A Dutch BV can share value with its team in four ways: share options (the right to buy shares later), SARs (a cash bonus tracking share value), depositary receipts via a STAK (economic upside without votes), and direct shares. Options and SARs are taxed as wage income; a STAK keeps founder control; direct shares are the heaviest. This page is general information, not advice on which to choose.
Why equity is harder in a BV than people expect
Founders arriving from US or UK startup culture expect to hand out stock options on a spreadsheet. A Dutch BV does not work quite like that. Shares in a besloten vennootschap are registered, not freely tradeable, and every transfer of real shares must pass through a Dutch civil-law notary (notaris) by deed. That single fact, the notarial requirement, shapes every equity decision: anything that creates or moves actual shares is slower and more expensive than its Anglo-American equivalent.
The second complication is tax. Employee equity is, in the eyes of the Belastingdienst, a form of pay. So unless it is structured carefully, the value handed over is taxed as wage income in Box 1 at progressive rates, the same bracket as salary, which can run up to roughly 49.5% (verify the current rate before relying on it). The art is in choosing the instrument whose taxable moment, and whose control consequences, suit your stage.
If you haven't yet formed the company that will issue this equity, start with our Dutch BV formation service (from €1,295 ex VAT, notary and KVK fees included) or read our guide for non-EU founders first.
The four mechanisms at a glance
There are four practical routes. The right one depends on whether you are willing to let employees become real shareholders, how much control you want to keep, and how much administrative weight you can carry.
| Mechanism | Real shares? | Voting rights? | Admin weight |
|---|---|---|---|
| 1. Share options (ESOP) | On exercise | After exercise | Medium |
| 2. SARs (phantom) | No | No | Light |
| 3. STAK receipts | Held by STAK | No (kept by STAK) | Medium |
| 4. Direct shares | Yes | Yes | Heavy |
1. Share options (the classic ESOP)
A share option grants an employee the right, but not the obligation, to buy shares in the BV at a fixed price (the strike) at a later date, usually after a vesting period. It is the instrument most founders mean when they say "give the team some equity". Until the option is exercised, the employee holds only a right, not a share, so there is no notarial deed and no shareholder on the cap table yet.
Tax treatment. This is where the Netherlands changed materially. Until 2023 the taxable moment was exercise: when the employee bought the shares, the difference between fair value and strike was taxed as wage income, often before the employee had any cash to pay the bill. From 2023 the default taxable moment shifted to when the shares become tradeable (broadly, when they can actually be sold or are no longer subject to a transfer restriction), with an option to elect to remain taxed at exercise. The aim was to stop employees of illiquid startups being taxed on paper gains they could not realise. Either way the gain is Box 1 wage income, so it runs through payroll. The timing rules have moved more than once, so verify the current position before you grant.
- Best for: standard startup pools where you want a conventional option scheme the team will recognise.
- Watch out for: the taxable-moment rules, valuation of the strike price, and the fact that exercising employees do become real shareholders (with the notary and voting consequences that brings) unless you route exercise through a STAK.
2. SARs, the phantom-equity route
A stock appreciation right (SAR) is the simplest instrument of the four because it never touches the cap table at all. A SAR is a contractual promise to pay the employee a cash bonus equal to the increase in the company's share value over a reference price, measured at a defined event (a sale, a funding round, or a fixed date). The employee never owns a share, never votes, and never appears at the notary. It is "phantom" equity: it tracks the upside without granting any of the legal rights of ownership.
Tax treatment. Because a SAR is, in substance, a deferred cash bonus, it is taxed as ordinary wage income in Box 1 when it pays out, withheld through payroll like any salary. There is no separate capital-gains regime to navigate and no participation-exemption question, because nothing is a shareholding. That simplicity is the whole appeal.
- Best for: founders who want to reward people without diluting the share register or letting outsiders into shareholder meetings; remote or non-resident hires where issuing real shares would be a treaty headache; and small teams that cannot justify the admin of a real option plan.
- Watch out for: SARs are a real cash liability for the company at payout, so model the cash impact of a successful exit. They also do not give employees the genuine "owner" feeling that real equity does, which can matter for senior recruits.
3. Depositary receipts via a STAK
The STAK is the most distinctively Dutch answer, and a common choice for growing companies. A STAK (stichting administratiekantoor, an "administration office foundation") is a foundation that holds the legal title to a block of the BV's shares. In exchange it issues depositary receipts (certificaten) to the participants. The receipt-holder gets the economic rights, dividends and the proceeds on a sale, while the STAK keeps the voting rights. This is the trick: it splits ownership from control.
For a founder this is powerful. You can hand economic upside to dozens of employees through receipts, while the STAK, which you typically control as its director, votes the underlying shares as a single bloc. Your cap table at the BV stays clean (the STAK is one line), employees do not sit in shareholder meetings, and you avoid a fragmented register full of small minority holders with statutory information rights.
