ESOP (incentive programs for employees in venture capital companies)

We provide comprehensive advice on the design, preparation, and implementation of stock option plans, taking into account the interests of both the employer and the employees or B2B partners. We develop regulations, option agreements, internal documentation, and guidelines for the acquisition, exercise, and possible sale of rights. We also support clients in adapting the program model to the requirements of capital companies, joint-stock companies, and limited liability companies.

We also advise on the tax consequences of the plan, both in terms of personal income tax (PIT) and in the context of income on the part of the participant and costs on the part of the employer. We make sure that the program is not only attractive and motivating, but also legally secure and tax-optimized.

We have supported dozens of Polish and international startups and venture capital funds in designing and implementing ESOP programs. We have participated in the preparation of documentation for companies at an early stage of development, as well as for companies entering the expansion phase or preparing for an investment transaction. Our experience includes share option programs for limited liability companies and shares in joint-stock companies and simple joint-stock companies.

We cooperate with tax advisors and HR departments, which allows us to take a comprehensive approach to the plan – from regulations, through settlements, to implementation in the HR and payroll system. We are flexible and adapt to the pace and style of work of technology companies and VC funds. We know how important agility is in the fast-paced startup environment and how important it is to properly include options in investment agreements.

A properly implemented ESOP is not only a motivational tool—it is also a competitive advantage in the labor market. However, its structure requires an understanding of the specifics of how startups and venture capital funds operate, as well as company law, labor law, and taxation. By working with KWKR, you gain a partner who will help you build a program that truly engages your team while being resilient to legal and tax risks.

We know how to design effective option acquisition models, how to avoid mistakes related to the timing of revenue recognition or taxation of share sales, and how to ensure the transparency of the program in relations with partners and investors. We support not only employers, but also program participants, helping them understand how options work and their tax implications. Our advice takes into account the latest positions of tax authorities and market practice.

ESOPs can take various forms, ranging from simple regulations, through option agreements providing for the gradual acquisition of rights by the employee (vesting), to complex investment models embedded in a VC fund’s strategy. From the perspective of labor law, it is important to precisely define the relationship with the employee or B2B collaborator, as well as to anticipate the consequences of termination of cooperation. From a tax perspective, the key issues are: the moment of taxation of income, the possibility of taking advantage of preferences, and securing appropriate provisions in internal documents and agreements.

There is no one-size-fits-all ESOP model – its effectiveness depends on how well it is tailored to the organizational structure, stage of development of the startup, and expectations of the team. That is why the law firm’s advice should accompany the program from the very beginning – from the analysis of needs, through the preparation of documents, to ongoing support and possible modifications of the plan during its operation.