Gibraltar


The history of Gibraltar spans over 3,000 years. Gibraltar was first inhabited over 50,000 years ago by Neanderthals. Gibraltar's recorded history began around 950 BC with the Phoenicians, who lived nearby. During the times of Roman Empire the Rock of Gibraltar belonged to the Romans. Gibraltar became part of the Visigothic Kingdom of Hispania following the collapse of the Roman Empire and came under Muslim Moorish rule in 711 AD. In 1462. Gibraltar became part of the unified Kingdom of Spain and remained under Spanish rule until 1704. It was captured during the War of the Spanish Succession by an Anglo-Dutch fleet. At the war's end, Spain ceded the territory to Britain under the terms of the Treaty of Utrecht of 1713. Spain tried to regain control of Gibraltar, which Britain had declared a Crown colony, through military, diplomatic and economic pressure. Gibraltar was besieged and heavily bombarded during three wars between Britain and Spain but the attacks were repulsed on each occasion. The colony grew rapidly during the 19th and early 20th centuries, becoming one of Britain's most important possessions in the Mediterranean. After the Second World War the Spanish dictator General Francisco Franco revived Spain's claim to the territory. As the territorial dispute intensified, Spain closed its border with Gibraltar between 1969 and 1985. As a result of series of talks between 1997 and 2002 in September 2006 a three-way agreement was signed. Spain agreed to remove restrictions on air movements, to speed up customs procedures, to implement international telephone dialing, and to allow mobile roaming agreements. Britain agreed to pay increased pensions to Spaniards who had been employed in Gibraltar before the border closed. A new noncolonial constitution came into effect in 2007, but the UK retains responsibility for defense, foreign relations, internal security, and financial stability.

Service packages

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Service item Express Standard Optimum
Company registration
Legal address per year
Secretarial services for the first year
Fees and duties for the first year
Apostilled bound set of incorporation documents
Compliance fee
Nominee service per year
Bank Account Pre-approval
Price

3 465 USD

4 830 USD

5 330 USD

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Contact method: and / or

Core Services

3 465 USD

— Incorporation

including incorporation tax, state registry fee, including Compliance fee

Included

— Annual government fees

Stamp Duty and Companies House incorporation fee

2 200 USD

— Corporate legal services

including registered address and registered agent, NOT including Compliance fee

170 USD

—Delivery of documents by courier mail

DHL or TNT, at cost of a Courier Service

750 USD

— Apostilled set of Statutory documents

Optional services

375 USD

Nominee Shareholder

Paid-up “nominee shareholder” set includes the following documents

Related services

Tax Certificate

Company’s tax residence certificate for access to double tax treaties network

570 USD

Certificate of Good Standing

Document issued by a state agency in some countries (Registrar of companies) to confirm a current status of a body corporate. A company with such certificate is proved to be active and operating.

570 USD

Certificate of Incumbency

Compliance fee

Compliance fee is payable in the cases of: renewal of a company, liquidation of a company, transfer out of a company, issue of a power of attorney to a new attorney, change of director / shareholder / BO (except the change to a nominee director / shareholder)

150 USD

Basic

simple company structure with only 1 physical person

50 USD

For legal entity in structure under GSL administration

additional compliance fee for legal entity in structure under GSL administration (per 1 entity)

100 USD

For legal entity in structure not under GSL administration

additional compliance fee for legal entity in structure NOT under GSL administration (per 1 entity)

250 USD

For client with high risk Status

Cost of incorporation, including first year servicing 3465
Cost of nominee director services per year, including an apostilled set of documents 990
Cost of nominee shareholder services per year, including an apostilled set of documents 375
Cost of annual service, starting from the second year 2200
Open account in 28693
Incorporation timescale for a turnkey company 5 days
Country 26660

General information shortly

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Total area Population Capital Unemployment Corruption perceptions index rank
6.8 sq. km 29.111 (2013) Gibraltar 2.5% (2013) 14
Location on the southern end of the Iberian Peninsula
National currency Gibraltar pound
Conditional reduction of currency GIP
Against USD 0.61
Climate, average max and min t° Mediterranean with mild winters and warm summers; avg. maximum temperature (August) +32°; avg. minimum temperature (January) +8°
Time difference from Moscow - 3 hours
Dialing code +350
State language English
Ethnic groups British 27%, Spanish 24%, Genoese and other Italians 20%, Portuguese 10%, Maltese 8%, and Jews 3%
Literacy rate 96%
Government type British overseas territory
Executive branch Government (10 members) headed by the Chief Minister
Legislative branch Governor and Gibraltar Parliament (17 members and Speaker)
Judicial branch Supreme Court and Court of Appeal
GDP per capita rank 11 (2008)

Corporate info

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Shelf companies permitted Legal system Incorporation timescale for a turnkey company Cyrillic alphabet permitted in company name Local registered office
Yes based on English Common Law 5 days No Yes
Types of entity sole trader; partnership; limited liability partnership; company limited by shares; company limited by guarantee with or without a share capital; unlimited company with or without share capital; protected cell company; trust; non-profit making organization; non-resident company
Incorporation timescale for a new company 3 days
Company suffix Limited or Ltd
Sensitive words association, royal, imperial, trust, trustee, bank, assurance, insurance, holdings, group, Europe, Gibraltar, international
Local registered agent Yes
Information to be kept at the registered office register of directors and shareholders, minutes and resolutions, share transfer documents, administrative and book-keeping records
Seal required, type of seal not required
Redomiciliation (to, from) permitted permitted

Director and secretary

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Minimum number of directors Residency requirements for directors Corporate directors permitted Disclosure to local agent Disclosure to public
1 No Yes Yes Yes
Directors’ meetings/frequency/location No requirements
Company secretary required Yes
Residency requirements for a secretary Yes
Qualified secretary required No
Corporate secretary permitted Yes

Shareholder and beneficiary

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Minimum number of shareholders Residency requirements for shareholders Corporate shareholder permitted Disclosure to local agent Disclosure to public
1 Non-resident Yes Yes Yes
Meetings/frequency/location Yes / annually / abroad
Beneficiary info disclosure to Yes

Shares and share capital

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Minimum authorized share capital Minimum issued share capital Minimum paid share capital Authorized capital payment deadlines Bearer shares permitted
2 2 shares 2 shares No requirements No
Issued capital payment deadlines Upon issue of shares
Standard currency GIP
Standard authorized share capital 2000
Standard par value of shares 1
Shares with no par value permitted No

Taxes

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Min. rate for corporate tax Capital gains tax VAT Withholding tax Exchange control
10% No No No No
Personal tax 30%
Corporate tax (in detail) The rate for companies is 10%; utility companies and companies that abuse a dominant position are subject to taxation at 20%.
Government fee £75 annually
Stamp duty £10

Accounts

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Requirement to file accounts Publicly accessible accounts Audit required Requirement to file Annual Return Publicly accessible Annual Return
Yes Yes No Yes No
Requirement to prepare accounts Yes
Tax Exchange Information Agreement network 19
OECD member No
Offshore/onshore status according to the RF laws Yes

GENERAL INFORMATION

General info

Gibraltar is a British Overseas Territory located on the southern end of the Iberian Peninsula at the entrance of the Mediterranean.
Total area of Gibraltar is 6.8 sq. km. Population of Gibraltar is 29.111 people (2013). The main ethnic groups are British (27%), Spanish (24%), Genoese and other Italians (20%), Portuguese (10%), Maltese (8%), and Jews (3%). There are also small (less than 1%) peoples of other groups such as Moroccans, French, Austrians, Chinese, Japanese, Polish and Danish.
The capital is Gibraltar.
Official language of Gibraltar is English.
Official currency is Gibraltar pound (GIP). One US dollar is equal to 0.61 GIP.
Climate of Gibraltar is Mediterranean with mild winters and warm summers; avg. maximum temperature (August) +32°; avg. minimum temperature (January) +8°.
Time difference with Moscow is -3 hours.
Literacy rate is 96%.
Calling code of Gibraltar is +350.

