Introduction
Regular employee
NSO
You can grant non-qualified stock options (NSO) to local employees in Portugal.
- There’s a return to file when the stock options are granted and a register of option holders to be kept up-to-date.
- There will be no taxes at the time of grant, only at the time of exercise of the stock options (taxed as professional income) and sale of the shares (taxed as capital gain).
- There are some tax advantages that are applicable under certain conditions.
Employee via EoR
NSO
You can grant non-qualified stock options (NSO) to local EoR employees in Portugal.
- There’s a return to file when the stock options are granted and a register of option holders to be kept up-to-date (the EoR should help).
- There will be no taxes at the time of grant, only at the time of exercise of the stock options (taxed as professional income) and sale of the shares (taxed as capital gain).
- There’s no tax favored schemes nor particular tax advantages available when the grantee is an EoR employee.
Contractor
NSO
You can grant non-qualified stock options (NSO) to local contractors in Portugal.
- When the stock options are granted to a contractor, it could theoretically increase the risk of requalification of the relationship into an employment relationship (meaning more taxes and payments, such as severance pay). However, the fact that stock options are granted to a contractor is not as such a decisive element for that requalification.
- The company won’t legally have to do anything vis-à-vis the local authorities as it will be the grantee’s responsibility to report the taxable gains and pay the taxes.
- Portugal is currently evaluating new laws around startups, but chances are (so far) low that it will significantly impact grants to contractors.
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