Global equity compensation regulatory updates: 2025/2026

China

Regulatory update: Foreign exchange

To run an employee share plan in China, companies must first get approval from a Chinese regulator (SAFE) and meet compliance requirements, including requiring leavers to sell their shares and transfer proceeds into China within six months.

In 2025, some SAFE offices began allowing former employees to sell shares after six months, as long as proceeds are transferred to China within six months of sale. China remains a complex market for share plans

Czech Republic

Tax update: Tax deferral

In 2024, the Czech Republic introduced a tax deferral regime for employee share plans, shifting taxation from vesting/exercise/purchase to a later event, like share sale or employment termination. This created admin challenges for employers around the tracking and withholding tax. As of April 2025 this is now optional, requiring employers to notify tax authorities if they wish to defer. The regime now also defers social security as well as income tax.

Israel

Tax update: Tax reporting

From January 2025, new rules require a detailed questionnaire be submitted to the Israel Tax Authority as part of the s.102 tax application for employee share plans. A new filing system means employers must now submit reports 1) quarterly (form 146) and 2) annually (form 156) using the online system. Companies need to set up processes to ensure this ongoing reporting is completed.

Japan

Regulatory update: Securities laws

Japan is known for its complex securities rules, with multiple types of exemptions available, each with its own eligibility and reporting requirements.

In 2025, a new, simpler exemption was introduced for companies offering shares to employees. Most companies can now use this exemption, which has made operating share plans in Japan much easier.

Philippines

Regulatory update: Securities laws

In order to ensure they don’t need to produce a prospectus when offering shares to employees, companies must apply to the Securities and Exchange Commission (SEC) for a Confirmation of Exemption.

In 2025 the SEC tightened the requirements with 1) additional information needed in new applications and 2) additional participant details required in the annual reports due each January.

Singapore

Tax update: Tax deduction

Recharge/chargeback arrangements allow companies to seek to reduce the tax liabilities of their employee share plans. Singapore has historically only allowed such deductions in relation to treasury shares, but from September 2025 new guidance from the Inland Revenue Authority of Singapore (IRAS) shows that they will now allow deductions for newly issued shares. Additional clarification is expected from IRAS.

UK

Regulatory update: Trading

The UK launched PISCES (Private Intermittent Securities and Capital Exchange System), a new trading platform for shares in private companies. PISCES enables trading of unlisted shares and offers other benefits, including a new method for employees to realize share value, obtain Stamp Duty and Stamp Duty Reserve Tax exemptions, and serves as an exercise trigger for EMI (Enterprise Management Incentive) and CSOP (Company Share Option Plan) regimes. The initial phase allows for feedback and runs from June 2025 to June 2030, before potential permanent legislation.

Vietnam

Regulatory update: Foreign exchange

Vietnam relaxed Employee Stock Ownership Plan (ESOP) regulations as of 12 August 2024, removing the need for State Bank of Vietnam (SBVN) approval and reducing administrative burdens. Some restrictions remain: share awards must be free or preferential, and no funds can be sent abroad to acquire shares. Each plan must be carefully reviewed for compliance, and monthly reporting to the SBVN is now required.

Belgium

Coming in 2026: Tax

Currently Belgium does not tax capital gains on share sales if considered as part of normal private estate management. In most cases selling shares acquired through an employee share plan will qualify for this exemption. From 1 January 2026, a 10% capital gains tax will apply to Belgian residents selling shares from employee share plans and other assets.

UK

Coming in 2026: Securities laws

From 19 January 2026 there will be new rules in the UK called the Public Offers and Admissions to Trading Regulations (POATR) that affect how companies can offer shares through share plans. If a company wants to run a share plan, where employees or directors can get company shares, it must make sure it follows these new rules or check if it qualifies for an exemption under POATR, which means it doesn’t have to follow the usual requirements.