If a US startup offers you equity or an ESOP grant as part of a remote role, it is promising you the right, not the obligation, to buy a set number of shares at a fixed strike price after a vesting schedule, typically 4 years with a 1-year cliff (nothing vests before 12 months, then the rest vests gradually, often monthly). Equity is not cash and is worth zero unless the company is eventually acquired or goes public at a price above your strike price, so treat any number you are quoted, "X options" or "Y percent," as speculative upside on top of fair cash pay, never as a substitute for it. Several real questions, whether a non-US-resident contractor should make a US 83(b) election, how India's FEMA and RBI rules treat the grant, and how it is taxed on exercise and sale in India, depend on your specific setup and genuinely need a cross-border tax professional, not a blog post, before you act. This page explains the mechanics so you know what to ask.
Job postings for remote US GTM and sales roles increasingly mention "equity" or "ESOPs" with no explanation of what that means for someone based in India, taking the role as a contractor or through an EOR rather than as a direct US employee. This guide covers the mechanics every candidate should understand before signing, and flags the parts that are genuinely unsettled and worth a professional's time.
What does a startup equity grant actually promise, and what is a strike price?
A stock option grant gives you the right, not the obligation, to buy a set number of shares later at a fixed strike price (also called the exercise price), set at the time of grant. The grant letter should state the number of options, the strike price, and the vesting schedule. Owning options is not the same as owning shares; you only become a shareholder once you exercise, which means actually paying that strike price out of pocket.
What is a vesting cliff, and what happens if you leave before it?
A cliff is the initial period, commonly 12 months, before any options vest at all. Leave before the cliff and you typically walk away with zero equity, regardless of how long you actually worked. A common structure is a 4-year total vesting schedule with a 1-year cliff, shown below.
| Timing | What vests | Why it matters |
|---|---|---|
| Before month 12 | Nothing | Leaving before the cliff means forfeiting the entire grant |
| Month 12 (the cliff) | 25% of the total grant, all at once | The first vesting event; everything up to this point lands in one go |
| Months 13 through 48 | The remaining 75%, typically in equal monthly installments | Standard structure, but confirm your own grant's exact cadence in writing |
India's own rule for unlisted companies fixes only one number by law: at least 12 months between grant and first vesting. Everything else, the total length, the monthly versus quarterly cadence, is set by the specific plan, so read your actual grant letter rather than assuming the market-standard structure above applies exactly.
Is startup equity worth anything if the company is not acquired or does not go public?
Generally no. Vested options in a private company are usually illiquid, meaning there is no ready market to sell them, and they only become worth exercising if the company's share price at an eventual acquisition, IPO, or company-permitted secondary sale is above your strike price. Most startups never reach one of those outcomes. Treat equity as a lottery-ticket upside layered on top of fair cash compensation, never as a reason to accept below-market cash pay.
The honest framing: a grant letter that says "10,000 options at a $1 strike price" tells you almost nothing about what that is worth, because it depends entirely on the company's eventual outcome and the total number of shares outstanding (your actual ownership percentage), neither of which most early candidates are given cleanly. Ask for your fully-diluted ownership percentage, not just a share count, before weighing an equity offer against cash.
Should an India-based remote contractor or employee file a US 83(b) election?
This is genuinely unsettled and depends on your status. A Section 83(b) election mainly affects US tax liability, so if you are not a US taxpayer and do not plan to become one, it is often unnecessary, though some guidance suggests skipping it can create problems later if your status changes. The election also has a strict filing window (commonly cited as 30 days from grant) and requires a US taxpayer ID. Do not guess on this one; a cross-border tax advisor can tell you in one conversation whether it applies to your specific situation.
How is startup equity taxed for an India-based remote hire, and what should you check?
It depends on specifics a general guide cannot resolve: whether you are classified as a US-company employee or an independent contractor, your Indian residential status (resident, non-resident, or "not ordinarily resident," each taxed differently), and how India's FEMA and RBI rules treat the specific grant, since foreign companies issuing options to India-based staff generally face compliance and reporting requirements, with taxation potentially arising both at exercise and at eventual sale. Indian tax tribunal cases on exactly this kind of cross-border equity question have turned on detailed, fact-specific residency findings rather than a simple general rule. Before relying on any single answer, including this page, have a professional who works across both US and Indian tax rules review your actual grant and status.
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What does a startup equity grant actually promise, and what is a strike price?
A stock option grant gives you the right, not the obligation, to buy a set number of shares later at a fixed strike price (also called the exercise price), which is set at the time of grant. The grant letter will state the number of options, the strike price, and the vesting schedule. Owning options is not the same as owning shares; you only become a shareholder once you exercise, which means paying the strike price.
What is a vesting cliff, and what happens if you leave before it?
A cliff is the initial period, commonly 12 months, before any options vest at all. If you leave before the cliff, you typically walk away with zero equity, regardless of how long you worked there. A common structure is a 4-year total vesting schedule with a 1-year cliff: 25 percent of the grant vests all at once at the 1-year mark, then the remainder vests gradually, often monthly, over the following 3 years.
Is startup equity worth anything if the company is not acquired or does not go public?
Generally no. Vested options in a private company are usually illiquid, meaning there is no ready market to sell them, and they are only worth exercising if the company's share price is above your strike price at an eventual acquisition, IPO, or (less commonly) a secondary sale the company permits. Most startups do not reach one of those outcomes, so equity should be treated as speculative upside on top of fair cash pay, never as a substitute for it.
How is startup equity taxed for an India-based remote hire?
It genuinely depends on specifics a general guide cannot resolve for you: whether you are a US-company employee or an independent contractor, your Indian residential status, whether you might ever become a US taxpayer, and how India's FEMA and RBI rules treat the specific grant. Indian income-tax precedent has turned on exactly this kind of fact pattern. Get a cross-border tax professional to review your actual grant letter and status before relying on any blog's answer, including this one.
Related: Getting paid and taxed: remote US income from India · Contractor vs full-time for a remote US role · How to negotiate a remote US GTM offer from India