Business in Gibraltar | Tag Consultancy

Business Opportunities in Gibraltar

What are the benefits & advantages of bringing your business to Gibraltar?

Setting up a business in Gibraltar has a large number of advantages. Not only is corporate tax charged at a mere 12.5%, Gibraltar also provides the perfect gateway to the UK market. Gibraltar is therefore a favourable jurisdiction for asset holding companies, intellectual property holding companies & companies providing products and services.

Taxation in Gibraltar

There are very attractive & favourable tax rates in Gibraltar.

Corporation Tax: 12.5% (20% for certain utility companies)
VAT: None
Capital gains tax: None
Wealth Tax: None
Inheritance tax: None
Withholding tax: None
Highest effective rate of income tax: 25% (on the gross income-based system)
High net worth individuals or employees possessing specialist skills: Special tax rates for at Category 2 and HEPSS.

There are Gibraltar Residency Solutions under the Category 2 and HEPSS status described above. In order to qualify for Category 2 status: you will be required to purchase/rent a Gibraltar property, have a minimum of £2m in assets, have not been a Gibraltar resident for the previous 5 years, provide a CV and have private medical insurance. Category 2 individuals are not required to be in Gibraltar for any given amount of days.

In order to qualify for HEPPS status: you will be required to possess specialist skills not readily available in Gibraltar and provide value to Gibraltar, must purchase/rent a Gibraltar property, must not have occupied or have been resident in Gibraltar in the preceding 3 years, produce a valid Passport and CV, provide 2 independent references (one which must be a bank) and have an employment contract with a Gibraltar company.

Political Stability

Gibraltar has been a British overseas territory for more than 300 years since it was ceded in perpetuity by Spain to Great Britain under the Treaty of Utrecht.

Gibraltar’s Constitution guarantees that Britain will never enter into arrangements that would place Gibraltar under the sovereignty of any other state against freely and democratically expressed wishes of the people of Gibraltar.

Gibraltar continues to implement EU Directives, particularly those in the area of Banking, Insurance and Fund Management.

Legal System

The legal system is based on English common law and statute law and overseen by an independent judiciary.

The administration of justice is undertaken by the Chief Justice. There are three courts: a Magistrates' Court, a Supreme Court and a Court of Appeal for Gibraltar. The ultimate Court of Appeal is the Privy Council in the United Kingdom.

Gibraltar is part of the EU, under the provisions of the Treaty of Rome. It is, however, excluded from the Common External Tariff, the Common Agricultural Policy and the requirement to levy Value Added Tax (“VAT”).

Property Market

Background: There are around 13,000 residential units in Gibraltar, of which are either (1) government owned and / or funded (local market) and (2) privately owned and / or funded (open market).

The local market properties are those that were built with government funding and therefore can only be occupied by persons who have been resident in Gibraltar for 3 years or more. A large amount of these properties are rented
by the government to individual local tenants, although some are now owned by the occupant. The local market properties account for some 50% of the entire housing stock.

Local market properties cannot be rented out, therefore, unsuitable for investors.

The open property market in Gibraltar is governed by the Standard demand and supply principles. Property acquisition as an investment is very common in Gibraltar with a demonstrated track record.

Tax, Stamp duty and other purchase costs: The rates of duty applicable are as follows:

(1) Nil % when the property value does not exceed £200,000, or in the instances of first or second-time buyers, £250,000. In cases where the property is being transferred between spouses or, following the dissolution of a marriage,
between former spouses, this is also nil.

(2) 2% on the first £250,000 and 5.5% on the balance, where the property value exceeds £200,000 but does not exceed £350,000, and

(3) 3% on the first £350,000 and 3.5% on the balance where the property value exceeds £350,000

When a property is purchased with the assistance of a mortgage, stamp duty is charged at the rate of 0.13% where the amount borrowed does not exceed £200,000 and 0.20% for amounts in excess of £200,000.

Compared with the UK and Spain, these stamp duty rates are attractive to purchasers.

Regulation

The Gibraltar Financial Services Commission (“GFSC”) regulates the Financial Services industry in Gibraltar.

The GFSC supervises a broad range of firms including: auditors, banks, company managers, e-money institutions, professional trustees, payment services providers, funds and fund service providers, insurance companies, managers
and intermediaries, investment firms, and insolvency practitioners. Firms that wish to do business in or from within Gibraltar must meet its standards and criteria both at application stage and on an on-going basis.

Their Supervisory work focuses primarily on the way firms are operated and governed and the identification of risks to consumers and the reputation of the jurisdiction more generally.

Climate & Lifestyle

The climate is Mediterranean and mild and boasts around 300 sunny days per year.

The average mid-day summer temperature is 23°C (which can rise to as much as 35°C) and a winter average of 13°C.

Gibraltar’s rich history and environment ensures a distinguished position as a destination for both tourism and business.

Gibraltar's close proximity to Spain and mainland Europe offers many social, cultural and sporting opportunities.

Gibraltar offers a high standard of primary and secondary education, has its own university and assists in the funding of overseas University courses for its own residents.

Infrastructure

Gibraltar has an extremely efficient and modern telecommunications network, with a number of different private operators offering high speed connectivity for broadband and 3G/4G mobile connectivity. Gibraltar’s country code is +350 and its domain extension is .gi.

Gibraltar has a rich network of roads, including tunnels which go through the Rock itself and to each point in Gibraltar. It is possible to complete a full circuit of Gibraltar by car.

Gibraltar has its own international airport (GIB) with regular flights to a number of destinations. The airport also caters to charter/private flights, as well as cargo planes and military aviation.

The Port of Gibraltar also caters for a wide variety of vessels including cruise liners, cargo ships and British naval craft.

There is a rich selection of quality hotels with large conferencing facilities, including the Sunborn hotel, a five star “yacht hotel”, built from a decommissioned luxury cruise liner located in Gibraltar’s lively Ocean Village district. Gibraltar is well equipped to host high-profile conferences, festivals and events, and hosts regular sporting and entertainment events, including MTV’s “Gibraltar Calling” Music Festival.

Gibraltar also has its own Stock Exchange and a University.