Extending Stock Incentives to Chinese Employees

Extending Stock Incentives to Chinese Employees

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Many multinational companies with operations in China recognize the benefit of extending their stock incentive plans to employees of their subsidiaries in China. Doing so requires that they register the plan with the State Administration of Foreign Exchange (SAFE) under the Operating Procedures for the Administration of Participation by Domestic Individuals in Employee Stock Ownership Plans and Stock Option Plans of Overseas Listed Companies. The regulations impose a registration obligation on listed or public multinationals, but lack clear guidance on the registration obligation of non-public companies. For more on these regulations, see our recent Email Alert.

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