Expatriation, employee equity

Your start-up is being acquired:
stock options, RSUs, retention grants and leaving France

When a foreign group announces the acquisition of a start-up, its French employees all ask the same question: if I move abroad before closing, what happens to the tax on my options, my shares and my retention package? The answer is less intuitive than it looks. Where you live on payment day matters less than where the work was performed during the vesting period, the French exit tax only reaches shares you actually hold, and the real lever is usually the acquirer's equity promised for the years after closing. This page sets out the mechanics, the legal texts and the order in which the firm handles these matters.

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— In 45 seconds

Options, RSUs, retention: what really changes when you leave

Read the transcript

Your start-up has been acquired. Options, RSUs, a retention bonus. And you are thinking of leaving France.

This is not a capital gain. It is employment income. It is split between countries in proportion to the days worked, from grant to vesting. What you earned while working in France stays French, wherever you live when you are paid. On the French portion, a withholding tax applies.

The exit tax only reaches shares you already hold when you leave. Not unexercised options.

Two unknowns remain, to be settled case by case: how your instruments actually qualify, and the country you move to. Everything is decided before closing.

Captions included. The page below sets out the texts and the method.

I work for a start-up that is being acquired and I am moving abroad: what happens to the tax on my options and RSUs?

Gains from stock options, free shares or RSUs granted in return for employment are employment income, not capital gains. They are taxable in each State where the rewarded work was performed, pro rata to the days of activity during the period running from grant to the date the right vests. Leaving before payment therefore does not erase the French-source share of rights already earned in France.

The French exit tax (article 167 bis of the French Tax Code) only applies to securities held on the day of departure. An unexercised option and an unvested free share are not held securities. Exercising options just before leaving creates exactly the tax base you were trying to avoid.

The real lever is the retention grant in the acquirer's shares, vesting over several years after closing: the fraction attributable to France shrinks with every year genuinely worked from abroad, provided the contract, the employing entity and physical presence follow.

French Tax Code art. 80 bis, 80 quaterdecies, 163 bis G, 167 bis and 182 A ter; BOI-RSA-ES-20-10-20-60; BOI-IR-DOMIC-10-20-20-30. Verified 23 September 2026.

— In brief
Nature of the gain
Employment income (article 15 of the OECD Model), even when cash-settled at closing
Allocation
Pro rata to days of activity per State during the reference period (BOI-RSA-ES-20-10-20-60)
Non-resident
Withholding tax under art. 182 A ter on the French-source share
Exit tax
Art. 167 bis: held securities only, €800,000 threshold, 6 of the last 10 years of residence
Retention
Acquirer's RSUs: every year worked outside France reduces the French share
Timing
Decided before closing, not after payment
— 01

Three misconceptions, and what the texts say

First misconception: "if I am resident abroad at closing, the payout on my options is not taxable in France". In most cases this is wrong. The gain from an option, a free share or an RSU rewards work. The OECD Model treats it as employment income, and French doctrine allocates the gain between States pro rata to the number of days of activity performed in each during the reference period, which runs from grant to the date the right vests for good. An employee who worked in France throughout that period keeps a French-source gain, whatever their residence on payment day. For a non-resident, the employer or paying entity then applies the withholding tax of article 182 A ter.

Second misconception: "my options are BSPCE". That is only true if the plan rules and the issuer's resolutions say so. US cap-table platforms display labels ("option grant", "NSO", "INTL") that describe foreign-law instruments. A foreign company can grant genuine BSPCE, article 163 bis G allows it under its III bis, but only on the conditions set by the text. Until the plan has been read, no favourable regime should be taken for granted.

Third misconception: "the exit tax will hit all my options". No. Article 167 bis targets securities held on the date tax residence is transferred, for taxpayers resident in France for six of the previous ten years, where the overall value exceeds €800,000 or the holding exceeds 50%. An unexercised option and a free share still in its vesting period are not held securities. Shares already received on exercise, however, are included, with an acquisition cost equal to the exercise price plus the exercise gain already taxable as salary.

— 02

Five questions to settle, in this order

1. What instruments do you actually hold?

Everything starts here. BSPCE (art. 163 bis G), qualified options under the French Commercial Code (art. 80 bis), free shares (art. 80 quaterdecies), or foreign-law options and RSUs outside any French statutory framework, known as non-qualified plans: each category has its own taxable event, rate and withholding. The documents that decide are the plan rules, the resolutions of the body that authorised the grant and your grant agreement. A platform screenshot is never enough. The firm starts with this audit, before any computation.

2. A payout at closing is still salary, allocated between States

Where the deal provides that vested options are cashed out and cancelled, or that unvested options are converted into the acquirer's RSUs, the amount received rewards past activity. The reference period runs from grant to the date the right vests for good; the gain is allocated between States pro rata to the days of activity in each, counted on a calendar basis (BOI-RSA-ES-20-10-20-60, § 220). For a non-resident, the French share bears the withholding tax of art. 182 A ter, due on sale for statutory plans and as early as subscription or acquisition of the shares for non-qualified plans.

