Ever since Gibraltar was captured by Britain in 1704, it became an extremely important strategic military base for Britain due to its geographical location and extraordinary landscape. These days Gibraltar is a financial hub for tax and effective financial planning within Europe. In other words Gibraltar has become a well-established European Financial Centre.
The qualitative characteristics that exist in Gibraltar that makes it an effective Finance Centre are in fact the same type of attributes that one can identify as fundamental to the promotion of wealth and business success:
RISK – ASSURANCE & PROTECTION
Gibraltar is a member of the European Union and implements EU directives including those in the area of financial services, although notably, the Legal system is based on English Common Law as well as EU law. Financial regulation is implemented and overviewed by the Financial Services Commission which was established in 1989 to provide strong investor protection.
In addition, Gibraltar has a very strong economy and stable political environment which can be evidenced by its high level of GDP per capita and strong currency.
Gibraltar is therefore a major finance centre which has been reinforced by its stable Government, well established legal and regulatory infrastructure that supports investor protection and provides credible assurances.
The regulatory and legal requirements for setting up companies, re-domiciling a fund, trust and/or re-locating, is flexible enough to allow the time and cost of such matters to be feasible and of value for money (VFM) when compared to other jurisdictions that provide the same level of protection.
UNDERSTANDABILITY & TRANSPARENCY
Because Gibraltar’s legal system is based on EU and UK Common law, regulations and requirements are generally understood by private and professional investors as well as financial institutions. Good business practices and corporate governance is supported by local regulation thereby providing a desirable level of transparency.
Gibraltar has a hybrid tax system namely, a system that taxes individual Gibraltar tax residents on their worldwide earnings, but when it comes to corporate bodies, a tax liability based on earnings accrued and derived in Gibraltar only.
This means that funds, corporate entities in general and Trust arrangements established in Gibraltar and whose activities are based outside of Gibraltar and whose income is sourced outside of Gibraltar, are exempt from any taxes.
Common customs tariff, turnover taxes, in particular VAT, interest Income and capital gains taxes are also exempt in Gibraltar.
With regards to corporate tax structuring purposes, Luxembourg, Netherlands, Denmark and Switzerland accept Gibraltar for EU Parent Subsidiary rules.
The flexibility provided by the absence of exchange control restrictions together with aforementioned tax exemptions and concessions for certain categories of companies, non-resident individuals and trusts administered for non-residents, coupled with Gibraltar’s financial stability creates many opportunities for business growth and wealth enhancement.
At Abacus, we can provide a wide range of services and can assist you with an understanding of the corporate vehicles and arrangements available in Gibraltar to assist your individual and corporate needs.
For specific details about Gibraltar’s legal, tax and accounting regulations and/or tax planning capabilities, please contact us. Additional general information can also be found on the following websites: