There are two primary considerations. The first is when you get taxed: is it only at the point of sale (i.e. when you are able to liquidate your shares)? Is there an additional tax to pay when exercising stock options or when shares vest? Or, are you going to be taxed immediately when stock options or shares are granted? A worst-case scenario is that employees are taxed at their full income tax rate twice: first when exercising their stock options (or, in the case of restricted stock units, when they vest), and again when they come to sell them. In the first instance, tax applies to the difference between the strike price and the current market value of the stocks. As no liquid assets are received by the employee, it is referred to as dry income tax. [...] To get around this, startups in Germany have instead been offering virtual stock options. These are not “real“ shares but legally binding contracts that promise employees the cash benefit of their virtual shares during any liquidity event, such as an exit. As a result, employees are only taxed at sale as income tax, plus any additional contributions. According to the Index Ventures ranking, the most tax-favourable European countries for stock options and equity are the Baltic states: Latvia, Estonia and Lithuania. In these countries, where startups such as Printify, Wise and Vinted were founded, employee taxation is almost always deferred to the point of sale and is generally no more than 20%. This applies to all private companies, no matter the size. Unverified source (2023)