Stock Options for Employees in Netherlands

Stock options for employees in the Netherlands

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 the Netherlands. 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 the Netherlands?

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

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

How are NSOs taxed in the Netherlands?

In the Netherlands, 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 subject to Dutch personal income tax, with the possibility to postpone taxation until the shares become “freely tradeable.”	The spread (i.e., the difference between the fair market value of the shares and the exercise price) is subject to Dutch personal income tax, with the possibility to postpone taxation until the shares become “freely tradeable.”	Generally, the spread (i.e., the difference between the fair market value of the shares and the exercise price) is included and processed in the contractor's income from “enterprise, employment and housing” (“inkomen uit werk en woning”).
After the taxable moment	The holding of the shares are disclosed, and then taxed. This is called “deemed income from savings and investments.”	The holding of the shares are disclosed, and then taxed. This is called “deemed income from savings and investments.”
At sale	Taxation depends on: (1) whether the shares were freely tradable at the time of exercise, and (2) if they were not, whether the employee has expressly requested to be taxed at the time of exercise.	Taxation depends on: (1) whether the shares were freely tradable at the time of exercise, and (2) if they were not, whether the employee has expressly requested to be taxed at the time of exercise.	Taxation is assessed on a case by case basis.

Are there tax advantages for your team members?

Direct employees	EOR employees	Contractors
If the employee opts to postpone taxation until the shares become “freely tradeable,” this avoids “dry taxation” (which typically occurs at a time when shares are illiquid). However, being taxed at this time also increases the taxable base, as the full amount of the value increase from the time of grant to the time of sale would be taxed. If the employee exercises earlier, then only part of the increase in value (the one occurring between grant and exercise) is subject to income tax, and any value increase from the time of exercise to the time of sale is subject to lower taxation (as part of the "deemed income from savings and investments"). The gain wouldn't be taxed as such because there are typically no taxes on capital gains unless the employee holds a significant participation.	If the employee opts to postpone taxation until the shares become “freely tradeable,” this avoids “dry taxation” (which typically occurs at a time when shares are illiquid). However, being taxed at this time also increases the taxable base, as the full amount of the value increase from the time of grant to the time of sale would be taxed. If the employee exercises earlier, then only part of the increase in value (the one occurring between grant and exercise) is subject to income tax, and any value increase from the time of exercise to the time of sale is subject to lower taxation (as part of the "deemed income from savings and investments"). The gain wouldn't be taxed as such because there are typically no taxes on capital gains unless the employee holds a significant participation.	There are no tax-favored schemes of note for contractors.

Is your business eligible?

If you want to use Remote Equity Advanced to offer stock options to your Netherlands-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.

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