How to Register Company in Gibraltar?
Gibraltar is a small area of about 6.8 km2 in the south of the Iberian Peninsula including the Rock of Gibraltar and the sandy isthmus. It holds a strategically important position over the Strait of Gibraltar and is a convenient seaport, which has belonged to Britain for over 300 years.
Spain has never ceased to dispute the ownership of Gibraltar (which can probably be explained by the strategic advantages). However, officially, the issue seems to have been resolved by the referendum of 2002, where the local population unequivocally voted in favour of the current status of their region.
Gibraltar is officially considered an overseas territory of the United Kingdom. It has certain elements of sovereignty: its own parliament and its own currency, the Gibraltar pound, the exchange rate of which is identical to that of the British pound. Gibraltar has its own corporate law mostly based on British legislation principles.
International entrepreneurs are attracted to Gibraltar, first of all, as a convenient incorporation jurisdiction for their business abroad. According to some data, the number of registered companies in this territory has reached 70,000, which is more than double the local population.
5 Advantages of registering company in Gibraltar
The incredible popularity of Gibraltar is attributed to the specific features of the local corporate and tax legislation as well as the authorities’ flexibility towards international businesses. Let us have a look at the main advantages.
1. Good reputation
Gibraltar is located in Europe and hardly differs from other modern European countries in terms of welfare, security standards, and the way of life.
Gibraltar is not a tax haven although it does offer international businesses several advantages which are typical of an offshore zone. The Gibraltarian government has done a lot of work to get Gibraltar on whitelists of major international organisations fighting against money laundering.
For instance, Gibraltarians no longer conceal the beneficiaries, founders and directors of companies registered on their territory. Instead, all the information is provided on a paid basis and only by the name of the legal entity.
2. Tax benefits
The vast majority of non-resident companies do not pay corporation tax in Gibraltar. If your business is resident, i.e. operates at the place of incorporation or has a current account with a Gibraltar bank, you will only pay 10% corporation tax.
Gibraltar has no value-added tax and zero tax on several positions that are usually taxed in other European countries.
3. Favourable corporate legislation
Using the basic principles of British common law, Gibraltarians regulate their business activities and set their own tax rates.
That is why a company registered in Gibraltar can always count on the protection of its interests in an independent court, and its activities are regulated by favourable corporate legislation, just like in the UK. However, the corporation tax rate is significantly lower than in Great Britain.
4. Free Enterprise
Almost no commercial activities of non-resident companies registered in Gibraltar require a licence. The only exception applies to companies in the banking, insurance and gambling sectors.
Besides, there are no requirements for tax residency of founders and directors of the registered companies. Both an individual and a legal entity can be a shareholder and director of the company. And if you need a higher degree of confidentiality, Gibraltar offers nominee services.
The authorised capital of the company is not regulated. A prospective entrepreneur is not required to pre-pay a significant part of the declared authorised capital to a bank account opened specifically for this purpose.
5. Easy company registration process
The application for business incorporation can be filed online, so founders do not even need to travel to Gibraltar. However, if you still need to come to the region and you have a Schengen visa, you will not need to obtain another permission to visit Gibraltar.
- International trade
- Online trading (via own platforms or marketplaces)
- Software development and other IT services
- Brokerage services
- Asset management through holding companies
- Online gambling.
A resident company, as the name suggests, does business at least partly in Gibraltar. To sell your goods or provide any services to local customers, you will need to obtain special authorisation from the authorities and find suitable premises for your business.
To obtain authorisation, you should submit an application in English where you will need to describe what you are planning to do and what resources you have to carry it out.
However, not only suppliers of goods and services register a resident company in Gibraltar; ship owners and charter airlines do it as well. The latter are attracted by the tax benefits which allow them to significantly reduce costs.
What legal forms are available to open company in Gibraltar?
Just like in the UK, there are many types of legal forms available to a prospective entrepreneur to register a business in Gibraltar.
- Sole proprietorship or sole trader
- Limited Liability Company
- Public Company
- Partnership
- Limited Liability Partnership.
The list is far from being complete, but we would rather focus on the most common form – a limited liability company (Ltd).
