Situated at the gateway to the Mediterranean, Gibraltar is a British Overseas Territory, a modern low-tax business and financial hub, and a welcoming jurisdiction for foreign investors seeking access to the European Union marketplace across a range of sectors.
Gibraltar is a small peninsula perched on the southern cost of Spain and is probably most famous for its eponymous “Rock,” which dominates the local landscape. Although just 6.5 square kilometres in size, Gibraltar has a population of approximately 30,000, GDP in excess of USD2bn and a per capita income of more than USD60,000, making it one of the wealthiest territories in the world.
The United Kingdom has had sovereignty over Gibraltar for more than 300 years, although the territory is now largely self-governing and has its own directly-elected parliament; the UK retains responsibility for Gibraltar’s foreign and defence policies. As such, Gibraltar’s legal framework is based heavily on English common law, a factor which has also contributed much to its economic success.
Naturally, given its strong links to the UK, English is the language of business and official life, although Spanish is widely spoken. Portuguese and Italian are also used in Gibraltar.
The local currency is the Gibraltar pound, which is on a par with the UK pound.
Finance and E-commerce
Although not a member of the European Union VAT area or common external tariff regime, Gibraltar has implementedmuch EU financial legislation and can apply Common European Passport regulations in the insurance, banking and fund management spheres. This has also had a hugely positive impact on the jurisdiction’s financial centre.
As well as the traditional “bread and butter” industries of banking and trust management, Gibraltar is also known as a popular alternative jurisdiction for investment funds and their managers. A significant insurance sector has also grown in Gibraltar, especially in the area of motor insurance.
A combination of favourable legislation and a benign tax regime has ensured that Gibraltar has become a leading jurisdiction for e-commerce, particularly in the e-gaming sector.
All companies pay corporate tax at 10 percent, except for energy and utility providers, who pay a 10 percent surcharge and are therefore subject to corporate tax at 20 percent. This has applied since January 1, 2011.
Under the Companies Act 1930, companies in Gibraltar are required to be incorporated as:
- A company limited by shares
- A company limited by guarantee with or without a share capital
- An unlimited company with or without share capital
A limited company may own assets, enter into contracts, borrow and lend money, as well as sue and be sued in its own name. The legal personality of the limited company is separated from its individual shareholders (owners). However, it is common practice for banks and landlords to seek personal guarantees from the directors, by making them personally liable for obligations should the business fail.
The liabilities of a company are distinct from those of its shareholders. The company is liable for its debts to the full extent of its assets, though this liability does not extend to the personal assets of its shareholders. A company also has perpetual existence, thus the ownership can pass at any time through the transfer of the shares. As such it is an ideal vehicle for expansion.
The first step when forming a Gibraltar Company is to ensure that the proposed name is acceptable to the Company Registrar. Once the name is approved, the following documents need to be submitted in accordance with the provisions of the Companies Act:
- Memorandum of Association
- Articles of Association
- Declaration of Compliance
- Notice of Situation of Registered Office
- Statement of Nominal Share Capital
At the time of writing, a registration fee of GBP50 is payable when the necessary documents are presented. Additionally, the Memorandum and Articles of Association must be embossed with the appropriate Stamp Duty.
It typically takes three working days to incorporate a Company in Gibraltar. However, a company may be incorporated within 24 hours for a fee of GBP100. Once incorporated, a Certificate of Incorporation is issued.
The services of a professional expert should be sought when incorporating a limited company, although this is not a strict requirement. The fee for such services is usually around the GBP400 mark.
Other company forms
As well as limited and unlimited companies, legislation in Gibraltar allows for the following types of entity to be formed:
- Sole Trader
- Limited Liability Partnership
- Protected Cell companies
- Non-profit Making Organisations