Hello offshore guys,
Question: I am wondering which offshore structure I can use if I want to give away shares of my company to new/future employees.
In summary: A company [X] wants to give its employees a stake/share in the company, but it is very complicated and costly to do it in the country where my business entity is setup (continental EU).
Story: The side project I have “bootstrapped” and stared few months ago, showed interesting growth potential but at the same time it will require more people to join me on the board (I want to pay my future partners/co-workers with the shares of the company [X]). On the long term I want to have a CEO and a fully operational independent business so I can focus on other ventures.
The problem is that in my home country where company [X] is currently registered there isn’t any legal framework for so called “employee stock options programs” or anything similar. Besides that, giving employees any shares can be negatively impacted because of the implemented national tax laws (income tax), not to mention, that the process of giving employees any shares in the company is terribly complicated as well.
I realized that government consider giving/selling shares of the company as an income and if you do not pay income tax, you can be fined for a tax evasion. I am currently planning to give away 10-20% of the company to employees and look for a framework how to do it.
Idea: I was thinking to setup an offshore entity [Y] in Seychelles. Issue [Z] amount of shares (I think I will have the least hustle and bustle with accountants in Seychelles), then register some IP (intellectual property) assets on my offshore entity’s name. Afterwards offshore company [Y] will “re-capitalize” main company [X] with the IP assets and substantially become owner of it. As soon as I manage "to close" the ownership relationship I can then easily give away shares of company [Y] which trough this "bypass" represent the shares of the main company [X] and make employees a shareholders and business partners.
Now, I am asking you guys are there any other better idea/solution for this particular case? Should the structure be more complicated, including more layers (maybe a Trust company in between)?
Note: Closing company [X] and moving everything to offshore; Start everything form the beginning is not an option for me at the moment.
Thanks for your contribution and have happy summer !
Question: I am wondering which offshore structure I can use if I want to give away shares of my company to new/future employees.
In summary: A company [X] wants to give its employees a stake/share in the company, but it is very complicated and costly to do it in the country where my business entity is setup (continental EU).
Story: The side project I have “bootstrapped” and stared few months ago, showed interesting growth potential but at the same time it will require more people to join me on the board (I want to pay my future partners/co-workers with the shares of the company [X]). On the long term I want to have a CEO and a fully operational independent business so I can focus on other ventures.
The problem is that in my home country where company [X] is currently registered there isn’t any legal framework for so called “employee stock options programs” or anything similar. Besides that, giving employees any shares can be negatively impacted because of the implemented national tax laws (income tax), not to mention, that the process of giving employees any shares in the company is terribly complicated as well.
I realized that government consider giving/selling shares of the company as an income and if you do not pay income tax, you can be fined for a tax evasion. I am currently planning to give away 10-20% of the company to employees and look for a framework how to do it.
Idea: I was thinking to setup an offshore entity [Y] in Seychelles. Issue [Z] amount of shares (I think I will have the least hustle and bustle with accountants in Seychelles), then register some IP (intellectual property) assets on my offshore entity’s name. Afterwards offshore company [Y] will “re-capitalize” main company [X] with the IP assets and substantially become owner of it. As soon as I manage "to close" the ownership relationship I can then easily give away shares of company [Y] which trough this "bypass" represent the shares of the main company [X] and make employees a shareholders and business partners.
Now, I am asking you guys are there any other better idea/solution for this particular case? Should the structure be more complicated, including more layers (maybe a Trust company in between)?
Note: Closing company [X] and moving everything to offshore; Start everything form the beginning is not an option for me at the moment.
Thanks for your contribution and have happy summer !
