How long does it take to set up a company in Gibraltar?

The company incorporation process in Gibraltar is generally quick and efficient, once all docs are in order it takes 3-5 days to incorporate the company. The exact time frame depends on the type of business structure you choose and the nature of your business. Simpler structures, like a private company limited by shares, tend to be processed more swiftly, while more complex setups or businesses in regulated industries might take longer due to additional requirements.

What is the business tax rate in Gibraltar?

The flat rate of 15% on company profits is one of the lowest corporate tax rates in Europe, making Gibraltar a highly attractive location for businesses seeking to maximise profitability while reducing tax liabilities. This low rate applies to profits earned within Gibraltar, allowing businesses to retain more of their earnings for reinvestment and expansion. Additionally, Gibraltar does not impose Value Added Tax (VAT) or capital gains tax, further reducing the tax burden on companies operating within its jurisdiction. The absence of VAT simplifies transactions and financial reporting, while the lack of capital gains tax means businesses can sell assets without incurring additional tax liabilities. For international businesses, the dividend exemption for profits received from foreign subsidiaries adds another layer of attractiveness, making Gibraltar a preferred jurisdiction for global operations.

Do I need to live in Gibraltar to run a company?

No, you do not need to reside in Gibraltar to manage or own a Gibraltar-registered company.

How can businesses ensure compliance with AML regulations in Gibraltar?

Businesses can ensure compliance with AML regulations in Gibraltar by implementing robust AML policies and procedures, conducting regular risk assessments, training employees on AML requirements, and establishing internal controls to detect and prevent financial crime. Additionally, businesses can seek assistance from AML compliance experts, such as TAG, to navigate the complexities of AML regulations and implement effective compliance programs.

How does Gibraltar government regulate AML compliance?

AML compliance in Gibraltar is regulated by various government entities, including the Central Bank of Gibraltar, the Financial Intelligence Unit (FIU), and the Ministry of Economy. These entities issue regulations, guidelines, and directives to ensure that businesses adhere to AML requirements and implement effective compliance programs.

How often are financial audits required for businesses in Gibraltar, including free zones?

The frequency of financial audits varies depending on factors such as the company's legal structure, industry, and regulatory requirements. Generally, businesses in UK, including those in free zones, are required to undergo annual financial audits. However, additional audits may be necessary for specific purposes such as mergers and acquisitions, regulatory compliance, or internal control assessments.

How often are financial statements required to be submitted to regulatory authorities?

Companies in Gibraltar typically must submit their financial statements annually, within 90 days from the end of their financial year. However, specific submission deadlines may vary depending on the regulatory authority overseeing the company's activities and its legal structure.

Is Gibraltar a good place to start a business?

Yes, Gibraltar is a highly attractive place to start a business due to its low 12.5% corporate tax rate, absence of VAT and capital gains tax, and straightforward company formation process. It offers a stable legal system based on English common law, a strategic location between Europe and Africa, and strong regulatory standards.

What accounting software is commonly used in Gibraltar, and what are their features?

Popular accounting software used in Gibraltar includes Xero, QuickBooks, and Sage. These platforms offer features such as automated bookkeeping, invoicing, expense tracking, and financial reporting, facilitating efficient accounting management for businesses of all sizes.

What are the benefits of conducting a financial audit for businesses in Gibraltar free zones?

Financial audits in Gibraltar free zones help businesses demonstrate transparency, credibility, and compliance with regulatory requirements. They provide assurance to investors, creditors, and other stakeholders about the company's financial health and integrity. Additionally, audits help identify areas for improvement in financial reporting processes and internal controls, contributing to enhanced operational efficiency and risk management.

What are the key components of an AML compliance program?

An effective AML compliance program typically includes measures such as customer due diligence (CDD), ongoing monitoring of customer transactions, reporting of suspicious activities, employee training and awareness, risk assessment, and internal controls to prevent money laundering and terrorist financing.

What are the key steps involved in a financial audit process in Gibraltar?

The financial audit process typically involves planning, risk assessment, substantive testing, analytical procedures, and reporting. Auditors examine financial statements, supporting documentation, internal controls, and compliance with regulatory requirements to provide an independent opinion on the fairness and accuracy of the financial statements.

What are the regulatory requirements for financial reporting in Gibraltar?

Financial reporting in Gibraltar is primarily regulated by the UK Law No. 2 of 2015 concerning Commercial Companies, which outlines the obligations for companies to prepare and submit financial statements annually. Additionally, the UK Securities and Commodities Authority (SCA) regulates financial reporting for publicly listed companies and requires adherence to International Financial Reporting Standards (IFRS) or Generally Accepted Accounting Principles (GAAP).

