It is increasingly common for multinational corporations
(“MNCs”) to offer equity-based
incentive benefits to employees based in different countries,
including China, to recruit and retain the best talent. To
implement employee incentive plans in China, MNCs must comply with
China's foreign currencies, taxation, and other related laws
and regulations, which remain complicated and challenging.
Last year saw some important changes—some local offices of
the State Administration of Foreign Exchange
(“SAFE”) adopted a more
business-friendly practice for MNCs to register their incentive
plans in China, and the PRC State Taxation Administration
(“STA”) tightened up its income tax
collections in relation to equity incentive plans.
