Ranking

Each country in Europe has its own legal framework and tax code, as well as a unique set of cultural norms. There is no common EU standard. That means the situation needs to be considered country-by-country.

We have reviewed and compared stock option treatment across 20 European countries, plus a further 4 outside of Europe.

To make things simpler, we’ve given each country a score for stock option friendliness’, as well as summarising various rules and regulations. We’ve identified six factors that contribute, scoring each on a five-point scale (5 = the most positive and beneficial).

  1. Plan scope

    Can all employees and company types benefit from favourable treatment of stock options?

  2. Strike price

    Can options be offered at a strike price below last-round valuation, without adverse tax treatment – reflecting that they are illiquid, high-risk, and non-preferred?

  3. Minority shareholders & bureaucracy

    When option holders exercise, they become minority shareholders, who may need to be consulted on various company decisions; does this make stock options unattractive to companies? How does this affect the treatment of leavers? And how much administrative burden and cost is associated with creating and maintaining the plan?

  4. Employee tax (timing)

    Are employees taxed only when they sell shares, or when they exercise – or even at the point of grant?

  5. Employee tax (rate)

    Which rate is applied – income, capital gains, or something else? Are employee social contributions payable, and if so, how much are they?

  6. Employer taxation

    Is there any financial impact for companies using stock options? If so, when is it incurred? What rate is applied? Are employer social contributions payable, and if so, how much?

Country Total Score Plan Scope Strike Price Minority Shareholders & Bureaucracy Employee Tax Timing Employee Tax Rate Employer Taxation
Latvia
30
5
5
5
5
5
5
Estonia
30
5
5
5
5
5
5
Lithuania
30
5
5
5
5
5
5
Israel
27
5
4
5
5
4
4
Canada
27
5
4
5
5
4
4
France
26
5
4
5
5
3
4
UK
25
3
5
3
4
5
5
Portugal
24
3
3
5
5
4
4
US
24
4
4
5
4
3
4
Poland
23
4
3
3
5
4
4
Italy
22
3
3
3
5
4
4
Sweden
21
2
3
3
5
4
4
Ireland
20
2
3
4
4
3
4
Australia
16
1
4
1
4
3
3
Denmark
15
1
2
3
3
2
4
Netherlands
15
1
3
3
3
2
3
Switzerland
14
1
3
3
3
1
3
Norway
14
2
3
3
3
2
1
Czech Republic
14
1
4
2
5
1
1
Finland
13
1
2
3
3
2
2
Austria
13
1
2
3
4
2
1
Spain
11
1
2
2
4
1
1
Germany
10
1
1
2
3
1
2
Belgium
10
1
2
1
1
1
4

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