- The liability of the founders is limited to their contribution to the authorised capital.
- The amount of the authorised capital is not regulated in any way, but it is usually recommended to declare it in the amount of £1,000 (1,000 shares of £1 par value). Gibraltar’s limited companies have only registered shares; it is prohibited to issue bearer shares.
- A limited company can have only one director. An Ltd cannot have more than 50 shareholders. Both directors and shareholders can be individuals or legal entities who can be tax residents in any jurisdiction.
- A secretary should be appointed to administer your company. Under current regulations, the secretary must be a resident of Gibraltar.
Business taxes in Gibraltar
We would like to underline that Gibraltar companies pay tax based on the territoriality principle. To avoid paying corporation tax in Gibraltar, it is not enough to operate outside of Gibraltar. Your company cannot have a bank account in the place of incorporation, as payments from abroad debited into a current account in a Gibraltar bank will automatically be considered taxable income.
Special conditions apply to large non-resident companies whose business includes the organisation of online casinos and gambling.
- Such companies must obtain a licence which is valid for 5 years and is renewed every year for a fee.
- Gambling companies pay corporation tax even if they do not have a physical presence in Gibraltar. However, they have a special rate of only 0.15%.
Even with such a low corporation tax rate, as of the end of 2019, up to 40% of tax revenues to the Gibraltar budget came from online gambling businesses. Not surprisingly, the authorities take a responsible approach to issuing licences and have stipulated several stringent requirements for such companies.
Resident companies
Gibraltar resident companies pay corporation tax at the rate of 10%. There are exceptions to this rule: monopolies and utility companies pay a higher corporation tax of up to 20%.
Gibraltar is not part of the EU Customs Union, so it does not levy value-added tax. Besides, there are no:
- Capital gains tax;
- Inheritance tax;
- Dividend tax;
- Stamp duty on the transfer of company shares to a new owner.
Company reporting in Gibraltar
All businesses in Gibraltar receive a unique tax number during the registration process; it requires entrepreneurs to prepare and submit tax returns and annual accounts in a timely manner, regardless of whether the company has tax liabilities in the region or not.
Moreover, even so-called “dormant” companies, i.e. companies that have been registered but have not started their business activities, must still prepare and submit nil tax returns and nil accounts on time.
Like in the UK, Gibraltarian medium-size and large businesses must be audited every year.
Registering company in Gibraltar: step-by-step Guide
Opening a company in Gibraltar is relatively quick and inexpensive. The procedure is standard and very similar to registering a company in any other UK Overseas Territory.
The corporate law in Gibraltar stipulates the following requirements:
- Every company must have a registered office in the region;
- Only a Gibraltar resident can be appointed to the position of company secretary.
The law also requires that a company’s corporate and accounting records be kept at a registered office. Therefore, entrepreneurs first need to choose a registered office and hire a suitable company secretary.
Experienced businesspeople usually resort to the help of corporate lawyers, as a lawyer will not only find you an office and a reliable local secretary but also prepare the articles of association and shareholders’ agreement.
The remaining steps of the Gibraltar company registration process are:
- Choosing the company name and registering it in the Commercial Register;
- Collecting and preparing the supporting documents, including articles of association and information about directors, founders and beneficiaries;
- Paying the registration fee;
- Filling in and submitting the registration form (usually online);
- Adding the information about the new company to the commercial register. Data about the management, founders and beneficiaries is added to the corresponding databases. A certificate of incorporation is couriered to you.
The whole process takes no more than two weeks. It takes 2-3 working days for the authorities to consider your application and register it with the registry.
Registering company in Gibraltar with Imperial & Legal
Our advisors can help you incorporate a business in Gibraltar as quickly as possible. We are ready to assist you at every stage of the incorporation process, whether it is finding a reliable secretary or filling in online forms on the government website.
If you wish so, we can continue our mutually beneficial cooperation even after your company has been registered: for example, if you need to obtain a state licence or open a current account in one of the European banks. Imperial & Legal with headquarters in London practices a personalised approach; already during the first consultation, we are meticulously recording your circumstances and all your wishes. Get in touch to start a successful journey with us.