History

The history of Gibraltar spans over 3,000 years. Gibraltar was first inhabited over 50,000 years ago by Neanderthals. Gibraltar's recorded history began around 950 BC with the Phoenicians, who lived nearby.
During the times of Roman Empire the Rock of Gibraltar belonged to the Romans. Gibraltar became part of the Visigothic Kingdom of Hispania following the collapse of the Roman Empire and came under Muslim Moorish rule in 711 AD.
In 1462. Gibraltar became part of the unified Kingdom of Spain and remained under Spanish rule until 1704. It was captured during the War of the Spanish Succession by an Anglo-Dutch fleet. At the war's end, Spain ceded the territory to Britain under the terms of the Treaty of Utrecht of 1713.
Spain tried to regain control of Gibraltar, which Britain had declared a Crown colony, through military, diplomatic and economic pressure. Gibraltar was besieged and heavily bombarded during three wars between Britain and Spain but the attacks were repulsed on each occasion.
The colony grew rapidly during the 19th and early 20th centuries, becoming one of Britain's most important possessions in the Mediterranean.
After the Second World War the Spanish dictator General Francisco Franco revived Spain's claim to the territory. As the territorial dispute intensified, Spain closed its border with Gibraltar between 1969 and 1985.
As a result of series of talks between 1997 and 2002 in September 2006 a three-way agreement was signed. Spain agreed to remove restrictions on air movements, to speed up customs procedures, to implement international telephone dialing, and to allow mobile roaming agreements. Britain agreed to pay increased pensions to Spaniards who had been employed in Gibraltar before the border closed. A new noncolonial constitution came into effect in 2007, but the UK retains responsibility for defense, foreign relations, internal security, and financial stability.

Government Type

By government type Gibraltar is a British overseas territory.
Head of State is Queen Elizabeth II (since February, 1952), who is represented by the Governor of Gibraltar. The governor enacts day-to-day matters on the advice of the Gibraltar Parliament, but is responsible to the British Government in respect of defence, foreign policy, internal security and general good governance. Judicial and other appointments are made on behalf of the Queen in consultation with the head of the elected government.
Executive power is exercised by the Government of Gibraltar which is elected for a term of four years. The head of Government is the Chief Minister. The government consists of ten elected members.
Legislative power belongs to the Governor and the Gibraltar Parliament (previously the House of Assembly) which is elected for a term of up to four years. The unicameral parliament consists of seventeen elected members, and the Speaker who is not elected, but appointed by a resolution of the parliament.
Judiciary power is composed of Supreme Court and Court of Appeal.

Economy

The economy of Gibraltar consists largely of the services sector (60%), other 40% belong to industry. There is no agriculture in Gibraltar. Whilst being part of the European Union, the British overseas territory of Gibraltar has a separate legal jurisdiction from the United Kingdom and enjoys a different tax system which took full effect in 2010. Today's economy mainly based on shipping, tourism, financial services, and the Internet (gaming).
The main income of the territory comes from trade in such fields as shipping, offshore banking, and holding international conferences. Financial sector provides 20% of GDP; tourist sector attracts about 6 million tourists annually.
Export items include liquid oil (mainly re-export) – 51%, finished goods – 41%, other items – 8%. Exports partners are Great Britain, Morocco, Portugal, Netherlands, Spain, USA, Germany.
Import items include liquid oil, finished goods, food. Import partners are Great Britain, Spain, Japan, Netherlands.

CORPORATE INFORMATION

Legal system

The legal system of Gibraltar is based on English common law.
The English Law (Application) Act of 1962 stipulates that English common law will apply to Gibraltar unless overridden by Gibraltar law. However, as Gibraltar is a self-governing British overseas territory, it maintains its own independent tax status and its parliament can enact laws independently of the United Kingdom.
Due to its specific status with the EU, the agricultural policy, customs union and the value added tax regulations - are not applicable in Gibraltar. Rules of free movement within the territory of the EU apply to capital, people and services, but not to goods. Gibraltar complies with European standards in the sphere of financial leverage and information exchange. Gibraltar issues bank licenses according to the common EU format; banking secrecy is protected by special legislation.
In December 2006, Gibraltar adopted a new constitution for the jurisdiction, which aimed to give it more autonomy from the United Kingdom over its own internal affairs.

Types of entity

The main business entities in Gibraltar are the following:
  • sole trader;
  • partnership;
  • limited liability partnership;
  • company limited by shares;
  • company limited by guarantee with or without a share capital;
  • unlimited company with or without share capital;
  • protected cell company;
  • trust;
  • non-profit making organization;
  • non-resident company.

The most popular form in Gibraltar is a company limited by shares . For offshore solutions the most recommended form is non-resident company. Activity of such a company is regulated by Gibraltar law, but its management is carried out from abroad. A Company incorporated in Gibraltar has the same powers as a natural person.

Non-resident company

To be a non-resident company, a Gibraltar-registered company has to satisfy the following criteria:
  1. The company must be owned by persons, who are not resident in Gibraltar.
  2. The company must be controlled (directed) by persons who are not resident in Gibraltar.
  3. The company may not trade or carry on business in Gibraltar with residents of Gibraltar.
  4. A Non Resident company cannot undertake the business of banking, deposit taking, insurance, reinsurance, fund management, asset management or any other activity associated with the finance industry.
  5. The company must not remit income to Gibraltar.

The last requirement effectively means that in order to maintain its no-tax status a Gibraltar non-resident company should not hold any bank accounts in a Gibraltar-situated bank. If the above criteria are satisfied, the company will not fall under the Gibraltar tax system by definition and will not be required to register for Gibraltar taxation purposes. This also means that the non-resident company can in no circumstances be considered as a Gibraltar taxpayer.

