposes.

How are NSOs taxed in Estonia?

In Estonia, 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 There is no taxation at exercise. There is no taxation at exercise. There is no taxation at exercise.
At sale The difference between the sale price and the “acquisition cost” of the shares is subject to personal income tax. There are no employer taxes if the stock options are exercised more than 3 years after the grant. The difference between the sale price and the “acquisition cost” of the shares is subject to personal income tax. If the contractor works as a natural person, the difference between the sale price and the “acquisition cost” of the shares is subject to personal income tax. However, other rules apply if the contractor works through a personal management company.

Are there tax advantages for your team members?

Direct employees EOR employees Contractors
N/A There is no tax-favored scheme, although there are legislative loopholes that may lead to an informal tax exemption. Stock options granted to contractors working as a natural person are favorably taxed in Estonia (under certain conditions).

Is your business eligible?

If you want to use Remote Equity Advanced to offer stock options to your Estonia-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 »