ESOP - Analysis of Employee Option Programs in Czechia

Incentive programs for employees or key coworkers (ESOPs) are a big topic that we deal with almost on a daily basis in our legal practice. For the vast majority of technology-driven companies, ESOPs are a major tool to attract talented employees, accelerate their growth in a fundamental way, and remain competitive on a global level. However, in our opinion, a major obstacle in the Czech Republic is the legislation that triggers tax liability already at the moment of option exercise (acquisition of shares by an employee).

The aim of this publication is to summarize the current options in the setting of ESOPs in the Czech Republic and to show how incentive schemes are treated in the legal systems of neighbouring countries. The publication concludes with a proposal for legislative change in the Czech Republic, which could make our country more competitive in the digital economy. We would be happy to share it and to have a follow-up discussion among professionals and the general public on the necessary legislative changes.

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