Introduction
Direct employees
Can receive NSO?
✅ Yes!
General taxation
At the time of exercise, the grantee will pay taxes on the spread (i.e. the difference between the fair market value of the shares at the time of exercise and the exercise price), which will be taxed as any employment income (at progressive income tax rates, ranging from 7 to 24%).
Any increase in value of the shares between the time of exercise of the stock options and the time of sale of the shares will be taxed as capital gain at a rate of 10%.
General tax, reporting & legal paperwork difficulty score
🤯 🤯 🤯
Warning point
It might be difficult in Nigeria to wire the funds required for paying the exercise price because the Central Bank of Nigeria (“CBN”) has placed a ban on the purchase of foreign currency (USD included) to acquire shares of a foreign company. As a consequence, the grantee might be unable to send money abroad (to the US) to exercise the stock options.
EoR employees
Can receive NSO?
✅ Yes!
General taxation
At the time of exercise, the grantee will likely have to pay taxes on the spread, which will be taxed as any professional income (at progressive income tax rates, ranging from 7 to 24%).
Any increase in value of the shares between the time of exercise of the stock options and the time of sale of the shares is likely taxed as capital gain at a rate of 10%.
General tax, reporting & legal paperwork difficulty score
🤯 🤯 🤯
Warning point
It might be difficult in Nigeria to wire the funds required for paying the exercise price because the Central Bank of Nigeria (“CBN”) has placed a ban on the purchase of foreign currency (USD included) to acquire shares of a foreign company. As a consequence, the grantee might be unable to send money abroad (to the US) to exercise the stock options.
Contractors
Can receive NSO?
✅ Yes!
General taxation
At the time of exercise, the grantee will likely have to pay taxes on the spread, which will be taxed as any professional income (at progressive income tax rates, ranging from 7 to 24%).
Any increase in value of the shares between the time of exercise of the stock options and the time of sale of the shares is likely taxed as capital gain at a rate of 10%.
General tax, reporting & legal paperwork difficulty score
🤯 🤯 🤯
Warning point
It might be difficult in Nigeria to wire the funds required for paying the exercise price because the Central Bank of Nigeria (“CBN”) has placed a ban on the purchase of foreign currency (USD included) to acquire shares of a foreign company. As a consequence, the grantee might be unable to send money abroad (to the US) to exercise the stock options.
Want to know more about equity in
the
Nigeria 🇳🇬
?
Discover everything you need to know about taxation and reporting obligations for you and your team in
the
Nigeria 🇳🇬