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Granting equity in 

the 

Mexico

 

Get to know everything about your taxation and reporting obligations in 

the 

Mexico

Introduction

⚠️  The tax information below is an extremely brief summary for standard situations of the referred relationship, and each situation may of course be different from the norm and have its own specificities. ⚠️

A more comprehensive set of information for this country and work relationship is available on Easop.

If you’re looking for more detailed information in this country (or if you are just curious about our global compliance offering and pricing), get in touch with us and we’ll tell you more about it! 💡

Regular employee

Employee via EoR

✅ Yes, you can grant non-qualified stock-options (NSO) to EoR employees in Mexico.

In a nutshell, what does taxation look like?

  • At grant 👉 No taxation at grant.

  • At exercise 👉 The spread (i.e. the difference between the fair market value (FMV) of the shares at the time of exercise and the exercise price) will be subject to the local income.

  • At sale 👉 The difference between the sale price and the fair market value of the shares at the time of exercise will be subject to the local income.
Early exercise would probably barely help as the applicable progressive tax rates are the same at exercise and sale.

Contractor

✅ Yes, you can grant non-qualified stock-options (NSO) to contractors in Mexico.

Note that granting stock options to contractors could increase the misclassification risk (i.e. the contractor relationship being requalified as an employer-employee relationship, with all tax consequences that can go with it). This will never be the only factor though, what counts primarily for determining the degree of misclassification risk are factors relating to the modalities of the services performed (control over the contractor’s work, exclusivity, term of the services, etc.).

In a nutshell, what does taxation look like?

  • At grant 👉 No taxation at grant.

  • At exercise 👉 The spread (i.e. the difference between the fair market value (FMV) of the shares at the time of exercise and the exercise price) will be subject to the local income.

  • At sale 👉 The difference between the sale price and the fair market value of the shares at the time of exercise will be subject to the local income.
Early exercise would probably barely help as the applicable progressive tax rates are the same at exercise and sale.

Want to know more about equity in 

the 

Mexico

?

Discover everything you need to know about taxation and reporting obligations for you and your team in 

the 

Mexico

Get in touch