Gibraltar

A
- Andorra
- Anguilla
B
C
D
- Delaware USA
G
- Gibraltar
- Guernsey
H
- Hong Kong
I
- Ireland
- Isle of Man
- Israel
- Italy
J
- Jersey
L
M
N
P
- Panama
S
T
- Turks and Caicos
U
V
- Vanuatu

Geography, Population, Languages

The Gibraltar Peninsula is situated at the southernmost tip of Spain and faces North Africa some 32 km across the Straits of Gibraltar. The area of Gibraltar is 6.5 sq. km. and its population is about 30,000. It is a bilingual country where both English and Spanish are spoken, though English is considered the official language of commerce and law.

History, Political Structure and Law

Gibraltar has been a British Colony since 1704. In 1713 Spain formally ceded it under the terms of the Treaty of Utrecht. However, according to the Constitution of 1969, the Colony possesses its own authorised Government.

Gibraltar is politically and economically a stable country. Although Spain still maintains territorial claims over Gibraltar the British Government, having had a special interest in Gibraltar for so long, has undertaken not to place the people of Gibraltar under the sovereignty of another state without their free will and democratic consent. Britain maintains responsibility for defence and foreign affairs, but local matters, including company and taxation law, are the preserves of a locally elected House of Assembly. The House of Assembly consists of 15 democratic members and several unofficial members, a Prosecutor General and a Financial Secretary.

Gibraltar is a member of the European community, 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.

Economy and Infrastructure

Nowadays, Gibraltar is a financial centre of free entrepreneurial activity. Gibraltar enjoys a sophisticated range of banking, legal, accountancy and other professional services. All communications are excellent. Its main air links are with London, with several flights a day between the two, and there are flights to Europe and Africa. Gibraltar can also be reached via international airports in Spain.

Gibraltar continues to attract international banking institutions.

The currency is the Gibraltar Pound. It is on a par with the British Pound Sterling. Gibraltar has no exchange controls.

Company Incorporation

The Principal Corporate Legislation is The Companies Ordinance Act of 1984 based on the amended English Company Law of 1929. Main types of Company for trade and investment are: Non-resident Company, Exempt Company and 1992 Holding Company.

A Company incorporated in Gibraltar has the same powers as a natural person. The Language of legislation and corporate documentation is English.

Companies are subject to the following restrictions on trade and business activities: a Company cannot engage in activity associated with banking or insurance.

Incorporation procedure includes the submission of the Memorandum and Articles of Association and a Declaration of Compliance. The standard incorporation time for Gibraltar companies is 4 to 5 days.

As a matter of local company law the company maintains a registered office address within Gibraltar. Additionally this is a practical requirement in the case of non-resident companies and a legal requirement in the case of other types of Gibraltar Company.

Company names are subject to the following restrictions:

The following words and their associated activities are restricted: Association, Royal, Imperial, Trust, Trustee, Bank, and Assurance.
If the name includes words such as Group, Europe and International, special consent or a licence is required.

Gibraltar companies must have a minimum of one director. This may be a corporate body or an individual. Details of the directors appear on the public file, but confidentiality can be preserved by the use of third party directors. A Gibraltar resident company secretary must be appointed. Gibraltar companies must have a minimum of one shareholder, which may be a corporate body or an individual. Details of shareholders appear on the public file but anonymity can be preserved by the use of nominee shareholders. Gibraltar companies are not favourably structured for the provision of Bearer Shares.

The minimum authorised share capital is not limited, but normally companies with an authorised capital of GBP 2'000 are incorporated, as the minimum tax on share capital at the incorporation is GPB 10 (i.e. 0.5 % of GPB 2000).

Annual Taxation and Fees

Non-Resident Controlled Companies

The only type of tax-efficient Company available in Gibraltar at this time is the “Non-Resident Controlled” Company.

If a Gibraltar Company is able to establish that it is "Non-Resident Controlled", the Gibraltar Tax Authorities will treat such a Company as not liable for taxation in Gibraltar. Such "non-liability" may be determined on the following basis:

Beneficial Owners of a Company are non-residents of Gibraltar
Directors and Shareholders of the company are non-residents of Gibraltar
Company carries on business exclusively outside Gibraltar, does not establish a physical operational presence in this jurisdiction, and has no Gibraltar-source income.

In addition to the above, taxation is abolished on dividends paid by one Gibraltar Company to another Gibraltar Company. Taxation is also abolished on dividends and interest paid by a Gibraltar Company to a non-resident recipient. The requirement to withhold tax on dividends in accordance with Section 39 of the Gibraltar Income Tax Ordinance is abolished. It is also useful to note that there is no Capital Gains Tax or Inheritance Tax due in Gibraltar.

In other words, the "non-resident control" or "non-liability" of a Gibraltar company for tax in Gibraltar, may be determined on the basis that the Beneficial Ownership of the Company is non-resident of Gibraltar, and on the strict conditions that the company only carries on business exclusively outside Gibraltar and that it has no Gibraltar-source income.

Gibraltar companies are required to identify commencement dates for their financial years during the period 1st April to 31st March, and to file a Balance Sheet at the Companies Registry relating to their chosen year-long fiscal period within 13 months from the chosen financial year end. These Balance Sheets are required to be signed by the Directors of the companies, and there is no requirement for these Balance Sheets to be audited.

A non-resident company pays an annual tax of GBP200. Gibraltar corporation tax is demanded only in the case if company’s income is derived from or remitted to Gibraltar.

Gibraltar Tax Exempt Companies

Historically a Gibraltar company could apply for tax exempt status and be exempt from all taxes in Gibraltar even if managed and controlled from the territory. Due to changes in legislation exempt status is no longer required to avoid local taxation on income derived outside Gibraltar or investment income.

The exempt company is therefore being phased out and whilst existing exempt companies may preserve their status until 31 December 2010, no new companies can apply for tax exempt status.

An exempt company must pay an annual fee to the government for this status of GBP450.

However, following the Gibraltar government’s success at the EU Court of First Instance, Companies House anticipates that a new low rate corporate tax regime will be introduced in Gibraltar.

Gibraltar 1992 Holding Company

This type of company can be particularly advantageous for non-EU countries that are investing within the EU and are expecting to receive dividend income. A 1992 Holding Company pays 35% tax on all profits except on dividend income received. Dividends paid out of the 1992 Holding Company are subject to a 1% withholding tax when remitted out of Gibraltar or zero tax when held within Gibraltar.