3. The exit tax only reaches securities held on departure day

Cumulative conditions of art. 167 bis: tax residence in France for six of the ten years before departure, and held securities representing 50% of a company or more than €800,000. The unrealised gain is taxed at the flat rate, social levies included, i.e. 31.4%. Deferral of payment is automatic when moving to an EU Member State or to a State bound to France by both an administrative-assistance and a recovery-assistance agreement; elsewhere it must be requested, with a representative in France and guarantees of 12.8% of the gain. Relief is granted after two years of holding, five years where the value exceeds €2.57 million. Exercising options before departure turns an out-of-scope right into in-scope shares.

4. The retention grant is the real issue

Acquirers often pair the deal with a retention programme in shares, vesting in tranches over several years on condition of staying. It is frequently the largest item, well beyond existing options. Its reference period opens at grant and runs to the definitive vesting of each tranche, extended by any presence condition (BOI-RSA-ES-20-20-20, § 80). Leaving before closing and then genuinely working outside France for several years leaves only a reduced French fraction. Genuinely means: an employment contract with a foreign entity, a position located abroad, days in France counted and limited.

5. The destination changes the mechanics, not the principle

A State with no income tax does not remove the French share of the gain: it only avoids a second layer of tax. Moving within the EU, or to any State bound to France by both an administrative-assistance and a recovery-assistance agreement (non-cooperative jurisdictions excluded), exit tax deferral is automatic; moving to a State without a recovery-assistance agreement, it requires guarantees and a representative. Inbound regimes (impatriate schemes, temporary reduced rates, exemptions) have eligibility conditions assessed locally, and sometimes exclude employees of a group already present there. Finally, the transfer of residence must be genuine: a home kept, a family left in France or a sole-trader business still open are ties the tax authority will hold against you.

— 03

The firm's method

Phase 1, before any decision (three to four weeks). Audit of the plans and of the sale agreement, characterisation of each instrument, then an instruments × departure dates × destinations matrix with the French share computed for each scenario. This is where it is decided whether to leave before or after closing, and whether a partial exercise before departure makes sense.

Phase 2, the year of departure. Final French return with the split of income, exit tax form 2074-ETD where relevant, deferral, representative and guarantees, notification of the new address to the tax authority within two months, evidence file for the change of residence. Coordination with a local correspondent for the inbound regime.

Phase 3, while the retention vests. Annual monitoring of the allocation between States, withholding tax, reporting obligations on both sides, and a check that the reality of the work still matches what was declared.

When several colleagues consult together. It is common, and useful for the shared legal groundwork. But situations diverge quickly: one has already exercised, another has not, retention amounts differ, a third is already resident in another State. The firm then proposes a shared groundwork and individual engagements, each person's figures remaining in their own file, under professional secrecy.

— Frequently asked questions

If I leave before closing, does the payout on my options escape French tax?

No, not for the share that rewards work performed in France. The gain is employment income allocated between States pro rata to days of activity during the reference period, from grant to definitive vesting. If that period was spent in France, the gain is French-source and bears the withholding tax of article 182 A ter, even if you are a non-resident on payment day. The tax treaty with your host State then governs relief from double taxation.

Are my options BSPCE?

Only the plan rules and the issuer's resolution can say. A platform label ("option grant", "NSO", "INTL"), an exercise price in dollars or a cap table kept by the foreign parent point to foreign-law options, outside the BSPCE regime. Article 163 bis G, III bis, admits BSPCE issued by a company established in the EU or in a State bound to France by an administrative-assistance clause, but on the conditions set by the text. Take no favourable regime for granted before reading the documents.

Does the exit tax apply to my unexercised options and my RSUs?

No. Article 167 bis targets rights, securities and shares held on the date of transfer. An unexercised option and a free share whose vesting period is still running are not held securities. Shares already received on exercise are included, however, if the thresholds (€800,000 or 50%) and the residence condition (six years out of ten) are met.

Should I exercise my options before leaving?

Rarely a good idea without a computation. Exercise crystallises the exercise gain, taxable as salary in the year of sale for statutory plans, and brings the shares received into the exit tax base. It also ties up cash, on top of any guarantees to be lodged before moving to a non-EU State. The question belongs in the scenario matrix, never in isolation.

How is a retention grant paid in the acquirer's shares taxed?

As employment income, tranche by tranche, allocated between States pro rata to days of activity during the period from grant to definitive vesting of the tranche, extended by any presence condition. The more vesting years are genuinely worked outside France, the smaller the French share. The employment contract, the employing entity and the actual place of work must be consistent with that outcome.

Dubai, Portugal, Andorra, Switzerland: does the destination change the outcome?

It changes the exit tax deferral (automatic within the EU and in States bound by both assistance agreements, on request and with guarantees elsewhere), whether a local tax exists, and access to any inbound regime. It does not change the principle: the share of the gain that rewards work performed in France remains taxable in France. Inbound regimes have their own conditions, to be checked with a local correspondent before relying on them.

Several colleagues are in the same situation: can we consult together?

Yes for the shared legal groundwork, which is the same for everyone. But once situations are quantified, they diverge: shares already held or not, retention amount, current residence, household. The firm proposes a shared groundwork and individual engagements, so that each person's information stays in their own file and recommendations can differ.

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