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Doing Business in Gibraltar
COUNTRY INTRODUCTION
• Premierself-governingandwellregulatedEuropeanFinanceCentrelocatedontheeye-catchingRocklocatedatthetipofSouthernSpain.
• Partof theEuropeanUnionasaselfgoverningUKOverseasTerritorydistinct fromothercompetitorssuchasJersey,GuernseyorIsleofMan.
• Populationofapproximately30,000withatotallandareaofapproximately7squarekilometresalbeitthisissubjecttolandreclamation.
• OfficialcurrencyisSterling.
• OfficiallanguageisEnglish(althoughSpanishisalsowidelyspoken).
• Attractivejurisdictionforhighnetworthindividuals,companies,financialservicesandfundsgiventhecombinationofacompetitivelowtaxenvironmentandanenviableclimate,lifestyleandlocation.
• Investment growth areas include Financial Services (including insurance and funds). Technology includingE-Gaming(albeitlimitedtoestablishedbluechipcompanies);tourism,relocationofhighnetworthindividualsandbusinessesseekingtoofferfinancialservicesthroughtheEuropeanUnion.
• Wehaveextensiveexperienceincomplexdomesticandinternationalmatters,transactionsandarrangementsandregularlyworkwithawidevarietyofprofessionalsandclientsworldwide.
• Asaresultofsuchextensiveexperience,werecogniseandunderstandtheimportanceofadoptingacommunicative,diligentandpracticalapproachinordertodealwithindustryspecificissuesandcompletesuchmatters,transactionsandarrangementswithinchallengingcommercialtimeframes.
• A key aspect of the corporate and commercial practice also involves a detailed understandingof the taxationand corporate governance aspects of commercial entities and structures, and their related transactions andarrangements.
• Wehaveaproven track recordofassistingourclientswith theirmostsignificantandchallengingcommercialtransactions,matters, structures, liabilitiesandobligationsbyofferingexperienced, responsive,pragmaticandcommercially-mindedadviceacrossafullrangeofindustries,sectorsanddisciplines.
BUSINESS PRESENSE
• Gibraltarisanexcellenthubfortheestablishmentofinternationalbusiness.TheleadingactivitiesinGibraltarareFinancialServicesandE-Commerce,Insurance,Bunkering,Property,TourismandTransportaswellasmaritimerelatedservicesgivenGibraltar’slocation.
FOREIGN INVESTMENT RESTRICTIONS & CONDITIONS
• AppropriateapprovalsandlicensesarerequiredfortheoperationofbusinessactivitiessubjecttotherequirementsoflocalandapplicableEuropeanlegislation.
EXCHANGE CONTROL• TherearenoexchangecontrolsinGibraltar.
TAXATION
Lowtaxenvironment:
Corporation Tax:• Thestandardrateoftaxationeffectivefrom1stJanuary
2011isaflatrateof10%ondefinedtaxableincomeforallcompaniesandbranchesinGibraltarexceptforcertaincategoriesofcompanies:telecommunications,petroleum,electricity,sewageandcompanieswhichabuseadominantpositionwheretaxisleviedat20%oftaxableincome.
• Territorial basis for taxation of companies - Tax ispayableonincome/profitsandgainsfromatradeorbusinessprofessionorvocationaccruinginorderivedfrom Gibraltar. That means that in certain casesbusiness activities which do not “accrue or derive”fromGibraltar are not taxable in Gibraltar. Advancerulingscanbeobtainedtoprovidecertainty.
Capital Gains Tax• There is no capital Gains tax payable in Gibraltar.
However, it should be noted that in appropriatetrading circumstances, gainswhich are deemed astradinggainsmaybeliabletoincometaxsubjecttotheprovisionsoftheIncomeTaxAct2010.
Inheritance Tax• Noinheritancetax.
Parent- Subsidiary Rules / Dividends• No charge to tax on the receipt of dividends by a
Gibraltarcompanyfromanyothercompanyregardlessofwhereitisincorporated.
• No tax payable on dividends paid by oneGibraltarcompany to another Gibraltar company. Dividendspaid by a company which is ordinarily resident inGibraltarareliabletotaxinGibraltarwhenpaidtoashareholderwhoisanindividualordinarilyresidentinGibraltar.A taxcredit at the rateof taxpaidby thecompanyontheprofitsoutofwhichthedividend isbeingpaidshallbeavailableforsetoffagainstanytaxthatmaybechargedonthatincome.
• No withholding tax on dividends paid albeit if adividendisdeclaredinrespectofaGibraltarresidentindividualorcompanythenitmustsubmitareturnofdividends.
