- Can a company issue stock options/restricted units in your jurisdiction?.
- If yes, is it a common practice to issue stock options/restricted units in your jurisdiction?
- Is it allowed for the residents of your jurisdiction to receive stock options/restricted units from foreign companies?
- 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/restriced units are considered a notifiable event in your jurisdiction?
- 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 partricipant 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?
- 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 company issue stock options/restricted units in your jurisdiction?.
Yes, to a limited extent.
Note that stock options/RSUs and underlying plans are not specifically regulated in Slovakia. They are introduced primarly as a matter of contractual arrangement or through a foreign vehicle.
2. If yes, is it a common practice to issue stock options/restricted units in your jurisdiction?
No.
Usually this is only limited to start-ups, certain PE-held local entities, and certain global corporations introducing global plans at the local level
3. Is it allowed for the residents of your jurisdiction to receive stock options/restricted units from foreign companies?
No.
In practice, certain plans are based on stocks options/RSUs offerred by a foreign company (e.g. parent or special-purpose company) rather than having them localised to a Slovak entity
4. Does your jurisdiction have special regulations applicable to stock options/restricted units granted to its residents from foreign companies?
No.
5. 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?
Mostly no.
This is regulated by the Prospectus Regulation (Regulation (EU) 1129/2017) and depends on the offering regime. In practice, prospectus regimes are rarely used.
6. Whether the grant and/or vesting of stock options/restriced units are considered a notifiable event in your jurisdiction?
Yes.
This depends on the type of stock options/restricted units
7. 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?
Yes.
Regulatory requirements related to the prospectus, capital markets and AML
8. Is it necessary to undergo any kind of registration of foreign stock option plan in order for the residents of your jurisdiction to participate?
Possibly yes.
This depends on which offering regime under the Prospectus Regulation is made
9. Does your jurisdiction have special taxation rules applicable to stock options/restricted units?
Yes.
New tax legislation is expected to apply from 1 January 2024
10. Whether grant/vesting of stock option is considered a taxable event for participant in your jurisdiction?
Yes sometimes.
New tax legislation is expected to apply from 1 January 2024.
11. Whether spread between exercise price of option and market price of shares is considered taxable income for partricipant in your jurisdiction?
Yes.
New tax legislation to apply from 1 January 2024
12. Whether investment gain on sale of shares received upon exercise of option are subject to tax in your jurisdiction?
Yes.
New tax legislation to apply from 1 January 2024
13. Whether grant of restricted units is considered a taxable event in your jurisdiction?
No.
14. Whether vesting of restricted units is considered a taxable event in your jurisdiction?
Yes.
15. Whether there is a risk of double taxation upon sale of shares received under restricted units by participant in your jurisdiction?
Generally no.
16. Whether there is separate securities tax applied to shares received under stock option/restricted unit in your jurisdiction?
No.
17. Whether social security taxes may apply to benefits received by participant under stock option plan?
Yes.
18. Is there a risk of double taxation for the residents of your jurisdiction in case of receiving foreign stock options/restricted units?
Generally no.
19. 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.
20. Is it necessary in your jurisdiction to have stock option plan documents translated into local language?
Yes, depending on to whom they are offered. If the plan is granted as part of the employment relationship, a translation will be necessary.
Commonly, a translation is not required if the plan is offered outside employment, unless public authorities conduct an audit.
21. Is it required for a participant of the plan to have a separate bank account in order to pay for vested shares?
No.
22. Whether there are any restrictions in your jurisdiction on granting stock options/restricted units to independent contractors?
No.
23. Does the company have consultation obligation towards employee representative bodies (e.g. works council) prior to launching a stock option plan in your jurisdiction?
Yes.
Although there is no specific obligation regarding stock option plans, this may well be captured under the general consultation duty concerning new social, economic or similar plans for employees
24. Besides having a plan, is it required/recommended in your jurisdiction to conclude a separate option/unit award agreement with the employee?
Yes.
For various complexities and variabilities of the plans and their structures discussed above, having a separate agreement is preferred in practice