EU Tax: European Commission Suggests Loosening of European Union Prospectus Directive Requirements

The European Union suggested a change in the European Union Prospectus Directive requirements, which will make it less troublesome for companies with shares unlisted in the European Union offering employee share plans to their employees in Europe.

A business willing to offer shares to their employees in Europe must prepare a quite detailed prospectus (showing financial status of the company, as well as planned changes and forecasts about the company), according to The European Union Prospectus Directive (EUPD). This is a troublesome, expensive and time-consuming process for companies.

Currently an exemption exists for companies who are wishing to offer securities to their employees, is below conditions are met:

- The company has securities trading on a European Union market
- They prepare an info document which contains information about the securities.

Info document above is a much shorter document then the normal prospectus, saving companies money and time.

At this point, the European Commission announced some recommendations about European Union Prospectus Directive Requirements. When implemented, those changes will make offering share plans to their European employees simpler for businesses with shares not currently listed in the European Union. The European Commission recommended loosening the requirements of the directive to a point so that  all companies can benefit from the current employee share plans exemption, without looking at if the company is listed on a European Union market or not. This change will allow all international companies to offer equity awards to their workers with less requirements told in the previous paragraph.

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