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.
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.
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.
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.
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.
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.
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.
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.
Just like in the UK, there are many types of legal forms available to a prospective entrepreneur to register a business in Gibraltar.
The list is far from being complete, but we would rather focus on the most common form – a limited liability company (Ltd).
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.
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.
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:
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.
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:
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:
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.
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.
The standard set of documents for registering a non-resident company without nominee shareholders includes the following.
An offshore company in Gibraltar must have a minimum authorised share capital of £100. In practice, it is usually £2,000 divided into 2,000 equal shares.
In some cases, CVs of directors, founders and beneficiaries and a detailed business plan are added to the supporting documents.
As Gibraltar is an overseas territory of the UK, the criteria by which your company can be classified as large or medium-sized have been borrowed from the British system.
You need an annual audit if
The current licence renewal cost amounts to
There are probably no business types for which a Gibraltar-registered company would be a problem. But in some countries and for some types of business, a Gibraltar-registered company might lead to some minor inconveniences.
For example, if you are supplying products to Europe, your partners will have to explain why VAT is not included in the specification and delivery notes. However, this is more a matter of communication and different approaches to taxation in different European jurisdictions rather than a real problem.
It is more challenging to work in the countries where Gibraltar is still blacklisted as an offshore. For instance, if you open a Gibraltar company to supply Chinese goods to Russia, your cargo and documents will be examined at customs with additional meticulousness as Gibraltar is still on the blacklist of the Russian Ministry of Justice and the Federal Tax Service despite Gibraltar’s good business reputation in the rest of the world.
We will work with you to find a customised solution for your immigration, second citizenship, business, tax and other needs.
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