REGISTRATION

Company name

A company name must satisfy the requirements of the Gibraltar Business Names Registration Act. The name must be checked and approved at the Company Registry and registered at the Registry of Business Names.
The name may be expressed in English or any language using the Latin alphabet (certified translation required). Names in Cyrillic alphabet are not allowed.
Upon registration and payment of the appropriate fee, the Registrar will issue a Certificate of Registration of a Business Name. Once registered, the Business name is unique to the owner and no one else can use that name. A Business Name, once registered, cannot be changed. However, changes that occur to the company’s details stated in the application (for example, change of address, change in the nature of the business, addition of new partners) must be notified to the Registrar by completing a Form of Change in Particulars and payment of a fee. When the business ceases to exist and the Business Name is no longer required, a Form of Notice of Cessation of Business has to be presented to the Registrar.
A non-resident company cannot use a name without special permission, which is identical or similar to an existing company; any name which is undesirable or offensive in the opinion of the Registrar, any name which suggests royal or government patronage, or which may imply an activity associated with the banking or finance industry e.g. "Association", "Bank", "Imperial", "Assurance", "Group", "International", "Royal" or "Trust".
The following words require special permission from the Gibraltar authorities to appear in a company name and such permission is close to impossible to obtain:
British, National, Gibraltar or Great Britain, Authority, board or council, Association, Federation or Society, Patent or Patentee, Chamber of Commerce, and/or Trade and/or Industry, Co-operative, Group Holding(s), Post office, Giro or Stock Exchange, Register or registered, Friendly Society or Industrial Provident Society, Trade Union, Charter or Chartered, Benevolent, Foundation or Fund, Chemist or Chemistry or Pharmaceutical, Police, Customs, Immigration, Foundation, School or University or College; Club, Authority, Council, Federation, Institute, Trust, and Investment Trust, Unit Trust, Bank, Directors, Financial, Savings, Commodities, Brokers, Credit, Nominee, Dire.
The suffix to denote limited liability in company names is ‘Limited’, or ‘Ltd.’.

Registration

Registration of Gibraltar companies is regulated by The Gibraltar Companies Act (1930).
To incorporate a company in Gibraltar it is required:
  • to ensure that the proposed name is acceptable to the Company Registrar;
  • to submit the following documents to the to the Companies House of Gibraltar: Memorandum and Articles of Association; Declaration of Compliance; Notice of Situation of Registered Office; Statement of Nominal Share Capital.

Once incorporated, a Certificate of Incorporation is issued.
It is possible to buy a shelf company of this type or to incorporate a new one. The standard incorporation time for Gibraltar companies is 5 days.

Local registered office

A Gibraltar Non-Resident Company is required to have a registered office in Gibraltar. At the registered office address the Company should keep its register of directors and shareholders, minutes and resolutions, share transfer documents, administrative and book-keeping records.

Local registered agent

By law every company in Gibraltar must have resident or registered agent.

Seal

Under Gibraltar law, a company is not required to have a corporate seal.

Redomicile

It is permitted to redomicile the companies both to and from the Gibraltar, according to the Companies (Redomiciliation) Regulations 1996 ("the Regulations").
Το redomicile into Gibraltar, the company must be domiciled in a country recognized by Gibraltar for this purpose. The Regulations allow for redomiciliation from within the EEA and countries which are members of the British Commonwealth as well as from most other offshore centres.
However, not all of the territories falling into the above categories will accept the redomiciliation of their companies to Gibraltar if there is no a reciprocal measure on the Gibraltar legislation. Therefore, every application for redomiciliation by a company to Gibraltar has to be assessed on a case by case basis. Examples of such territories are:
  • Some EU countries
  • USA
  • Canada
  • Switzerland
  • Bermuda
  • British South Atlantic Overseas Territories
  • Bahamas

Requirements to the company under re-domiciliation:
  1. An original Special Resolution signed by all the members of the Company, stating the wish that their company become Re-Domiciled in Gibraltar.
  2. The original Certificate of Incorporation of the Company as well as the original Certificate stating the change of name of the Company (if applicable).
  3. A copy of the Memorandum & Articles of Association of the Company.
  4. A Certificate of Good Standing in respect of the Company issued by the Registrar in its country of incorporation.
  5. Evidence that no proceedings for insolvency have been commenced against the Company in its country of incorporation (e.g. as confirmed by the Certificate of Good Standing).
  6. A copy of the Company's last Annual Return as filed with the Registry in its country of incorporation (if applicable).

Conditions for the company under re-domiciliation:
  • The name of the company seeking Re-Domiciliation in Gibraltar must be available on the Gibraltar Companies Register, and must comply with the conditions governing "controlled words" in the title of companies.
  • If by a date six months after the date of the Company's Re-Domiciliation, it has not satisfied the Gibraltar Registrar that it has ceased to be registered in its country of incorporation, the Gibraltar Registrar shall move to strike the company off the Gibraltar Companies Register.

Renewal

The renewal date is 13 months after incorporation and annually henceforward.

Winding up

There are two types of winding up:
I. Compulsory under an order of the court:
Under Section 220 of the Companies Act the company or any creditor, or any member may petition the court to wind up a company on the grounds specified in Section 220. The two most important grounds are:
  • the company is unable to pay its debts (the most common ground).
  • it is just and equitable (usually to resolve a dead lock between members).

The liquidator is appointed by the Court and must act under its supervision and under that of a committee of inspection appointed by the creditors and members.
ΙΙ. Voluntary under a resolution of the company of which there are two types:
(a) Members voluntary winding up.
Basic requirements which allow a company to be placed in Voluntary Liquidation by its Members:
  • The company must be solvent.
  • The company must be in good standing with the Registrar. This means that the company must be up to date with the filing of all its annual returns and returns of directors etc.

If the company is not in good standing the Registrar will not be able to give effect to the voluntary liquidation as he is not able to ascertain if the appointment of the directors swearing the declaration of solvency is still valid.
(b) Creditors Voluntary Liquidation
If the directors cannot make a declaration of solvency they make a financial report to the creditors and the creditors have the choice of appointing the liquidator. The fact that a voluntary winding up has commenced does not prevent the court from making an order for a compulsory liquidation. Under Section 331 of the Companies Act, the Registrar has a discretionary power to strike off any Company from the Register (no assets or liabilities). The procedure can be instigated by the Registrar or it can be requested by the Secretary or an officer of the company on behalf of the Company.
The new section 267A of the Companies Act allows the Registrar to strike from the register of companies any company, which has not filed annual returns in the previous three calendar years without recourse to the notification procedure of section 331. Since striking off a Company is at the Registrar's discretion, no assurances can be given as to when the procedure of striking a Company off the Register will be completed. In case of striking off, the fact that the Company has been dissolved does not annul the liability of every director, managing officer and member or shareholder; it will continue and may be enforced even after the Company has been struck off.
Pursuant to Sec 332 the Registrar has a discretionary power to restore a company to the Register of Companies within 10 years of the company being struck off.

COMPANY STRUCTURE

Directors

The minimum number of directors is one, who may be natural persons or a body corporate. They may be of any nationality, and need not be resident of Gibraltar. Details of the directors appear on the public file, but confidentiality can be preserved by the use of third party directors.

Secretary

All Gibraltar companies must appoint a resident company secretary to act as registered agent, who may be a natural person or body corporate. A sole director may not be a company’s secretary.

Shareholders

The minimum number of shareholders is one and should be a non resident of Gibraltar. Shareholders can be natural persons or body corporate.
The names of the shareholders are required to be listed on the Annual Return and Incorporation documents.
General meetings are to be held annually, outside Gibraltar.

