Establishing a Business in Gibraltar: A Comprehensive Guide
Gibraltar, a small British Overseas Territory situated at the southernmost point of Spain, has become a beacon for entrepreneurs and investors looking for a favourable environment to establish their businesses. Its unique position, both geographically and economically, offers a blend of advantages that are hard to find elsewhere. Our law office helps clients set up companies and businesses in Israel and around the world, including such notable locations as the Cayman Islands, various EU countries, and the UAE. In this article, we delve into the allure of setting up a business in Gibraltar, focusing on the process, types of companies, tax benefits, banking, and specific industries that find Gibraltar particularly attractive.
Why Gibraltar?
Gibraltar stands out for several compelling reasons:
Favourable Tax Regime: Companies in Gibraltar enjoy a low corporation tax rate of 12.5%. More significantly, Gibraltar companies are not liable to pay tax on income earned outside of Gibraltar. There’s also no Capital Gains Tax, Inheritance Tax, Wealth Tax, Capital Transfer Tax, VAT, or tax on savings and investment income.
Common Law System: Gibraltar’s legal system is based on the English model, providing a stable and familiar legal framework for international investors. The fact that Gibraltar is a small place means that the court system is not overly burdened and can deal with commercial disputes in a relatively quick manner.
Strategic Geographic Location: Situated at the gateway to the Mediterranean, Gibraltar offers strategic access to both Europe and Africa.
Establishing a Business in Gibraltar
The most popular choice for non-resident investors is a private company limited by shares, LTD. This structure is ideal for tax management and capital protection since Gibraltar does not impose corporate tax on income not earned within its jurisdiction.
The Process of Setting Up
Company Registration: Begin by registering with the Business Liaison Unit at the Ministry for Business. This one-stop shop simplifies the registration process, ensuring a seamless experience. Company incorporation can be done in as little as 5 days.
Buying a Shelf Company: For those under time constraints, purchasing a ready-made (shelf) company is a quick alternative, often taking less than a few days.
Remote Setup: Remarkably, the entire process can be initiated and completed remotely, offering top-level convenience for international investors who don’t actually have to be physically present in Gibraltar for the incorporation.
Cost and Maintenance
Gibraltar’s company formation and operating costs are competitively low. There’s no minimum capital requirement, though a minimum share capital of GBP 100 is mandated. Annual costs, such as license fees and tax requirements, are minimal, making it a cost-effective option for business owners.
Key Requirements for Company Setup
Registered Office: A physical address in Gibraltar is required.
Director and Secretary: At least one director and a company secretary must be appointed. Corporate directors are permitted.
Shareholders: A minimum of one shareholder is required, with provisions for corporate shareholders.
Annual Returns: Filing of annual returns and financial statements is mandatory, though requirements vary based on company size and activities.
Bank Account: It is a requirement to open a bank account in Gibraltar for your corporation. You can open an account at the Gibraltar International Bank and there are a handful of other private banks established in Gibraltar. It is recommended to speak to a corporate services provider to see what the right fit is for you. Ultimately Gibraltar is a business-friendly jurisdiction, so the process of setting up an account is not too complicated.
Target Industries
Gibraltar is particularly appealing for businesses in modern financial services and in particular companies operating in the Fintech/Blockchain space. This is due to the fact that Gibraltar is one of the few jurisdictions in the world who have set up a regulatory framework for distributed ledger technology and virtual assets (Crypto/Blockchain). Companies operating in these industries may be attracted to Gibraltar for the reputational benefits of being licensed in this industry. This has prompted major cryptocurrency exchanges such as the Israeli eToro to set up in Gibraltar. Additionally, a license to provide financial services handed by the Financial Services Commission in Gibraltar gives companies the right to provide financial services in UK markets without having to acquire a UK license, due to existing trade agreements.
Gibraltar also has a very strong and well-regulated gaming sector and many of the biggest players in the industry are set up in Gibraltar. A license to provide online gaming services issued in Gibraltar is highly respected throughout the world.
Conclusion
Setting up a business in Gibraltar presents an array of advantages for savvy investors and entrepreneurs. From its favourable tax regime and English legal system to the ease of company setup and strategic location, Gibraltar offers a compelling package for those looking to optimize their business operations and tax efficiency. Whether you’re attracted by the possibility of establishing a new company or purchasing a shelf company for immediate operation, Gibraltar provides a robust platform for your business endeavours in the European and global markets.
If you are a business owner and looking to do some offshore work Gibraltar might be the place for you. For more information and assistance please don’t hesitate to reach out to us.
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