InterestInterestisnottaxableinGibraltarunless:• Itisinthecourseoflicensedmoneylendingactivities
ordeposittakingactivitiesasdefinedintheFinancialServices(Banking)Act;or
• It is interest on loans by a company to anothercompanyinexcessof£100,000.
Royalties • Royalties received or receivable by a company are
liabletotaxinGibraltarandroyaltieswillbedeemedtoaccrueandderiveinGibraltarwherethecompanyin receipt of the royalty is a company registered inGibraltar.
Personal Income Tax• IndividualsordinarilyresidentinGibraltarareliableto
taxinGibraltarontheirworldwideincome.AnindividualisdeemedtobeordinarilyresidentinGibraltariftheyarepresent inGibraltarforeither183daysormoreinataxyear;ortheyarepresentinGibraltarformorethan300daysinanythreeconsecutivetaxyears.
• Individualscanopt tobe taxedunderanAllowanceBasedSystemorGross IncomeBasedSystemandwillpayinaccordancewithwhicheversystemresultsinlowertax.
• Individualsaresubject tograduatedtax ratesat theapplicableratesof15%to40%and6%to28%undertheAllowanceBasedSystemandtheGrossIncomeBasedsystemrespectively.
Double Tax Arrangement• Therearecurrentlynodoubletaxationarrangements.
• AGibraltarresidentwhoisinreceiptofincomewhichisliabletotaxinGibraltarthatisderivedfromandhasalreadysufferedtaxinanyotherjurisdiction,shallbeentitledtodoubletaxationreliefinGibraltarinrespectofthatincomeofanamountequaltothetaxalreadydeductedortheGibraltartax,whicheveristheless.
TAX AND INVESTMENT INCENTIVES
• The Government of Gibraltar has entered into TaxInformation Exchange Agreements (TIEA) with 27countries including the USA and the UK and hassigned an Intergovernmental Agreement (IGA) withtheUKtoimproveinternationaltaxcompliance.TheGovernmentofGibraltarhasindicatedthatitwillsigna similar agreementwith theUSA. In addition, theCouncilofEuropeConventiononMutualAdministrativeAssistanceinTaxMattershasbeenextendedtocoverGibraltar
High Net Worth Individuals• AnindividualwhohasappliedtotheFinanceDirector
and obtained a Category 2 certificate under theQualifying(category2)IndividualsRulesshallbeliabletoincometaxonthefirst£80,000ofhisassessableincomeonlyandtheamountoftaxdueandpayablein any year of assessment shall not be less than£22,000.ToqualifyforCategory2statusanIndividualmustfulfilthefollowingconditions:
• HaveavailabletohimforhisexclusiveuseapprovedresidentialaccommodationinGibraltarforthewholeoftheyearofassessment;
• HavenotbeenresidentinGibraltarfortheprevious5years;
• Havenotbeenengagedfortheprevious5years,andwill not be engaged in the futurewhilst aCategory2 Individual, in a trade, business or employment inGibraltar (other than, in general, duties which areincidental to any trade, business or employmentsbased outside Gibraltar or providing consultancyservicesfromGibraltarincertaincircumstances).
• Have applied to the Finance Centre Director andhasbeenissuedwithacertificatequalifyinghimasaCategory2individual;
• In practice an individual must also demonstrate afinancialstandinginexcessof£2million.
• Individualspossessingskillsorexperiencewhicharenot available in Gibraltar which are deemed to benecessarytopromoteandsustaineconomicactivityofparticulareconomicvaluetoGibraltarcanapplyforHighExecutivePossessingSpecialistSkills (HEPSS)status provided he will earn more than £120,000.Underthisstatustheindividualshallbechargedtotaxlimitedtothefirst£120,000ofhisassessableincomeundertheGrossIncomeBasedSystem.
Deposit Guarantee Scheme• Gibraltar has implemented the European Union
Directive on Deposit Guarantee Schemes. Thisensuresthatthereisalevelofdepositprotectionfordepositors with credit institutions in Gibraltar andcovers100%ofabank’stotalliabilitytoadepositorinrespectofqualifyingdepositssubjecttoamaximumpaymentof€100,000.
Investor Compensation Scheme• The European Union Directive on Investor
Compensationschemeshasalsobeenimplementedin Gibraltar. This scheme covers 90% of all eligibleinvestmentsheldbytheclaimantwiththeinvestmentsfirm subject to a maximum payment to any oneindividualof€20,000.
EMPLOYMENT LAW
Working Conditions• ThemaximumamountofworkinghoursinGibraltaris48hoursaweekunlessotherwiseagreedwithanemployer
inwriting.