Beneficiary

The details of the beneficial owner are only disclosed to the service provider and are kept in strict confidentiality.

Share capital and shares

The share capital of a Non-resident company may be denominated in any currency. The minimum authorized share capital is not limited, but normally companies with an authorized capital of G£ 2'000 are incorporated, as the minimum tax on share capital at the incorporation is G£10 (i.e. 0.5 % of GPB 2000), divided into 2000 shares of G£1 each. Minimum paid up capital is G£1. There are no payments deadlines or requirements to pay the authorized capital. Usually it is paid within 1-2 month after registration and once account is opened. As for the issued share capital, it is paid once shares are issued. Shareholders are liable to pay for any unpaid share capital in the event of the company being insolvent. Authorized share capital must be above or equal to the issued share capital. For example, the Gibraltar company can be incorporated with an authorized share capital G£10,000 divided into 10,000 shares of G£1.00 and only 2 shares can be issued and the remaining (without any obligation) can be issued by the Board of Directors of the company at any time if they wish so.
Bearer Shares are not permitted.

TAXES

Territorial basis of taxation

Only income derived and accrued in Gibraltar is to be taxable (with the exception of dividends, interest, pensions or emoluments of office).

New Income Tax Act (2011)

The new Income Tax Act became effective as from 1 January 2011. The new legislation introduced a 10% rate of corporate tax for all entities and the end of the exempt tax regime.
The Act deletes distinctions between onshore and offshore business in Gibraltar. The changes, according to the government, complete “14-year transition from tax haven to mainstream European financial services center” that is in “compliance with E.U. financial services regulation.”

Personal tax

Individuals are taxed on income accrued in or derived from Gibraltar and, if the individual is ordinarily resident, also on non-trading worldwide income (except rental income from foreign property). Individuals who are present in Gibraltar for less than 30 days per year are exempt.
Taxable income – All trade and employment income accrued in or derived from Gibraltar is taxable and, in the case of an ordinarily resident individual, worldwide income also is taxable. Interest income, royalty income and income from foreign property is not subject to taxation. Expenses incurred on the production of taxable income may be deducted for tax purposes.
Personal allowances are available to the taxpayer and his/her spouse. There also are allowances for children, dependent relatives, marriage, nursery school, life insurance and medical insurance. Gibraltar offers mortgage interest relief and a home purchase allowance.
Gibraltar has a dual tax system, under which a taxpayer is free to elect between an allowance-based system and a gross income-based system.
Rates under the gross income-based system are divided into rates for income under 25,000 GIP and income exceeding 25,000 GIP.
Individuals with gross assessable income not exceeding £25,000:
Income, GIP Tax Rate
the first 10,000 6%
the next 7,000 20%
balance 28%


Individuals with gross assessable income exceeding £25,000:
Income, GIP Tax Rate
the first 17,000 16%
the next 8,000 19%
the next 15,000 25%
the next 65,000 28%
the next 395,000 25%
the next 200,000 18%
the next 300,000 10%
balance 5%


The allowance-based system has a reduced rate of 15%, a standard rate of 30% and a rate of 40% for taxable income exceeding GIP 16,000.
Self-assessment is made on an annual basis, the year of assessment being the period of 12 months commencing 1 July and ending 30 June the following year.
Tax on employment income is withheld by the employer under the PAYE system and remitted to the tax authorities. Payments are due by 30 June and 31 December. The final payment is due by 30 November, together with the filing of the tax return.
There are surcharges for the late payment of tax and penalties for the late filing of tax returns and errors or omissions in the tax return/payment.

Corporate tax

Resident companies are taxed on income that is accrued in or derived from Gibraltar. Branches are taxed in the same manner as companies. Nonresident companies are subject to tax on Gibraltar-source income.
Corporation tax is imposed on a company's profits, which consist of business/trading income accrued in and derived from Gibraltar. Interest income (except for banks) and royalty income is not subject to taxation. Expenses incurred wholly and exclusively in the production of income may be deducted in computing taxable income.
The rate for companies is 10%; however, utility companies and companies that abuse a dominant position are subject to taxation at 20%.

Tax year

The tax year is 1 July to 30 June. Companies are subject to tax in their accounting period; if the accounting period exceeds 12 months, it will be divided into two periods.

Capital gains tax

There is no capital gains tax in Gibraltar.

Losses

Trading losses may be carried forward indefinitely provided there is no change of ownership in the company and no major change in the nature or conduct of trade within a period of three years.

Dividends

Dividends are not subject to taxation.

Alternative minimum tax

There is no Alternative minimum tax in Gibraltar.

VAT

There is no Value Added Tax in Gibratar.

Withholding tax

In Gibraltar dividends, interest, royalties, technical service fees are not subject to withholding tax.

Other taxes and duties

There is no Real property tax, Transfer tax, Inheritance or estate tax in Gibraltar. There is only Social security contribution. Employer contributions are payable on a weekly basis up to a maximum of GIP 32.97 per week. Employee contributions are payable on a weekly basis, up to a maximum of GIP 25.16 per week.

Stamp duty

Stamp duty is charged at a fixed rate of GIP 10 and applies on the initial creation of share capital or subsequent increase and on immovable property located in Gibraltar.
Stamp duty applies to purchases of Gibraltar real estate, as follows:
Property Cost, GIP Rate
Under 200,000 0%
200,000 – 350,000 2% on the first 250,000 and 5.5% on the next 100,000
over 350,000 3% on the first 350,000 and 3.5% on the excess

Government fee

The annual license fee payable by a Gibraltar Non-Resident Company is GBP£55 plus GBP£20 for lodging an annual return and accounts.

Foreign exchange control

There are no exchange controls in Gibraltar. Residents and nonresidents may maintain accounts denominated in foreign currencies.

Double Tax Agreements

Gibraltar has 19 tax information exchange agreements (TEIA):
Australia, Austria, Belgium, Denmark, Faroe Islands, Finland, France, Germany, Greece, Greenland, Iceland, Ireland, Netherlands, New Zealand, Norway, Portugal, Sweden, United Kingdom, United States.

Anti-avoidance rules

Anti-avoidance rules are as follows:
Transfer pricing: There are no specific transfer pricing rules, but the tax authorities can apply a general anti-avoidance provision if an arrangement is deemed to be artificial or designed to reduce tax. Under a clause for connected parties, where a transaction is deemed not to be at arm’s length, allowable deductions are restricted to the lower of the amount of the expense, 5% of gross turnover or 75% of net profits (pre-expense). Where interest is paid at a non-commercial rate, the excess is disallowed for tax purposes.
Thin capitalization: Interest paid is deemed to be a dividend where the debt-to- equity ratio exceeds 5:1 and the interest is paid to a connected party that is not a company, or interest is paid to an arm’s length party where the loan is secured by assets belonging to a connected party that is not a company.
Controlled foreign companies: no
Other: Where an individual transfers assets abroad and this gives rise to income to a nonresident person that can be, now or in the future, enjoyed by an ordinarily resident taxpayer, the income of the nonresident will be taxed on the ordinarily resident taxpayer unless it is a bona fide commercial transaction and the purpose is not to avoid tax. The general anti-avoidance provisions also may apply.
Disclosure requirements: There is a duty to notify the tax authorities about arrangements that reduce tax.

