Yes, if reimbursement made by subsidiary to the parent and certain other conditions satisfied.
Exchange control restrictions may impact ability to implement reimbursement arrangement.
Please contact Baker McKenzie for more information.
Income Tax:
Generally, no withholding provided subsidiary does not reimburse parent. Effective 1 January 2024, employer is required to report option income on an annual basis.
Social Insurance Contributions:
Yes, employee and employer social insurance contributions apply. Employer technically required to withhold employee contributions.
Generally, no, as employee exemption should apply.
Korean residents previously could not sell foreign-listed shares through foreign brokers or deposit proceeds abroad, requiring engagement with Korean domestic brokers. However, a recent legislative action promulgated on 5 March 2024 now allows Korean resident employees of multinational companies to dispose of overseas-listed securities without using Korean licensed brokers.
Remittance of funds to purchase shares must be "confirmed" by a Korean foreign exchange bank if funds wired abroad. If intercompany offset used to effect purchase of shares, the local entity must report the intercompany offset to the foreign exchange bank at the time of offset.
Employees may be required to report deposit of proceeds with a value in excess of USD 5,000 into a non-Korean bank account.
Please contact Baker McKenzie for details.
Written disclaimer should be included in grant documents to reduce risk of entitlement. Equity income likely will constitute "wages", particularly if there is reimbursement.
Co-mingling of payroll deductions with general corporate funds is not permitted, so a separate bank account is recommended.