Manage Equity For Remote Teams

Going remote has unlocked immense value for companies willing to think beyond their borders. Access to a deeper talent pool, lower hiring costs, and the freedom to build truly diverse teams can no longer be considered theoretical benefits.

Since 98% of professionals would like to work remotely going forward, a vast, untapped talent pool has opened up for employers ready to meet them where they are. However, this opportunity is not unique to you. If you can recruit globally, so can your competitors. In this environment, the ability to offer compelling equity compensation to remote employees is quickly becoming a critical differentiator.

Issuing equity across borders is not simply a matter of copying and pasting a domestic equity plan onto a global workforce. Tax jurisdictions, securities regulations, employer of record (EOR) arrangements, and the challenge of keeping distributed employees informed all introduce new layers of complexity.

Structuring SBC Plans Around Local Tax Rules

Each tax jurisdiction will tax gains from stock-based compensation differently. There will be differences in tax rates, qualifying conditions for long-term capital gains tax treatment, and tax-saving opportunities.

To fully leverage stock-based compensation, you must design tax-optimized plans for each jurisdiction where your remote employees reside.

How to Save Taxes on Equity Compensation: US vs. UK

	US	UK
Strategy	Early exercise of stock options by filing 83(B) elections	83(B) electionsTwo-step strategy where you: • Offer shares via Save As You Earn (SAYE) schemes or Share Incentive Plans (SIPs) • Advise employees to transfer these shares to their Individual Savings Accounts (ISAs)
What Does It Achieve?	Capital gains tax can be less than ordinary income tax. This strategy simultaneously: • Increases the portion of income that attracts capital gains tax • Reduces the portion that attracts ordinary tax	• No tax on the difference between the exercise price and the actual value of the shares if bought via SAYE • SIPs allow employers to give up to £3,600 worth of free shares • No capital gains tax on shares transferred to ISAs within 90 days of removal from SAYEs and SIPs

Issuing Equity Through EOR Arrangements: What You Need to Know

Companies often partner with third parties to act as the employer of record (EOR). This allows them to hire employees in other countries without setting up subsidiaries there. You can rely on EORs to handle compliance with local tax and labor laws.

However, equity compensation must still be issued directly to the EOR employee by you. In such cases, you must consult a local tax advisor and discuss the following queries:

• Does the country allow its residents to receive equity compensation from foreign companies?
• What kinds of equity compensation are allowed? (For example: Stock options, restricted stock units (RSUs), phantom stocks, and stock appreciation rights (SARs))
• Is equity compensation taxed upon grant and exercise?
• Are employers required to make Social Security-like contributions when they issue equity compensation?
• What kinds of disclosures are the employees entitled to?
• Which tax procedures should the employees be informed about?

Staying Ahead of Cross-Border Securities Compliance

A dimension of issuing equity internationally that often catches companies off guard is securities law compliance. If a jurisdiction treats equity compensation as the issuance of securities, it will trigger registration requirements or, at a minimum, the need to qualify for an exemption.

In the United States, for example, Rule 701 under the Securities Act of 1933 provides an exemption for equity issued to employees, consultants, and advisors under a compensatory arrangement. But this exemption does not automatically extend to employees located in other countries. Each jurisdiction has its own securities regulator, exemptions, and disclosure thresholds.

Another example would be the Prospectus Regulations of the European Union (EU). If the total value of securities being offered crosses €12 million (or €5 million in some member countries), you must provide a prospectus approved by a relevant competent authority. However, there’s an exception for securities being offered to former directors and employees by the employer or an affiliated undertaking.

This exception applies as long as you disclose the number and nature of securities being offered and your reasons for doing so, along with other details, in a simple document.

So, before you extend an equity offer to a remote employee in a new country, you must verify whether that country requires a local securities filing, whether any exemptions are available, and what kinds of reporting obligations will apply.

Using Cap Table Software to Bridge the Equity Communication Gap

A major risk of issuing equity compensation in remote teams spread across different tax jurisdictions is communication gaps. Employees may become disillusioned or disgruntled if the value or timeline of equity compensation does not match their expectations. So, in addition to being completely transparent from the get-go, you must also develop a dashboard for tracking equity compensation.

This dashboard should provide information about vesting schedules, options available for exercise, and information critical for tax filings. Additionally, it should be equipped with tools for tax calculations and equity compensation value tracking.

Eqvista’s cap table management software can form a key part of this dashboard. Our platform enables you to provide limited viewing access to employees so they can track their equity without risking the leakage of sensitive information about other shareholders.

Another key benefit of choosing Eqvista is the Real-Time Company Valuation®. Private companies often struggle to communicate the current value of their equity compensation because they lack a quoted, real-time share price. Eqvista fills this gap through an AI-enabled software crafted by leading valuation experts and data scientists.

Eqvista – Your Partner in Managing Equity Without Borders!

Issuing equity to a global remote workforce is one of the most powerful levers a company has for attracting and retaining exceptional talent. But it demands the same level of rigor you would apply to any cross-border financial arrangement.

You will need to design tax-optimized equity compensation plans for each jurisdiction, navigate EOR arrangements and securities compliance requirements, and keep employees genuinely informed about the value of their equity.

Eqvista is built for exactly this challenge. Whether you are issuing your first options to an overseas hire or scaling equity programs across dozens of countries, our platform provides the infrastructure, real-time valuation tools, and clarity to do it right.

Contact us today to take the complexity out of global equity management!