ACCOUNTS

Filing of accounts

All limited companies (except those which are non-profit making) are required to file accounts at Companies House in respect of each financial year. This requirement follows the provisions of the EU fourth and seventh company law directives. There are, however, significant exemptions afforded to both small and medium sized companies.
If the company qualifies as a “small company” an abridged balance sheet is permissible and there is no requirement for an audit or profit and loss accounts. To qualify as a small company two of the following three requirements should be met:
  • Net Annual Turnover below £4.8 million
  • Total Balance Sheet value below £2.4 million
  • The number of employees should not exceed 50

A medium sized company is required to file a Profit and Loss, Balance Sheet and an Auditors report, to qualify as “medium company” two of the following three requirements should be met:
  • Net Annual Turnover must not exceed £19.2 million
  • Total Balance Sheet value below £9.6 million
  • The number of employees should not exceed 250

A large company must file Profit and Loss Statements, Balance Sheet and an Auditors Report.
The accounts are publicly accessible.

Filing due dates

The accounts must be filed within 13 months of the financial year end in the case of a private company and 10 month of the financial year in the case of a public company. If the financial year-end is the company’s first then the period allowed is the greater of 18 months from the first anniversary of the incorporation of the company or 13 months from the end of that financial year. If the filing requirements are not complied with the company is liable to pay a fixed penalty.

Annual Return

Each company is required to submit an annual return to the Registrar of Companies which contains details of the shareholders, directors and the capital of the company.
The annual return should be submitted on the anniversary date, if submitted after the 31st of that year a penalty will be imposed.
The law allows the Registrar to strike from the register of companies any company, which has not filed annual returns in the previous three calendar years.

Tax returns

A tax return must be submitted within six months from the accounting year end. Advance payments of tax based on 50% of the previous year’s tax must be made by 28 February and 31 August. The final payment (or refund request) is due when submitting the tax return, i.e. within six months of the accounting year end.
There are surcharges for the late payment of tax and penalties for the late filing of tax returns and for errors or omissions in the tax return/payment.

SPECIAL PURPOSE ENTITIES

Trusts

Trust management is regulated by Gibraltar Trustee Act, which has been derived from English trust legislation. Gibraltarian trust legislation also includes the Perpetuities and Accumulations Ordinance, the Trustee Investments Ordinance, the Bankruptcy Ordinance and the Trusts (Recognition) Ordinance.
Under the Bankruptcy Ordinance there is statutory protection against creditors for asset protection trusts, providing the settlor is an individual, and was not insolvent at the time of the disposition, nor became so as a result of it.
Trust documents are in English, and there are no requirements for registration except that Asset Protection Trusts must be registered with the Registrar of Dispositions. There is no stamp duty. The normal perpetuity period of a Gibraltar trust is 100 years. There are no restrictions on the accumulation of income during the perpetuity period.
Legislation has not yet been introduced to provide for purpose trusts.
Trusts created by a non-resident of Gibraltar for non-resident beneficiaries are exempt from all taxes in Gibraltar. They need not be registered and thus are confidential and private arrangements.

Advantages of trusts:
  • Confidentiality - Except for Asset Protection Trusts there are no filing requirements and no information needs to be disclosed to any authority as long as no liability to Gibraltar tax arises.
  • Tax benefits - As long as the trust is established by a non-resident, has no Gibraltar resident beneficiaries and derives no income locally (other than bank interest), no tax will be charged on the trust's income. No stamp duty is payable on the transfer of any assets held by such a Trust except in the case of real property situate in Gibraltar. This enables trust assets such as bank deposits to be held in a Gibraltar based bank without the trust incurring any liability to income tax in Gibraltar.
  • Residence of Trustees - Trustees of Gibraltar trusts can be resident in Gibraltar without affecting the tax status of the trust. For the trust to be tax exempt the terms of the trust must expressly exclude residents of Gibraltar as persons who either are, or may become beneficiaries.
  • Perpetuity and Accumulation periods - Under Gibraltar law, both the perpetuity and accumulation periods of a Gibraltar trust are 100 years.
  • The assets of a Trust can be held in any currency.
  • There is no requirement to file accounts or to register a trust (other than an Asset Protection Trust).


Structure and control :
Settlors :
The Settlors are the persons placing the assets into the Trust Settlement. Upon the instruction, the first Trustees can declare the Settlement, in which case the Settlors will not be named. The Trustees may be a "family" Company formed especially for that purpose and the Trust assets will be the net assets of that Company. However, more frequently the Trustees would hold the shares in an underlying Company.
Beneficiaries
The Trustees are required to administer the property for the benefit of such persons (the 'Beneficiaries') as are named in the Trust Deed. Beneficiary has recourse in law to compel the Trustees to act in accordance with the terms set out in the Trust Deed. At the beginning of the Trust and at any time during the life of the Trust when any changes are planned, a full list of Beneficiaries with supporting due diligence documentation in respect of each shall be provided.
Trustees
An individual or a trust corporation may be appointed as trustee. However it is usual in the case of individual trustees for at least two trustees to be appointed to avoid a situation where a trustee dies and the trust is left without a trustee. A trust corporation acting as a trustee must have a license to operate as a professional trustee granted by the Financial Services Commission pursuant to the Financial Services Ordinance.
Counsellors /Protectors
The Gibraltar trust usually grants wide powers to the trustees which would include the power to add beneficiaries, exclude particular persons or class or classes of persons from being added, and a provision to change the proper law and residence of the trust should this be necessary or desirable for any reason.
It is possible to appoint a Protector, sometimes known as a Counsellor, whereby the trustees can only exercise certain powers contained in the trust deed with the written consent of the Counsellor
The powers which may not be exercised without the consent of the Protector usually include the addition and removal of beneficiaries. The Protector may also been trusted with the power to remove and appoint trustees, change the proper law of the trust and its place of administration.
The trust deed may specifically set out the powers of the Protector or alternatively a separate document to this effect may be executed by the trustees and the Protector and make provision for the appointment of an alternative Protector usually in the event of his death. To avoid any possible adverse tax consequences, which may result if the Protector (or the Settlor) was seen to be controlling the Trustees, it is advisable to limit the powers given to the Protector to approval of defined actions of the Trustees.

Discretionary Trusts :
The Discretionary Settlement gives the Trustees the discretion of the amount and the timing of distributions of income or capital. It allows the Trustees to accumulate and take account of any changes in the situation of a given Beneficiary and to plan distributions to minimise tax.
Whilst the Trustees have this discretion, it is normal for the Settlor to indicate to them his wishes via a formal "Letter (or Memorandum) of Wishes". The Trustees are not legally bound to follow these wishes but most Trustees would be reluctant to deal with Trust property in any other way. The Memorandum of Wishes may be amended during the lifetime of the Settlor to take account of any changes, such as the birth of a new Beneficiary.
A Trust may be revocable but, if so, it loses many of its tax and asset protection advantages.
Advantages of discretionary trusts:
Assets transferred into Trust no longer form part of the estate of the Settlor so that:
  • The Settlor would not be taxable on the income and/or capital gains generated by those assets.
  • On death probate Inheritance Tax would be avoided. The Trust provides a speedy, confidential, flexible and orderly mechanism for the distribution of the trust assets.
  • The Trust assets are substantially protected against claims from creditors of the Settlor if the Trust was settled properly and in a timely manner and did not result in the bankruptcy or financial difficulty of the Settlor.
  • The Trustees have the legal ownership but under very strict rules, which presume that the beneficial ownership and use remain with the Beneficiaries, whilst during his lifetime the Settlor retains a significant degree of influence.
  • The Trust should not be subject to any form of taxation if properly structured.
  • It is possible, however, that the setting up of the Trust will result in tax consequences for the Settlor and/or the Beneficiaries in their country of residence.