• There isapolicyofequalpayforwomenandaminimumwageprotectionforcertain industries.Thestatutoryminimumwageiscurrently£6perhour.
Trade Unions• Whilst tradeunionsare recognised inGibraltar it isnotcompulsory forworkers to joina tradeunion.All trade
unionsinGibraltarmustberegistered.
Insolvency Fund Claims• Thisfundprovidesforclaimsofemployeesofinsolventemployersthatmayhavefoundthemselvesbeingowed
wagesorsalaries,accruedholidaypay,noticeperiods,etc.,ontheirterminationofemployment.
INTELLECTUAL PROPERTYApplications to Register a Trade Mark or Patent Cannot Originate in Gibraltar. • The Patents Act 1924 provides that patents duly
granted and registered in the UK will be extendedto Gibraltar upon application, production of theappropriate documents and the payment of therequisitefee.
• Such certificate of registration shall confer on theapplicantprivilegesandrightssubjecttoallconditionsestablished by the law of Gibraltar as though thepatenthadbeen issued in theUnitedKingdomwithanextensiontoGibraltar.
Trademarks• TheTrademarksAct1948provides thatanyperson
beingtheregisteredproprietorofatrademarkintheUnited Kingdommay apply at any time during theexistenceoftheregistrationintheUnitedKingdomtohavesuchtrademarkregisteredinGibraltarinrespectofsomeorallofthegoodscomprisedintheUnitedKingdomregistration.
• Upontheregistrationofsuchatrademarkaregisteredproprietor in Gibraltar shall have the privileges andrights in theuseof the trademark in respectof thegoodsenteredintheregisteraswouldbeconferredonhimby the law for the timebeing in force in theUnitedKingdom.
DISPUTE RESOLUTION
• The legal system in Gibraltar is largely based andderived from English law principles of equity andcommonlawaswellasapplicableEuropeanlaw.
The Courts of Gibraltar Are as Follows:+ The Magistrates’ Court: The Magistrates’ Court’s
Jurisdiction is broadly comparable to that of theMagistrates’CourtofEnglandandWales
+ TheSupremeCourt:TheSupremeCourtofGibraltardealswiththevastmajorityofcivilmattersinGibraltarandassuchisbroadlycomparabletotheHighCourtofEnglandandWales.TheSupremeCourtofGibraltaralso dealswith criminalmatterswith the equivalentjurisdictionoftheCrownCourtinEnglandandWales.
+ TheCourtofAppeal:Appeals inGibraltarareheardbyalocalCourtofAppealwhichnormallyhasaroundthreesittingseachyearandiscomprisedofrecentlyretiredleadingjudgesfromtheUKaswellasthelocalChiefJusticewhositsinanexofficiocapacity.
+ TheJudicialCommitteeofthePrivyCouncil:TherightoffinalappealistotheJudicialCommitteeofthePrivyCouncilwhichisthehighestCourtandfinalcourtofappeal.ThePrivyCouncilusuallysitsinLondon.
• Alternative dispute resolution (ADR) is available andincludesmediationandarbitration.
IMMIGRATION PROCEDURESPassport and Visa Requirements• Passports are required by all visitors to Gibraltar,
exceptEUnationalswhoareinpossessionofavalidnationalidentitycard.
• Only citizens of countries that appear on the EUCommonVisaListrequirevisastoenterGibraltar.
Residency • EuropeanEconomicArea(EEA)nationalsareentitled
to enter or remain in Gibraltar in any case wheretheyareentitledtodosobyvirtueofanenforceableEuropeanCommunityright.
• Other nationals require both residency permits andworkpermits.
Work Permits• AnationalofanEUStatemayworkinGibraltarand
enjoyallthebenefitsandprotectionsoftheEuropeanlegislationrelatingtothefreemovementofworkers.
• Non-EU nationals may also be able to obtainemployment in Gibraltar but they are required toobtainaworkpermit.
• InthecaseofnonEEAnationalsaworkpermitwillonlybegrantediftherearenoworkersinGibraltarwhoareableandwillingtotakeuptheparticularemployment.
triay & triay gibraltar28IrishTown,Gibraltar
triay & triay spain s.l. sotograndeEdificioPlazaMayor,Planta1a-17,
PlazaMayors/n,PuebloNuevodeGuadiaro,Sotogrande,11310Cádiz
triay & triay spain s.l. marbellaAv.RicardoSorianoNo.19-5,Marbella29600Málaga
Telephone+34952902400Facsimile+34952827373Email [email protected]
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