Gibraltar is well-known for being an attractive jurisdiction for businesses due to its favourable tax regime and benefits for international investors. This guide will explore the key aspects of corporate taxation for companies based in Gibraltar, providing detailed information on the benefits, procedures and obligations.
What are the Advantages and Disadvantages of Running a Business in Gibraltar?
The Rock offers numerous advantages to businesses, especially thanks to its robust legal framework and competitive tax regime.
- The standard corporate tax rate is 15%, one of the lowest in Europe.
- Interest and dividends are exempt from withholding tax, allowing companies to distribute profits without additional tax burdens.
- There is no capital gains tax in Gibraltar, making it appealing for companies involved in asset trading or investment.
- Gibraltar is a VAT free jurisdiction, ideal for businesses involved in cross-border trade or retail.
Beyond tax advantages, the thriving business hub offers strategic access to European and international markets thanks to its location at the gateway between Europe and Africa, its international airport with daily flights to and from the UK, and busy cruise and shipping port.
The territory’s commitment to technological progress and modern facilities also supports the requirements of various sectors. Furthermore, Gibraltar’s legal system is based on English common law, providing a stable and reliable framework. The territory also boasts a highly-skilled, English-speaking workforce, facilitating international communication.
However, there are also some disadvantages to consider. Gibraltar is a small jurisdiction with a limited domestic market, which could pose challenges for businesses relying on local commerce.
Secondly, Brexit has made Gibraltar’s status somewhat uncertain, which can be a drawback for businesses that rely on European trade. Additionally, the cost of setting up, such as high rental prices and professional service fees, can be a burden for some companies, especially in the initial stages. Lastly, political tensions with Spain can lead to disruptions for trade or travel at the border.
Procedures and Requirements for Starting a Business in Gibraltar
Setting up a company in Gibraltar is a relatively simple and quick process, but it requires following specific administrative procedures. The first step is to choose a business structure and name, and ensure that the latter is available on the Companies House Gibraltar database. Once the name is approved, the following documents need to be submitted to Companies House in accordance with the provisions of the Companies Act:
- Application to register a company
- Memorandum of Association
- Articles of Association
Companies are required to appoint a company director and a secretary, and they must have a registered address in Gibraltar.
Legal Requirements
Businesses in Gibraltar must comply with certain regulatory requirements.
- Depending on the type of business and its activity, you may need to apply for a business license according to the Fair Trading Act 2023. Applications should be submitted to the Gibraltar Office of Fair Trading.
- Register with the Income Tax Office for taxation and social insurance contributions.
- If you employ staff you must register with the Employment Service and comply with employment laws.
- Certain regulated industries require additional licences. These include financial or legal services, gaming and the sale of alcohol.
- Depending on the nature of the business, import duties may apply.
- Comply with filing and reporting requirements including annual returns, financial statements and audits.
- Comply with anti-money laundering requirements and data protection laws.
Types of Companies Benefiting from the Tax Regime
With a corporate tax rate of 15%, Gibraltar’s tax regime is particularly advantageous for certain types of companies. Financial services firms, online gaming companies, and asset management businesses benefit greatly from the favourable taxation system. These sectors are key drivers of the local economy, attracting international companies seeking to minimise their tax liabilities while enjoying a stable regulatory environment.
The Rock also offers start-up incentive schemes which enable companies to make significant savings in the first three financial years of operation. Alongside the taxation legislation and regulatory framework, these schemes make Gibraltar an attractive location for many businesses in the tech industry as well as cryptocurrency and blockchain companies.
Is It Really Worth It?
For many businesses, setting up a company in Gibraltar is worthwhile due to its tax advantages and stable legal and regulatory framework. International companies looking to minimise their tax burden while having access to European markets find Gibraltar highly attractive.
However, it’s important to take into consideration the nature of the business and its goals. For example, local or smaller businesses that don’t benefit from these international tax advantages may find that the high cost of living and limited market may pose challenges. Basically, it’s essential to analyse your business model carefully before making any decision.
Examples of Companies Established in Gibraltar for Over 10 Years
Several successful companies have been based in Gibraltar for decades, particularly in the online gaming and financial services sectors. Companies like BetVictor and 888 Holdings have thrived thanks to the jurisdiction’s business-friendly approach, well-established regulation and favourable taxation, enabling them to grow rapidly.
These businesses have benefitted from Gibraltar’s stable legislative and fiscal environment, as well as access to an international talent pool. Their long-term success illustrates how Gibraltar can offer a prosperous environment for the right types of businesses.
Is Gibraltar a Tax Haven?
Contrary to popular belief, the answer is no. While Gibraltar offers significant tax advantages, it cannot be considered a tax haven in the traditional sense. Unlike tax havens, which are often criticized for lack of transparency, Gibraltar adheres to strict regulations and high international standards on financial transparency and anti-money laundering practices.
Gibraltar is a specialist onshore finance centre which complies with international obligations and tax information exchange. The territory has been granted white list status by the OECD (Organisation for Economic Co-operation and Development) and the FATF (Financial Action Task Force).
Companies operating in Gibraltar must follow strict rules and regulations, ensuring that they comply with high standards of transparency, accountability, and ethical practices.
Do You Need to Be British to Open a Company in Gibraltar?
No, you do not need to be a British national to set up a business in Gibraltar. Foreign citizens can establish a company provided they comply with local laws, regulations and the Company Act, such as having a registered office in Gibraltar and following relevant licensing procedures. Additionally, it’s recommended to use local professional services to ensure compliance with legal and tax obligations.
Sources for More Information
It’s very important to consult official and professional sources for accurate and reliable information on corporate taxation and setting up a business in Gibraltar. Below are some of our recommended references:
- Gibraltar Chamber of Commerce: A great starting point for businesses looking to set up in Gibraltar. They offer practical, industry-specific advice on business support and networking opportunities. www.gibraltarchamberofcommerce.com
- Gibraltar Financial Services Commission (GFSC) regulates the financial services industry in Gibraltar. www.gfsc.gi
- Companies House Gibraltar: Registry for companies, business and domain names, patents, trademarks, trusts and other groups. www.companieshouse.gi
- Government of Gibraltar: The official website provides information about taxation, regulations and government services. www.gibraltar.gov.gi
- Income Tax Office: Your go-to resource for income tax, corporation tax, national insurance and international tax compliance. www.gibraltar.gov.gi/income-tax-office
Conclusion
To sum up, Gibraltar has a business-friendly approach, providing a highly attractive tax regime and stable legal environment for international businesses. With low corporate tax rates, business incentives, clear regulations, and strategic access to European markets, it is a sought-after jurisdiction for companies in various sectors. However, it’s essential for companies to carefully analyse their specific business needs and objectives before making a decision, and seeking local expert advice is crucial to ensure compliance with requirements.
Last Updated on March 31, 2025 by Vanessa Kingwell