Asset Protection Trust :
‘Asset Protection Trusts’ refers to a form of trust planning that is designed to place specific assets beyond the reach of potential future creditors. The legislation passed in Gibraltar by way of amendments to its Bankruptcy Ordinance aims specifically at transfers into trusts made by non-resident individual settlors, and provides for a system of confidential registration with the Gibraltar authorities.
The amendment to the Bankruptcy Ordinance made in 1990 means that certain dispositions shall not be voidable at the instance of or upon an application by any creditor or settlor provided certain conditions are complied with.
The features of an Asset Protection Trust
The typical form of Asset Protection Trust is a discretionary trust (with the Settlor as one of the beneficiaries). An Asset Protection Trust often provides for the accumulation of income during the term of the trust. It is quite important that the trust be irrevocable, the assets are situated offshore, and that everyone who has control of the assets is located offshore. The Settlor should not reserve for himself the power to distribute trust capital or have the power change the governing law/trustees/location of the Asset Protection Trust.
The risks involved in an Asset Protection Trust
Anyone transferring, or assisting in the transfer of assets to an Asset Protection Trust when the Settlor is insolvent, will face the possibility of both civil and criminal charges. It is recommended that an Asset Protection Trust be considered where a domestic trust would otherwise be used as part of the estate plan.
The settlement of assets will not be voidable by any creditor to the settlor provided that:
  • The settlor is an individual.
  • The settlor is not insolvent at the date of the settlement.
  • The settlor does not become insolvent in consequence of the settlement before the settlement is registered.

An application for registration of the settlor must specify:
  • The name and address of the trustee.
  • The name of the settlement.
  • The date of the settlement and its duration.
  • The settlor's country of residence.

The application must also be accompanied by undertakings from the trustees that:
  • The settlor has completed forms of enquiry administered by the trustee.
  • The trustee has completed all reasonable enquiries necessary to substantiate the information provided by the settlor.
  • The settlor has sworn an affidavit confirming that he or she is not insolvent.

Applications to register are made by the trustee, which must be a company of a permanent place of business in Gibraltar and authorized by the Financial Services Commission to act as trustee of protective settlements.
The income of a trust created in Gibraltar by and on behalf of a non resident of Gibraltar, is exempt from Gibraltar tax even if the trustees are resident in Gibraltar. This particular provision requires that no Gibraltarian or resident of Gibraltar is or may be a beneficiary under the trust and that the income of the trust either accrues or derives outside Gibraltar. Exemption is also being granted from estate duty in respect of any interest held by non residents of Gibraltar in a Gibraltar trust.

Emigration of trusts
Gibraltar trust law allows the trust to include a clause enabling a change of the proper law of the trust and of its place of administration.

Underlying Offshore Company
An underlying company is frequently utilized as a vehicle to hold assets of the trust. The company acquires assets such as real estate, marketable securities, pleasure yachts or any other investments or businesses and it is the shares in the company that are entirely owned by the trust. This maximizes the flexibility and may enable the client to exercise a greater degree of control over the administration of the assets.

Foundations

The Gibraltar Private Foundation Ordinance 1999 establishes a regime for foundations as 'vehicles for the holding of private assets endowed on the foundation for the benefit of identified persons or classes of persons', and is effective from 1st January 2000.
Foundations may not carry on trading or financial services business.
A foundation is established by a deed of endowment or by a deceased person's will, either of which constitute the Memorandum of Endowment.
A foundation has officers, with prescribed duties, a secretary, a registered office in Gibraltar, and a supervisory board.
A foundation must be registered with the Registrar, who must be sent an annual return. A Register must be kept at the registered office with details of the various parties associated with the foundation.
A foundation may re-domicile into or out of Gibraltar.

Companies limited by guarantee
Gibraltar has its own type of "Foundations". The equivalent of a Foundation is the Company Limited by guarantee not having a share capital or a Company Limited by Guarantee and having a share capital.

Structure and control
Hybrid companies can provide for the shareholders and the non- shareholder members. Thus, the shareholders could be professional trust administrators, in whom could be vested all the voting and administrative powers, while the beneficial owners could be the non-shareholder members in whom would be vested all the rights to income and capital. By this means, control is divorced from beneficial interests.
The Articles of Association may have provisions for the appointment of some form of Protector whose approval must be obtained for the election of members and disposal of assets. The Protector should be an independent third party, known to the beneficial owners, so that he can both protect their interests and also advise the directors when so requested. Where it is inappropriate to appoint a Protector as such, it is possible to have a special class of "shares" whose holders exercise the same function as a Protector.

Confidentiality
Companies limited by guarantee (Foundations) allow for confidentiality without the need for bearer shares. In a Foundation the non-shareholder member still gets his membership certificate if he wants it, but if it is lost or stolen, his membership is unaffected. His identity is known to the company secretary, but it does not appear on any public record and is entirely confidential.

Incorporation of a Foundation in Gibraltar
To be incorporated in Gibraltar as a company limited by guarantee and to exercise the role of a Foundation a company has to comply with the following conditions:
  • It must be a company limited by guarantee.
  • That the name of the company finishes with the word "Foundation".
  • That the Memorandum of the company states that "the company is devoted to the maintenance, advancement and education of particular families, persons, causes or objects".
  • That the name of the company does not include the word "Charity" or "Charitable".
  • Minimum share capital of £2000 sterling.
  • That the company appoints a person in Gibraltar to be known as the Foundation Officer who may also be a director or shareholder of the company.

Protected cell companies

The Gibraltar parliament, the House of Assembly, passed a bill for a Protected Cell Companies Ordinance on 3 July 2001. Since November 2001, Gibraltar enables companies to be incorporated as a PCC or existing companies, if they provide so in their constitutional documents, to convert into a PCC.
Protected Cell Companies Act 2001 provides for a single company with individual parts, known as cells, which are kept separate from each other. Each cell has its own assets and is only liable for its own debts, not for the debts of any other cell within the company. This means that if one cell incurs a liability, the creditors of that cell will be unable to satisfy their debt from assets attributable to another cell.
Each Cell can be used for specific investment objectives or strategies, or for specific clients. The number of Cells that can be created under Gibraltar law is unlimited. The assets of a Cell are available only to the creditors and shareholders of that particular Cell.
Traditional investment fund structures such as umbrella or multi-class funds, whether established as companies or unit trusts, have always suffered from the risk of "contagion" between the different share classes or sub-funds. The risk is that losses attributable to one class or sub-fund may reduce or even extinguish the assets attributable to another.
Gibraltar is one of the several domiciles that provides solution to this problem. While the PCC was initially developed for the captive insurance industry it has also become a popular method of structuring hedge funds, property funds and private equity funds.

