Grants of Overseas Parent Company Stock – A Sweet and Sour Perk

This nice piece by Nishimura & Asahi discusses the nuances of issuing stock options to employees based in Japan.

”While the offering of stock options by overseas parent companies to Japan-based employees can be made without great difficulty under Japanese securities laws (though there are traps for the unwary, which this newsletter discusses), the employer and stock option recipient should carefully consider the potentially debilitating tax consequences that the option recipient may face upon the exercise of grants.

Overseas companies doing business in Japan may wish to pay close attention to Japanese securities laws matters to avoid costly mistakes, and inform stock option recipients about Japanese income tax consequences to avoid possible economic panic upon exercise and potential negative publicity if local taxes are avoided.”

The Board Director Training Institute (BDTI) is a "public interest" nonprofit in Japan dedicated to training about directorship, corporate governance, and related management techniques. It is certified by the Japanese government to conduct these activities as a regulated nonprofit. Read a summary about BDTI here, and see a menu of its services for both corporations and investors here.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.