Yes, provided subsidiary bears the cost of award.
Written agreement recommended.
Income Tax:
Yes, employer is required to withhold and report income tax assuming the award is paid through local payroll.
Social Insurance Contributions:
Yes, employee and employer social insurance contributions will be due.
Employee portion is subject to monthly contribution ceiling while employer portion is uncapped. The employer must withhold the employee portion, if applicable.
Significant likelihood of vested rights/entitlement claims with cash awards.
Cash award with performance vesting conditions (based on employee's performance) creates an even greater risk.
Employees should sign specific labor disclaimer and compliance language.
Under data protection legislation adopted in 2020, a valid basis (e.g., necessity for performance of a contract) is needed for the collection, use, storage, and processing of personal data as well as the transfer of personal data out of Brazil. Accordingly, companies should review their approach to data privacy compliance in the context of equity plan administration and consider on which basis they may be able to rely to collect, process and transfer data.