Distinguishing features of PCC
  • each share class is referred to as a cell with its own distinct name or designation;
  • the PCC has a core cell ("non-cellular assets") and one or more non core cells ("cellular assets");
  • there is a legal segregation of assets attributable to each non core cell. Hence cellular assets attributable to a cell of a PCC shall only be available to the creditors of the PCC who are creditors in respect of that cell and shall be protected from the creditors of the PCC who are not creditors in respect of that cell;
  • the name of a PCC shall include the expression "Protected Cell" or "PCC".


Consent of Commissioner or Finance Centre Director
A company may not be incorporated as a PCC, and an existing company may not be converted into a PCC, except with the written consent of the Financial Services Commissioner. A company which is a collective investment scheme authorised by the Financial Services Commissioner under the Financial Services Act 1989 shall be granted to be incorporated as a PCC. In contrast a company which is not required to be licensed or authorised under the Financial Services Act 1989 and 1998 may not be incorporated as or converted into a PCC, except in accordance with the terms and conditions of the written consent of the Finance Centre Director.

Redomiciliation into Gibraltar
Hedge funds with registered place of business in a relevant foreign state are able to move into Gibraltar by continuation of their legal form without liquidation and fresh registration, if redomiciliation is provided for in the constitution documents and if permitted to do so by the foreign jurisdiction. Redomiciliation into Gibraltar enables hedge funds to convert into a PCC: in a first step, the hedge fund has to move its domicile by continuation of its legal form into Gibraltar and upon successful redomiciliation he can start converting into a PCC.

Experienced investor fund (EIF)

The Financial Services (Experienced Investor Funds) Regulations 2005 (the EIF Regulations) define Experienced Investors as investors who have a net worth of €1m aside from their residential property, individual investors whose normal business activity includes investment related activity (i.e. investment professionals) or investors who invest a minimum of €100,000 in the fund. These definitions are individual and not cumulative so it is sufficient for an investor to invest €100,000 for it not to have to prove any of the other conditions. There is no minimum or maximum number of investors required for an EIF. Indeed, the Gibraltar Companies Act was amended to allow a fund to trade as a private company even with more than 50 shareholders.

Experienced Investor Fund Structure Types
EIF´s can be structured in 2 ways:
A single fund : involves the creation of an individual fund (open-ended or closed-ended) as a specific purpose investment vehicle. The fund is used until the specifically tailored purposes of its creation have been achieved. After that the fund can be closed and the assets distributed to the investors of the fund.
An umbrella fund: it is set up as a Protected Cell Company under the Gibraltar Protected Cell Companies Act 2001. Each cell can be used for specific purposes or clients until the purpose is achieved. Then the specific cell can be closed and the assets distributed to the cells investors. Under Gibraltar law there is no limit on the number of cells created.

Documents and Agreements
An EIF must have the following documents:
  • offering document (Private Placement Memorandum)
  • Fund Administration agreement
  • Custodian Agreement
  • Directorship Agreement (signed by each Director)
  • Investment Management Agreement (or investment Advisory Agreement)
  • Depositary Agreement relating to a Paying Bank or Custodian
  • Letter of Intent from an Auditor


Share capital
The authorised share capital of the EIF might be divided into Founder Shares and Participation Shares. The Fund´s ordinary shares would be designated Founder Shares carrying voting rights in the Fund. These would be held by the Investment Manager / Promoter acting in a fiduciary capacity. Founder Shares would have no right to participate in the risks or rewards of the Fund.
Redeemable preference shares issued to the investors of the Fund would be designated as Participation Shares. They would give their holder the right to participate in the risks and rewards of the Fund, but not to vote at General Meetings of the Fund or to change the objectives of the Fund.

Promoters
Unlike in other jurisdictions there is no requirement for the promoters of the fund to be licensed. It is sufficient for the fund administrator to perform the normal know your client and client acceptance procedures for them to be able to set-up a fund in Gibraltar. The reason for this is that each fund must have two directors who are authorised by the Financial Services Commission ("FSC") to act as EIF directors.

Management
Many funds in Gibraltar do not have investment managers and are managed by their boards of directors. An EIF, however, may choose to appoint an investment manager in Gibraltar or in any other jurisdiction. It is sufficient under Gibraltar law that the investment manager or adviser is licensed or entitled to give investment management/advice in its home jurisdiction. An investment manger or advisor license in Gibraltar is a full European Union license. As such, the normal capital adequacy requirements that exist in other European jurisdictions also apply to the Gibraltar managers or advisors. A Gibraltar investment manager/advisor must have a physical presence and staff in Gibraltar.

Depositaries
An EIF that is open ended must have a depositary. The fund may also appoint brokers to assist with their trading activity. Neither the depositary nor the brokers need be in Gibraltar although in the case of Protected Cell Companies "PCCs" there may be some advantage to having these in Gibraltar, as there is more certainty that a Gibraltar court will enforce the statutory segregation of cell assets than a non-Gibraltar court that may not be as familiar with Protected Cell Companies legislation.

Prospectus
An EIF must issue a prospectus that is consistent with industry standards and which will allow an investor to make an informed investment. The prospectus/private placement memorandum (PPM) must state the fees that are chargeable out of the property of the fund, the investment objectives, borrowing or investment restrictions, if any, and the risks associated with such investment. The prospectus/PPM is a private document in all cases except if the fund is incorporated as a public limited company. However, there is no legal requirement to use a public limited company for a fund in Gibraltar even if the fund has more than 50 investors.

Authorisation and Regulatory Requirements
The authorisation process for an EIF includes the following steps: to incorporate, appoint its service providers, produce its prospectus and hold a board meeting to launch itself as a fund. There is no regulatory pre -approval necessary for launch. Within 14 days of launch, a fund must notify the FSC of the launch along with a copy of the prospectus, the memorandum and articles, a legal opinion from Gibraltar counsel stating that the fund was set-up in accordance with the EIF regulations and other relevant legislation, a form signed by the administrator and the license fee of £2,500. It means that effectively there is no regulatory down time and the fund may be launched as quickly as necessary. The FSC will then review the submitted documents and may come back with questions or comments. Going forward it is necessary for an EIF to ensure that it complies with the EIF regulations. Breach of certain regulations requires the directors and/or administrator of the fund to notify the FSC.
The fund's board must include two Gibraltar-based directors who are authorised by Gibraltar's regulator, the Financial Services Commission (FSC), to act as directors of such funds. This requirement is necessary to ensure that there is sufficient substance in Gibraltar to avoid the fund being tax liable in any other jurisdiction. An EIF must have an authorised Gibraltar-based administrator and it must be audited annually by a Gibraltar-registered auditor.
Custody of the assets is not restricted to Gibraltarian service providers and the fund's assets may be kept with any authorised depository or broker that is deemed acceptable to the FSC. In certain cases, however, there are distinct legal advantages to using a Gibraltar-based custodian.
There are no restrictions on borrowing or owning investments. A fund may invest in any class of investment and at any percentage given that this is a fund that is targeted to experienced investors who are informed and are able to bear the risks of such investments. The fund may, however, impose certain restrictions on itself. These are disclosed in the prospectus.

