Gibraltar

Gibraltar Managed Companies

Tax Planning Jurisdictions

From 2011 all locally managed and controlled companies, no matter the location of their ultimate beneficial owners, became subject to the universal 10% corporate tax rate mooted originally by Chief Minister Peter Caruana in his 2007 Budget. 'Traditional' tax exempt companies have not been legal since 2010. Unlike the Isle of Man, Gibraltar 10% companies are not subject to VAT or indeed capital gains taxes. Unlike tax haven jurisdictions, accounts must not only be kept but lodged and audited to international accountancy standards. However, as a non-sovereign member of the EU Gibraltar has a number of difficulties where double taxation treaty protection is required (Gibraltar has none save for one with the UK) or where EU directive and regulation protection is sought as it is specifically 'black listed' by a number of EU jurisdictions including Spain.

Synopsis

Strategically important, Gibraltar was reluctantly ceded to Great Britain by Spain in the 1713 Treaty of Utrecht; the British garrison was formally declared a colony in 1830. In a referendum held in 1967, Gibraltarians voted overwhelmingly to remain British (Source CIA Factbook). Gibraltar is the only remaining colony in mainland Europe and still a source of dispute between Spain and the United Kingdom. Historically considered a tax haven but rapid moves – under EU pressure – were taken after 2007 to bring the territory more into line with the low corporate tax zones such as Cyprus and Ireland. The fact that Gibraltar is a full member of the European Union under Protocol 3 of the Treaty of Rome but is outside of it for the purposes of VAT can prove beneficial for certain business activities.

Star Ratings

Reputation

Corporate registration efficiency

4

Cost

5

Confidentiality

4

Local Banking facilities

4

Legal system

5

Political stability

4

3

gibraltar

Location

Gibraltar is located in the straits of Gibraltar, bordered by Spain to the north and by Morocco to the south. It has long been a key strategic location as it is the entry point into the Mediterranean Sea.

Relationship with the UK

Gibraltar is a full British colony with an autonomous local government – The local population mostly of Moroccan, Jewish, Indian and Spanish stock are fiercely proud of being British. English and Spanish are the two key local languages whilst Sterling is the local currency.

Treatment of Trusts in Gibraltar

Gibraltar Taxation of Trusts

  • the trust is created for and on behalf of a non-resident person; and
  • the income either accrues or is derived outside Gibraltar, or in the case of income received by a trust would, if it had been received directly by the beneficiary, not be liable to tax under the Income Tax Ordinance; and
  • save where a trust was created before 1/7/83, the terms of the trust expressly exclude residents of Gibraltar (as beneficiaries)

Vessel Registration

Gibraltar is one of the major vessel registration areas in Europe with competitive registration fees and local management facilities. All Gibraltar registered vessels have the right to fly the British 'Red Ensign' Flag but the fact that Gibraltar is not part of the EU VAT system can cause problems in certain circumstances. For more information please discuss with a SCF Consultant

Benefits

  • Pro-business environment with a 10% low corporate tax rate
  • No capital gains or inheritance taxes
  • Zero corporate taxes for non-resident companies
  • English speaking
  • No VAT
  • Excellent communications
  • Favourable treatment of overhead trusts
  • It is a common law jurisdiction
  • Company law based on 1929 UK Companies Acts
  • A full member of the EU since 1973
  • All major UK banks represented
  • Major vessel registration 'flag of convenience' area
  • Good confidentiality provisions
  • Open border with Spain for many years
Double Taxation Treaty Network

Gibraltar does not have a double taxation treaty network save for a limited treaty with the United Kingdom

Administration & Accountancy Service

Managed Companies

SCF Accountancy & Law can provide Gibraltar companies either in a resident or non-resident format. In the case of resident 10% tax companies these generally do avail of our management services as such are required to show that full and proper management and control takes place in Gibraltar

Set-Up & Annual Maintenance Fees

Please see the separate Gibraltar Managed Company Quotation Leaflet

The Ownership of Gibraltar Companies

'Overhead' Discretionary Trusts or Private Interest Foundations

For tax planning reasons, normally pertaining to anti-avoidance provisions in a beneficial owner's 'home' country or place of fiscal residence, and/or because of a need to 'ring fence' assets many clients owning a Gibraltar company (resident or non-resident) select to have it owned not by themselves but by an overhead discretionary trust or private interest foundation (PIF) normally located in a jurisdiction such as Panama or Liechtenstein (locally known as a Stiftung)

For more information on discretionary trusts and/or private interest foundations please refer to the separate information leaflets.