Gibraltar is a peninsula with an area of 2¾ square miles situated at the southernmost tip of Spain. Gibraltar has been a Crown colony of the United Kingdom since 1713 when the Territory was ceded to Britain under the terms of the Treaty of Utrecht. Gibraltar is politically and economically stable and although Spain still maintains a territorial claim over Gibraltar the British Government has undertaken not to place the people of Gibraltar under sovereignty of another state without their free and democratic consent. This consent is most unlikely to be forthcoming.
Britain maintains responsibility for defence and international affairs but local matters, including company and taxation law, are the preserve of a locally elected Parliament.
Gibraltar is a full member of the European Union having been included as a member when Britain joined in 1973 but Gibraltar is specifically excluded from the European Common Agricultural Policy, the VAT system and the Common Customs Union.
Gibraltar enjoys a sophisticated range of banking, legal, accountancy and other professional services. Communications are excellent. The currency is, for all practical purposes, the British Pound Sterling (although local Gibraltar Pounds are also issued and trade on par with Sterling). The population is bilingual in English and Spanish which facilitates the translation of documents for the Spanish speaking market.
A new corporate tax regime was introduced in January 2011. All new Gibraltar companies formed from now will fall under the new rules. Any company incorporated in Gibraltar will be subject to a tax on profits of 10% under the ‘accrued and derived’ principle. In practice this means that if the business of the company is outside Gibraltar and the company is not trading with other Gibraltar residents it will not pay any tax in Gibraltar. However the company will still be “subject to tax at 10%”, even though not actually paying any tax. This together with the fact that Gibraltar is a full member of the European Union may give some real and perceived advantages. Gibraltar is now a “low tax not a no tax” jurisdiction.
Gibraltar companies have the following characteristics:
Taxation - Taxation is paid at a rate of 10% on any income accrued or derived in Gibraltar. Tax will not apply to non-Gibraltar sourced income. Should the company derive income both in and out of Gibraltar, only that proportion earned in Gibraltar will be subject to tax? In practice this means that most Gibraltar companies which do not trade with other Gibraltar resident companies or individuals will be able to operate tax free.
Shareholders - Gibraltar companies must have a minimum of one shareholder who may be corporate or individual. Details of shareholders appear on the public file but anonymity can be preserved by the use of nominee shareholders. Bearer shares cannot be issued.
Directors - Gibraltar companies must have a minimum of one director who may be corporate or individual. Details of the directors appear on the public file but anonymity can be preserved by the use of third party directors.
Annual Reporting - An annual return must be filed each year showing details of shareholders and directors. All Gibraltar companies must file annual accounts with the Registrar.
Timeframe - Companies can normally be incorporated within 5 days but on payment of a premium the incorporation time can be reduced to 24 hours. Ready-made companies are available for immediate purchase.
Restriction on Name and Activity - The following words and their associated activities are restricted: association, royal, imperial, trust, trustee, bank, assurance, group, Europe and international.
Local Requirements - As a matter of local company law the company MUST maintain a registered office address within Gibraltar.
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Diclaimer: The above is intented to provide a brief guide only. It is essential that appropriate professional advice is obtained. XpertAdvice will be glad to assist you in this respect. Please do not hesitate to contact us.