Taxation
Gibraltar funds may obtain an exemption from the Commissioner of Income Tax on any tax on investment income. There is no capital gains tax, inheritance tax, wealth tax in Gibraltar. There is a stamp duty of £10 on the creation of share capital of a company and on any increase in share capital. Furthermore, there is no tax in Gibraltar on dividends from quoted securities or on income from trading listed securities. A fund may find it more beneficial not to apply for the certificate of exemption from the Commissioner of Income Tax in certain cases and to rely on the regular internal tax regime of Gibraltar which will invest in the majority of cases not tax any income or gains earned by the fund. The reason for this is that Gibraltar, being part of the European Union, can benefit from the European Parent Subsidiary Directive. This means that payments to a Gibraltar company from subsidiaries in certain European jurisdictions (such as Luxembourg) will not be subject to withholding tax.
There is no withholding tax on payments from a Gibraltar fund to its non-Gibraltarian investors.
The valuation methods for EIFs must be disclosed within the prospectus. There are no particular rules on valuations other than their disclosure. Although any internationally accepted accounting standard might be used for the audit, many Gibraltar funds are audited under IFRS or UK GAAP.

GAMBLING

Online gaming

Gibraltar began offering licenses to online gaming sites in 1998.
Gibraltar is a UK overseas territory and is part of the EU. It is now recognized as part of the European Economic Area (EEA) for the purposes of gambling legislation in the UK (UK Gambling Act 2005).
Under the Gambling Act 2005, Gibraltar can issue the following licenses: bookmaker’s license, betting intermediary’s license, gaming operator’s license, gaming machine license, lottery promoter’s license, pools promoter’s license and remote gambling license.
Currently the country licenses sportsbooks, online casinos, and betting exchanges. Gibraltar primarily licenses operators with a proven track record and requires software testing as part of the process. There are no start-up licensing fees, but there is an annual fee of £2,000.
The tax rate for fixed-odds and betting exchange operations is 1% of turnover with the gaming tax capped at GPB 425,000 per year. For Internet casinos, the gaming tax is at 1% of the gross profit with the same maximum cap as fixed-odds betting.
All gaming operations in Gibraltar require licensing under the Gambling Act 2005. Remote Gambling licences, including for telephone and internet betting, are issued by the Licensing Authority.
The Gibraltar Regulatory Authority (http://www.gra.gi/index.php?site=gambling), in turn, is the Gambling Commissioner under the provisions of the Gambling Act 2005. The Act grants the Gambling Commissioner powers to ensure that licensees conduct their operations in accordance with their licenses and in such a manner as to maintain the good reputation of Gibraltar.
The Licensing Authority will only consider licensing blue chip companies with a proven track record in gaming, licensed in a reputable jurisdiction, of good financial standing and with a realistic business plan. Licenses are generally difficult to obtain. As at 1st August 2009 there were twenty licensed operators.

Principal conditions and licensing requirements

Advertising
The licensee shall ensure that all advertising, promotion and sponsoring activity of whatever type and through whatever medium (including the internet) with regard to the gambling activities shall be truthful and accurate. It shall be exclusively targeted at adult players and shall therefore not be designed to appeal in any way to minors. The licenses are issued on the basis that the advertising and promotion of gambling activities can only be directed to citizens of nations in which it is not illegal for such activities to be undertaken and that the licensee will not provide gambling services where the provision of such services would be illegal under the applicable law.

Payout of prize money
The licensee shall have adequate financing available to pay all current and reasonably estimated prospective obligations in respect of prize payouts and to ensure there is adequate working capital to finance on going operations. The Licensee shall pay winnings and account balances to registered players in accordance with clearly established arrangements agreed to with the customer.

Customer privacy and data protection
Licensees are required by the Licensing Authority to obtain the following basic personal information with regard to all prospective customers: full name; residential address; date of birth. Upon obtaining the required information, the licensee is entitled to deal with the customer as a registered player.

Gaming License Costs and Gaming Taxes
  • There is no start-up licensing fee in Gibraltar, however there is a £2,000 annual fee for maintaining the license.
  • Fixed odds and betting exchange operations are taxed at 1% of total turnover with a cap of £425,000 per annum. The minimum annual tax payable is £85,000.
  • Online casinos are taxed at 1% of the gross product with a cap of £425,000 per annum.
  • Gibraltar non-resident companies need not be registered for tax purposes and therefore do not pay capital gains taxes, estate taxes, VAT, wealth taxes or gift taxes.


Accounts and audit
The bank accounts into which any customers’ funds, stakes, wagers, prizes or other monies are received, held or paid out from shall be controlled by the Company. The operation of any credit card merchant account used in the course of the business shall be fully and effectively controlled by the Company, maintained in Gibraltar with the prior approval of the Licensing Authority.
The Licensee shall be required to produce audited accounts to the Licensing Authority each year during the License period and maintain its financial records in accordance with the applicable law (the Companies Act, the Companies (Accounts) Act and Companies (Consolidated Accounts) Act and any other applicable legislation).

Control
The Licensee shall be effectively controlled and managed from Gibraltar. The Licensee shall upon request by the Licensing Authority produce lists of key personnel (with CV's or such other information as is reasonably appropriate) including shareholders, directors and executive managers involved in the management and operation of the Licensee's business in Gibraltar.

Anti money laundering requirements
The Licensee shall comply fully with all obligations in respect of any suspicious transactions in respect of money laundering. The Licensee shall fully understand its obligation under the Gibraltar Criminal Justice Act and the Anti Money Laundering Guidelines published by the Gambling Commissioner of Gibraltar.

International law relations

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Party to the Hague Convention (Apostille) Legal system Double tax treaties network OECD member Offshore/onshore status according to the RF laws
Yes based on English Common Law No Yes

Public authorities and legal acts

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List of laws and regulations
Act name Scope of law
Companies Act companies
Companies (Accounts) Act accounts
Limited Partnerships Act limited partnerships
Protected Cell Companies Act protected cell companies
Income Tax Act income tax
Stamp Duties Act stamp duty
Gambling Act gambling
Tax treaties entered
Tax Exchange Information Agreement (TEIA) Australia, Austria, Belgium, Denmark, Faroe Islands, Finland, France, Germany, Greece, Greenland, Iceland, Ireland, Netherlands, New Zealand, Norway, Portugal, Sweden, United Kingdom, United States.
List of state regulatory authorities
Gibraltar Government https://www.gibraltar.gov.gi
Chamber of Commerce http://www.gibraltarchamberofcommerce.com/
Financial Services Commission http://www.fsc.gi/
Companies House http://www.companieshouse.gi/
Ship Registry http://www.gibmaritime.com/
Gibraltar Regulatory Authority http://www.gra.gi
Laws of Gibraltar http://www.gibraltarlaws.gov.gi

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