- Can a local company issue stock options/restricted units in your jurisdiction?
- If yes, is it a common practice to issue stock options/restricted units by local company in your jurisdiction?
- Is it allowed for the residents of your jurisdiction to receive stock options/restricted units from foreign companies?
- Is it common to use recharge mechanisms with local companies when the stock options/restricted units are issued by foreign company?
- Does your jurisdiction have special regulations applicable to stock options/restricted units granted to its residents from foreign companies?
- When stock options/restricted units are granted by foreign company, is it commonly required to have prospectus or other offering to be published in your jurisdiction?
- Whether the grant and/or vesting of stock options/restricted units are considered a notifiable event in your jurisdiction from the company’s (issuer) perspective?
- Are there any regulatory or other restrictions that could significantly limit an ability of the residents of your jurisdiction to participate in foreign stock option plans?
- Is it necessary to undergo any kind of registration of foreign stock option plan in order for the residents of your jurisdiction to participate?
- Does your jurisdiction have special taxation rules applicable to stock options/restricted units?
- Whether grant/vesting of stock option is considered a taxable event for participant in your jurisdiction?
- Whether spread between exercise price of option and market price of shares is considered taxable income for participant in your jurisdiction?
- Whether investment gain on sale of shares received upon exercise of option are subject to tax in your jurisdiction?
- Whether grant of restricted units is considered a taxable event in your jurisdiction?
- Whether vesting of restricted units is considered a taxable event in your jurisdiction?
- Whether there is a risk of double taxation upon sale of shares received under restricted units by participant in your jurisdiction?
- Whether there is separate securities tax applied to shares received under stock option/restricted unit in your jurisdiction?
- Whether social security taxes may apply to benefits received by participant under stock option plan?
- Is there a risk of double taxation for the residents of your jurisdiction in case of receiving foreign stock options/restricted units?
- Is there a possibility for stock option plan to benefit from any special taxation regime in your jurisdiction, in case if certain conditions are met?
- Whether the burden of tax reporting of taxable income received from stock options/restricted units issued by foreign company lies with the participant or the company (including local subsidiary in cases of recharge mechanisms)?
- Is it common in your jurisdiction to offer cash payout to the participants instead of shares as a result of stock options exercise/restricted units vesting?
- Is it necessary in your jurisdiction to have stock option plan documents translated into local language?
- Is it required for a participant of the plan to have a separate bank account in order to pay for vested shares?
- Whether there are any restrictions in your jurisdiction on granting stock options/restricted units to independent contractors?
- Does the company have consultation obligation towards employee representative bodies (e.g. works council) prior to launching a stock option plan in your jurisdiction?
- Besides having a plan, is it required/recommended in your jurisdiction to conclude a separate option/unit award agreement with the employee?
1.Can a local company issue stock options/restricted units in your jurisdiction?
Yes.
2. If yes, is it a common practice to issue stock options/restricted units by local company in your jurisdiction?
No.
This is an uncommon practice in Bulgaria. However, in recent years it has become more popular as a way to stimulate employees.
3. Is it allowed for the residents of your jurisdiction to receive stock options/restricted units from foreign companies?
Yes.
4. Is it common to use recharge mechanisms with local companies when the stock options/restricted units are issued by foreign company?
Yes, it is common, as it allows local companies to recharge some of the costs to the parent company.
5. Does your jurisdiction have special regulations applicable to stock options/restricted units granted to its residents from foreign companies?
No.
6. When stock options/restricted units are granted by foreign company, is it commonly required to have prospectus or other offering to be published in your jurisdiction?
No.
7. Whether the grant and/or vesting of stock options/restricted units are considered a notifiable event in your jurisdiction from the company’s (issuer) perspective?
Yes.
A grant is considered a notifiable event for tax purposes only for stock options. However, for restricted units only, vesting is considered a notifiable event for tax purposes.
8. Are there any regulatory or other restrictions that could significantly limit an ability of the residents of your jurisdiction to participate in foreign stock option plans?
No.
9. Is it necessary to undergo any kind of registration of foreign stock option plan in order for the residents of your jurisdiction to participate?
No.
10. Does your jurisdiction have special taxation rules applicable to stock options/restricted units?
No.
11. Whether grant/vesting of stock option is considered a taxable event for participant in your jurisdiction?
Yes.
Generally, a grant of shares is a taxable event in Bulgaria, the taxable base being the fair market value of the shares granted.
12. Whether spread between exercise price of option and market price of shares is considered taxable income for participant in your jurisdiction?
Yes.
13. Whether investment gain on sale of shares received upon exercise of option are subject to tax in your jurisdiction?
Yes.
Income derived from the sale of the shares is treated as dividend income in Bulgaria.
14. Whether grant of restricted units is considered a taxable event in your jurisdiction?
No.
15. Whether vesting of restricted units is considered a taxable event in your jurisdiction?
Yes.
16. Whether there is a risk of double taxation upon sale of shares received under restricted units by participant in your jurisdiction?
Yes.
The capital gain will be taxed only if generated in Bulgaria.
17. Whether there is separate securities tax applied to shares received under stock option/restricted unit in your jurisdiction?
No.
18. Whether social security taxes may apply to benefits received by participant under stock option plan?
No.
19. Is there a risk of double taxation for the residents of your jurisdiction in case of receiving foreign stock options/restricted units?
Yes.
20. Is there a possibility for stock option plan to benefit from any special taxation regime in your jurisdiction, in case if certain conditions are met?
No.
There are no special taxation regimes in Bulgaria related to stock option plans.
21. Whether the burden of tax reporting of taxable income received from stock options/restricted units issued by foreign company lies with the participant or the company (including local subsidiary in cases of recharge mechanisms)?
In general, the employee carries the burden of reporting and paying the applicable tax due from the income gained. Typically, the local company is responsible for withholding taxes (if necessary).
22. Is it common in your jurisdiction to offer cash payout to the participants instead of shares as a result of stock options exercise/restricted units vesting?
No, this is not common practice.
23. Is it necessary in your jurisdiction to have stock option plan documents translated into local language?
Yes.
We recommend translating any document in a foreign language into Bulgarian, as this is the official language, if a public authority requests a copy.
24. Is it required for a participant of the plan to have a separate bank account in order to pay for vested shares?
No.
25. Whether there are any restrictions in your jurisdiction on granting stock options/restricted units to independent contractors?
No.
26. Does the company have consultation obligation towards employee representative bodies (e.g. works council) prior to launching a stock option plan in your jurisdiction?
No.
27. Besides having a plan, is it required/recommended in your jurisdiction to conclude a separate option/unit award agreement with the employee?
Yes.
It is advisable to have such an agreement in place in order to define the special conditions of the stock option plan.