Tax treatment. Certified shares are generally treated, for tax, much like the underlying shares: a receipt that represents a genuine ≥5% economic interest can fall within the same regime as a substantial holding, and the participation exemption can apply at the level of a corporate holder of receipts where the conditions are met. Where receipts are awarded to employees below fair value, the discount is again wage income. The mechanics deserve their own treatment, see the dedicated STAK and depositary receipts guide for how certification, the foundation's administration conditions, and voting work in practice.
- Best for: scale-ups widening equity to a larger team, multi-founder companies that want a single voting bloc, and family or succession setups where control must stay concentrated.
- Watch out for: a STAK is a real legal entity with its own administration conditions and a board; it adds a layer to maintain. It pairs naturally with a personal holding company, so it is worth deciding alongside your overall structure.
4. Direct shares
The bluntest route is simply to issue or transfer real shares to the employee. They become a full shareholder: economic rights, voting rights, statutory information rights, and a seat at the shareholder meeting. There is no derivative, no foundation and no phantom instrument, just ownership.
Tax treatment. If the shares are acquired below fair value, the discount is taxed immediately as wage income in Box 1, on the spot, with no deferral of the kind options now enjoy. Thereafter the employee, as a shareholder, sits in the normal regime: a holding below 5% is taxed in Box 3 (the savings-and-investments box), while a ≥5% holding becomes a substantial interest taxed in Box 2 on dividends and gains (verify the current Box 2 and Box 3 rates and bands, which are reviewed and indexed regularly).
- Best for: a small number of senior co-founders or key hires you genuinely want as part-owners, and where you accept giving up some control.
- Watch out for: every issue or transfer needs a notary, so it is the most expensive to administer; minority shareholders are hard to remove later; and a crowded register complicates a future raise or sale. Many founders reserve direct shares for the inner circle and use a STAK or options for everyone else. See the holding-structure guide for how this interacts with a personal holding company.
Which mechanism fits your stage
There is no single best answer; the choice is a trade-off between control, cost and the "feel" of real ownership. As a working guide:
| If you want to... | Reach for |
|---|---|
| Reward people with zero dilution or admin | SARs |
| Run a recognisable startup option pool | Share options |
| Share upside widely but keep voting control | STAK receipts |
| Bring in a true co-owner | Direct shares |
In practice many BVs combine instruments: direct shares for the founding team, a STAK to hold an option or receipt pool for the wider staff, and SARs for advisers or contractors where no register entry is wanted at all. The structure you build at formation, in particular whether you also set up a personal holding company, shapes which of these is clean to run, which is why it's worth planning equity at the same time as the company.
Non-resident employees
If the people you are rewarding live and work outside the Netherlands, the tax position gets more involved. Where an employee performs their work abroad, a tax treaty can allocate part of the equity gain to their country of residence, and the apportionment commonly follows the period they worked in the Netherlands across the vesting window. Cross-border equity draws close attention from tax authorities, so the timing of grant, vest and the tradeable/exercise moment all matter.
For non-resident hires, SARs are often the path of least resistance: a cash bonus is simpler to allocate across jurisdictions than a shareholding, and it keeps the Dutch register untouched. But the right answer depends on where the value is being created and where the people sit. This is a documentation-heavy area, so take advice before you grant rather than after. If you, the founder, are based outside the EU, our guide for non-EU founders covers the wider position.
This guide is general information, not tax or legal advice. Rules and rates change; check the current position and get advice on your own situation before acting.
FAQ
Since the 2023 reform, the default taxable moment for an employee share option is when the shares become tradeable rather than at exercise, with an election to stay taxed at exercise. Either way the gain is wage income in Box 1 at progressive rates. Confirm the current rule before granting, as the timing rules have moved.
A share option gives the employee the right to buy real shares. A SAR (stock appreciation right) is purely a cash bonus that tracks the rise in share value, the employee never becomes a shareholder. SARs are simpler to administer and are taxed as ordinary wage income when they pay out.
A STAK (stichting administratiekantoor) is a foundation that holds the legal shares and issues depositary receipts (certificaten) to participants. The receipts carry the economic value but not the voting rights, so founders keep control while sharing upside. See our STAK guide for the mechanics.
Yes, but it is the heaviest option: each transfer needs a Dutch civil-law notary, the employee gains voting and information rights, and any discount to fair value is taxed as wage income immediately. Many founders reserve direct shares for senior co-founders, not the broad team.
They can. Where an employee works abroad, a tax treaty may allocate part of the equity gain to their country of residence, and the split often follows the period worked in the Netherlands during vesting. This is a documentation-heavy area, take advice before granting cross-border.
No. We coordinate the formation of your Dutch BV; we don't draft equity plans ourselves. Share option agreements, SAR contracts, STAK terms or share transfers are drafted by a notary or a specialist adviser. If you're forming your BV with us and already know you'll want an equity plan, mention it early so the notary can take it into account when drafting the articles.