So will the government’s proposal for new employee options for startups – Breakit (press release)

on Sunday, the government presented its proposal for new rules on employee stock options in an op-ed in Today’s industry. This is what transpires.

• the Government wants to introduce more favourable rules for employee stock options. But the relief shall be limited to a certain type of companies: Those with fewer than 50 employees that do not have been in existence for more than ten years, and which has a turnover of less than sek 80 million.
  
• The new stock options will be taxed as capital when they are sold. Today is taxed stock options as salary at the moment they are released. The proposal also means that the employer therefore does not need to pay the employer’s contribution for the new type of options.
  

One reason for this reduction is that it should be easier for startups to attract employees. The ministers (minister of finance Magdalena Andersson, the financial markets Per Bolund and minister for enterprise, Mikael Damberg) writes the following in the article:

"A challenge that these small, innovative and fast-growing companies face is access to adequate capital and may as a consequence of it difficult to pay competitive wages”, they write, and continue:

"It is not obvious to a skilled technician to provide a safe and well-paid job at an established large enterprise for a risky but exciting journey, many times at a lower salary."

They also believe that they, at several points, has listened to the criticisms raised against the investigation during the consultation. Therefore, they have extended the time when a company is counted as the start-up from seven to ten years and also made it possible for the employees who are shareholders in a company to take part of the options.

how to write the ministers about the criticisms levelled against the limitations of the proposal:

"There are those who argue that the commission’s proposal is too narrow in its design, that the government should look at a completely new proposal for the taxation of employee stock options. It would be unfortunate, because it would then take several years before a change can be on the spot."

the Government also considers that the need for more favourable stock options is greatest at the smaller companies.

"employee stock options, to be used in the early stages of balancing the risk that an employee takes when she or he goes into a young innovative company. Medium-sized enterprises have normally already undergone its first, the more risky period of growth," write the ministers.

the Proposal, or Swedish, is presented in its entirety at the beginning of next week. The new law is proposed to enter into force on 1 January 2018 (if it goes through parliament, would say).