⚠️  The tax information below is an extremely brief summary for standard situations of the referred relationship, and each situation may of course be different from the norm and have its own specificities. ⚠️

A more comprehensive set of information for this country and work relationship is available on Easop.

If you’re looking for more detailed information in this country (or if you are just curious about our global compliance offering and pricing), get in touch with us and we’ll tell you more about it! 💡

You can definitely grant non-qualified stock options (NSO) to local residents working as contractors in Andorra.

Note that granting stock options to contractors could increase the misclassification risk (i.e. the contractor relationship being requalified as an employer-employee relationship, with all tax consequences that can go with it). This will never be the only factor though, what counts primarily for determining the degree of misclassification risk are factors relating to the modalities of the services performed (control over the contractor’s work, exclusivity, term of the services, etc.).

In a nutshell, what does taxation look like?

In a nutshell, taxation for the grantee would look like:

• At grant 👉 No taxes would be payable at the time of grant.
  
  
• At exercise 👉 The grantee will have to report a gain equal to the difference between the fair market value (FMV) of the shares and the strike price, and pay taxes on it.
  
  
• At sale 👉 The grantee won’t normally have to pay taxes.