Can an overseas employee participate in an incentive plan?
There are no prohibitions on extending US incentive plans to overseas employees, but there are limitations and restrictions that must be observed.
The terms of the US plan must provide that it can be extended to overseas employees. Typically, those employees will be employed by a separate entity. With some plan designs it may be necessary for the US board of directors to authorize the extension of the plan to those foreign subsidiaries. Many US plans authorize the creation of “sub-plans” to facilitate overseas awards and allow the main plan rules to be varied to comply with local laws.
Obviously, US companies must comply with the securities and prospectus laws, tax laws, data protection laws, currency exchange requirements and labor/employment laws of foreign countries.
Given that there is no limitation in Mexico for incentive plans, an overseas employee may participate, however this is not a common practice.
Strictly from a Romanian employment law standpoint, there are no special prohibitions or limitations between local and overseas employees for participating in an incentive plan. However, from a practical perspective, considering the relevant tax implications is key when taking this decision.
In practice there are situations when incentive plans are implemented by multinational groups of companies for worldwide employees. Such scenarios are - in principle - also covered by the Romanian tax legislation, but the specifics of each scheme needs to be analysed so as to determine the local tax implications.
Yes, overseas employees can participate in an incentive plan.
Yes. See question 17.