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

Stock options for employees in Italy

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 Italy. 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 Italy?

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 potentially increase your misclassification risk in Italy (although this is not the primary factor). See how Remote protects you against misclassification.

How are NSOs taxed in Italy?

In Italy, 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 is usually taxed as salary income. The spread is the difference between the fair market value of the shares at the time of exercise, and the exercise price (or “strike” price) paid by your team member. The spread is usually taxed as salary income. The spread is the difference between the fair market value of the shares at the time of exercise, and the exercise price (or “strike” price) paid by your team member. The spread is usually taxed as salary income. The spread is the difference between the fair market value of the shares at the time of exercise, and the exercise price (or “strike” price) paid by your team member.
After exercise Your team member must pay wealth tax on the owned shares. Your team member must pay wealth tax on the owned shares. Your team member must pay wealth tax on the owned shares.
At sale The difference between the sale price and the fair market value of the shares (at the time of exercise) are subject to capital gains tax. The difference between the sale price and the fair market value of the shares (at the time of exercise) are subject to capital gains tax. The difference between the sale price and the fair market value of the shares (at the time of exercise) are subject to capital gains tax.

Are there tax advantages for your team members?

Direct employees EOR employees Contractors
There are possible tax benefits if: The grant is not addressed to all your employees and EOR employees, but only to some employees (or categories of employees). The grant is conditional (e.g., based upon completion of a vesting period, the maintenance of the working relationship up to a certain date, or achievement of specific business results). The grant relates only to shares, with no mention of cash payments. There are possible tax benefits if: The grant is not addressed to all your employees and EOR employees, but only to some employees (or categories of employees). The grant is conditional (e.g., based upon completion of a vesting period, the maintenance of the working relationship up to a certain date, or achievement of specific business results). The grant relates only to shares, with no mention of cash payments. There is no tax-favored scheme unless the employee is new to the country, in which case only 30% of your team member’s professional income would be subject to tax.

Is your business eligible?

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