Equity · Equity contracts

How to give equity to non-US employees?

Matthew Campbell General Purpose GO Hacker at DigitalOcean

February 6th, 2015

I have a few really good developers that are in Thailand(not interested in a debate about outsourcing). For various legal reasons my company in Thailand is more of a shell and all the IP and ownership is in a US C Corp. Can I easily give options to non US employees that don't work for the US Company? They work for the shell company in Thailand, owned by the US company. Any implications for them?
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David Lichtblau Chief Executive Officer

February 7th, 2015

I'm not a lawyer so you shouldn't take this as legitimate advice. But I don't know of any legal issue with offering options in a U.S. C corp to non-U.S. citizens, and my company has done it for a U.S. LLC without our lawyers raising any flags. 

If they exercise their options (become shareholders) and the company someday issues dividends to its shareholders, then there may be some small logistical issues. For example, the company might have an easier time in the event of an IRS audit if all foreign shareholders have U.S. taxpayer IDs so you can report the dividends (and withhold taxes) that way.  

Aji Abraham

July 22nd, 2015

I am in a similar boat with a US company and a company in India. This is what I got from my research. If it is a C corp you issue shares or options to foreign nationals. But not if you have a S corp. But the main hurdle is in India as they have to file taxes on the share grant as well as share sales. You might want to check if it is similar in Thailand.