Allowed if the subsidiary reimburses the parent under a written agreement.
However, subject to exchange control approval (which is unlikely).
Income Tax:
Yes. Local subsidiary must obtain directive from South African Revenue Service to determine appropriate withholding amount prior to withholding for each taxable event.
Social Insurance Contributions:
Yes, for both the employee and employer unless ceiling met. Employer has to withhold employee's contributions.
Employer also must pay uncapped skills development levy on income.
Prospectus requirements apply.
A "small offering" exemption from prospectus requirements is available for companies making a single offering to 50 or fewer persons in a 12-month period with a value equal to or less than ZAR 1 million. To rely on the exemption, the offer must be finalized within 6 months.
Alternatively, an employee share scheme exemption from prospectus requirements is available, provided certain requirements are met, including appointing a "compliance officer," providing certain written disclosures to employees and filing certain "registration" documents and an annual report with the South African Companies and Intellectual Property Commission.
Please contact Baker McKenzie for more information.
Plan must be placed on record with Financial Surveillance Department.
Employees must complete certain other steps to remit funds out of South Africa to exercise options. ZAR 1 million annual discretionary allowance and an additional ZAR 10 million annual offshore investment limit applies to employees. The local subsidiary has to obtain approval for reimbursement payment.