European Commission Renews EU State Aid Approval of Enterprise Management Incentive (“EMI”) Options

On 15 May 2018, the European Commission announced its decision to renew the EU State Aid approval which is critical to the operation of the EMI regime, and the tax-advantaged treatment of options granted thereunder.  As noted in a previous post (Enterprise Management Incentives (EMI) Schemes), the expiration of the previous EU State Aid approval on 6 April 2018 gave rise to uncertainty regarding whether options granted (and possibly exercised) after 6 April 2018 would benefit from tax-advantaged treatment (and, insofar as possible, many companies delayed the grant of EMI options, pending the necessary EU State Aid approval).  The confirmation that such approval has now been received will therefore come as a relief (no pun intended) to companies operating EMI schemes, as the Commission’s decision ensures that small and medium-sized enterprises can continue to use EMI options as a tax-efficient means of attracting and retaining talent.  The Commission has noted, however, that its decision applies only until the UK ceases to be an EU Member State and it is not yet clear how, if at all, the status of options granted during the “hiatus period” (being the period after 6 April 2018 but before 15 May 2018) is affected.