Can a foreign invested enterprise use equity incentives to reward employees?

1. The income tax of foreign-invested enterprises is about to be merged with domestic enterprises, and the method of accruing expenses related to this will also change, so it is better to wait for the promulgation of the new law and implement it according to the new law.

2. The enterprise welfare withdrawn after tax shall be listed in the "surplus reserve - community chest".

3. In the new accounting system, there is also an account of "welfare expenses payable". According to the old enterprise income tax rules, the balance of domestic enterprises can be retained and carried forward to the next year. The regulations of foreign-funded enterprises are that the expenses shall be recorded according to the actual expenses within the accrual ratio, that is, the balance shall be reversed to the expenses.

This estimate will also change after the merger of the two laws.

It cannot be carried out directly, and the law stipulates that no natural person can hold shares in a foreign-funded enterprise. It can be carried out in other workarounds, such as simulated equity, holding company, etc.

The company is preparing to go public, and we are in the second round of equity incentives.

Answer: When listed companies implement equity incentives, they are all exercised, and if they are lower than the market price, they will be cancelled or lowered. Equity incentive is an incentive method that gives certain economic rights to business operators in the form of obtaining the company's equity, so that they can participate in corporate decision-making as shareholders, share profits and take risks, so as to serve the long-term development of the company diligently and responsibly. Among the different incentive methods, the salary is mainly determined in advance according to the manager's qualifications, the company's situation and target performance, which is relatively stable in a certain period of time and has a very close relationship with the company's target performance.

Bonuses are generally used to determine the manager's income based on the assessment of the performance beyond the target, so it is closely related to the company's short-term performance, but it is not obviously related to the company's long-term value, and the manager may sacrifice the company's long-term interests for the sake of short-term financial indicators. But from a shareholder investment perspective, he is more concerned with increasing the company's long-term value. Especially for growing companies, not just the achievement of short-term financial metrics.

Question: The company plans to prepare for listing within two years.

Personal wishes. Ask what to do if you can't get up within two years.

Question: If the money that cannot be invested within two years is returned in its original form.

It's usually a waste.

The question is mainly asked to see the scope of the contract.

Ask how to find out.

Can equity incentives really be incentive? What is the real effect? Lawyers talk about insights.

The reserves**, enterprise development**, employee incentives and benefits** withdrawn by foreign-invested enterprises in accordance with the regulations shall be debited to the accounts of "Profit Distribution - Withdrawal of Reserves**", "Profit Distribution - Withdrawal of Enterprise Development**", "Profit Distribution - Withdrawal of Employee Incentives and Benefits**", and credited to the accounts of "Surplus Reserve - Reserves**", "Surplus Reserve - Enterprise Development**" and "Employee Remuneration Payable". However, I have not found a basis for "must accrue".

We understand that the above-mentioned employee benefits and incentives withdrawn by foreign-funded enterprises after tax** are not subject to the provisions of Guo Shui Han 2008 No. 264. The employee welfare expenses incurred by foreign-invested enterprises in 2008 shall be allowed to be deducted before tax at a rate not exceeding 14% of the total wages and salaries; The excess amount shall not be deducted before tax, but can be deducted from the balance of the above-mentioned "Welfare Payable - Employee Benefits and Incentives**".

That's right! This is because employee incentives and benefits** extracted from net profit are no longer within the scope of the "Employee Compensation Payable" account.

It is incorrect and should be accounted for in the "Employee Compensation Payable" account.

It should belong to the account of employee remuneration payable.

This should be accounted for in the employee compensation accounts payable.

Small enterprises (foreign investment) in accordance with the provisions of the reserves**, enterprise development**, employee incentives and benefits**, debited "profit distribution - withdrawal of reserves**, extraction of enterprise development**, withdrawal of employee incentives and benefits**" account, credit this account (reserves**, enterprise development**), "payable employee remuneration" account. This is stipulated in the new small business accounting system in 2013.