What are the requirements for company formation in Gibraltar?

Requirements vary depending on the type of business activity and the jurisdiction (mainland or free zone). Generally, businesses need to submit specific documents, such as a business plan, passport copies, and proof of address, along with the completed application form.

What corporate records must a company in Gibraltar maintain?

A company in Gibraltar must maintain several key corporate records at its registered office to ensure legal compliance. These include: Statutory Registers: For directors, shareholders, secretaries, mortgages, and beneficial owners (UBOs). Financial Records: Such as bank statements, invoices, and ledgers. Key Legal Documents: Including the Certificate of Incorporation, Memorandum and Articles of Association, and minutes of all board meetings. All corporate records must be kept for a minimum of six years.

What is a financial audit, and why is it important for businesses in Gibraltar?

A financial audit is an independent examination of a company's financial records, transactions, and internal controls to ensure accuracy, reliability, and compliance with regulatory requirements. It is essential for businesses in Gibraltar to undergo financial audits to provide assurance to stakeholders, investors, and regulatory authorities regarding the integrity of their financial reporting.

What is a registered agent in Gibraltar?

A registered agent is a mandatory, official representative for a company, acting as the primary point of contact with government authorities. Their role is to ensure the company meets all of its legal and regulatory obligations.

What is AML, and why is it important in Gibraltar?

AML refers to Anti-Money Laundering, which involves measures taken by financial institutions and businesses to prevent and detect illegal financial activities, such as money laundering and terrorist financing. In Gibraltar, AML is essential for maintaining the integrity of the financial system and preventing illicit funds from entering the economy.

What is the accounting requirement in Gibraltar?

The accounting requirements in Gibraltar encompass adherence to International Financial Reporting Standards (IFRS) for financial transparency, Value Added Tax (VAT) compliance, accurate financial reporting, annual audits, corporate governance principles, compliance with commercial laws, and adherence to free zone regulations for companies operating within them. Complying with these regulations ensures legal adherence, financial integrity, and accountability, with professional guidance essential for navigating Gibraltar accounting requirements effectively.

What is the cost of company formation in Gibraltar?

Costs can vary depending on factors such as the chosen company structure, business activity, location, and additional services required. Common expenses include government fees, license fees, office rent, visa fees, and professional service fees.

Who can be a director of a Gibraltar company?

A private company in Gibraltar can have a director who is a resident of any country. There are no restrictions based on nationality, and directors can be either individuals or another corporate body. A private company must have at least one director, while a public company must have at least two.

Who can conduct financial audits in Gibraltar, including free zones?

Financial audits in Gibraltar can be conducted by licensed audit firms registered with the relevant regulatory authorities, such as the Securities and Commodities Authority (SCA) for mainland companies or the respective free zone authorities for companies operating within free zones. These audit firms employ qualified auditors who adhere to internationally recognized auditing standards.

Who is required to comply with AML regulations in the Gibraltar?

AML regulations in Gibraltar apply to a wide range of entities, including banks, financial institutions, money services businesses, and designated non-financial businesses and professions (DNFBPs) such as real estate agents, lawyers, and accountants. Compliance requirements may also extend to businesses engaged in high-risk activities or industries.

TCSP Seminar summary findings

Posted on 24 Oct 2022

The Gibraltar Financial Services Commission ("GFSC") recently held a Trust & Company Service Provider ("TCSP") Seminar to highlight the specific trends across the industry identified during the recent Thematic Reviews in comparison to those carried out by them in 2017.

What were the issues in 2017?

The main issues highlighted by the GFSC in 2017 were in relation to the following areas:

Customer Due Diligence
Ongoing Monitoring, and
Transaction Monitoring

What current issues are still being highlighted?

In general Firms do have adequate policies and procedures in place, however they have identified deficiencies in the application of these.

After this last round of Thematic Reviews the GFSC has identified that firms are failing to meet the requirements in the follow areas:

Source of Wealth / Funds
Ongoing Monitoring / Transaction Monitoring
Risk Assessment
Independent Audit
Training

The seminar included an analysis by the GFSC of their finding verses the requirements / expectations in each of the areas identified above and concluded with a number of case studies again highlighting the issues listed above.

How has the industry adapted so far?

There have been changes in relevant legislation since then and, to help firms implement these changes the GFSC has since published additional guidance in respect of Source of wealth / funds, risk assessments and transaction monitoring.

How can TAG Consultancy help?

TAG Consultancy specialise in Compliance services. This means the review of compliance systems and processes, conducting AML Audits, AML Training, the drafting and review of policies and outsourcing its staff for daily compliance needs such as onboarding and file reviews.
If you require support with any of your compliance and AML requirements, you may contact us here and we will do our best to assist!

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