Gibraltar has the advantage of being a member of the EU, which means that Gibraltar-licensed or auth...
Gibraltar has the advantage of being a member of the EU, which means that Gibraltar-licensed or authorised financial institutions can provide services throughout the EU and EEA without having to seek separate licenses or authorisation in the 'host member states.
The Gibraltar Financial Services Board, the regulator of insurance, banking, investment services, company management and trustee services, has already been established for 10 years in the centre. Gibraltar does not apply any Capital Gains Tax, Sales Tax, or Estate Duty on international companies. The main taxes applied in Gibraltar are Income/Corporation Tax and Withholding Tax. However, opportunities exist for non-resident non-Gibraltarian individuals and entities to either be tax exempt or substantially reduce their exposure to these taxes.
There are 22 banks in Gibraltar with £7bn in deposits and assets under management. Services include private banking, deposit/asset management, corporate bank-ing, securitisation and e-commerce.
The centre is constantly reviewing its financial regulation to keep up to date with international standards as well as make sure appropriate regulations are in place to expand its investment products and services.
A Protected Cell Companies Bill 2001 is expected to pass through parliament shortly. The new legislation is likely to boost captive insurance and fund management sectors. Gibraltar has 17 licensed insurance companies. These include captives, niche insurers and pan-European pensions.
New regulation has just been enacted which will help investment companies do business electronically. The Electronic Commerce Ordinance 2001 has been passed which has enabled legal recognition for transactions effected electronically.
The legislation will help facilitate the electronic transmission and storage of information as well as providing a framework for the accreditation of electronic signatures. It also regulates the activities and liabilities of service providers.
Gibraltar legislation must meet UK standards as well as international. As part of the EU, this means the jurisdiction must put into place the relevant directives that apply in this financial regulatory area. Those directives reflect the international standards of the Basle Committee on Banking Supervision, the International Association of Insurance Supervisors and the International Organisation of Securities Commissions.
However, now all investment companies can passport their services into other EU countries, following the agreement entered on 19 April 2000 between the UK and Spain regarding recognition by Spain of Gibraltar's right to claim competent authority.
Subject to certain conditions a company incorporated in Gibraltar or a registered branch of an overseas company may apply for a Tax Exemption Certificate. Companies based in the centre can obtain tax-exempt status if no Gibraltar residents have a beneficial interest in the share of the company and the register of members is kept in Gibraltar. Possession of such certificate will, in return for the payment of a fixed annual tax (between £200 and £300), exempt the company or branch from further tax in Gibraltar. Such companies will benefit from exemptions from corporate taxes, withholding taxes, estate duty taxes and stamp duty taxes. A Tax Exemption Certificate is issued for 25 years.
Alternatively a company can apply for Qualifying Company Status, which is subject to the same conditions as the tax exempt company. A company or registered branch holding such status will be liable to taxation on its profits at such a rate as may be prescribed on the granting of the certificate and not exceeding the rate of corporation tax, which currently stands at 35%. The prescribed rate will also apply to withholding tax. The rate of tax applied will depend on the type of activity the company engages in. Once issued, a qualifying company certificate is valid for 25 years.
Gibraltar's insurance legislation provides for the setting up of insurance captives. Captive insurance companies can be formed in Gibraltar as either Exempt or Qualifying companies and are able to take full advantage of Gibraltar's European Union membership to write direct business into the EU without the need to establish a presence in the countries where the risk is to be written.
Location: Gibraltar is a beacon which signals the position of the Strait of Gibraltar, the narrow neck which separates Europe from Africa and provides the only link between the Atlantic Ocean and the Mediterranean Sea
Regulatory contact: Financial Services Commission, PO Box 940, Suite 943 Europort, Gibraltar
Tel: +350 40283
Fax: +350 40282
E-Mail: [email protected]
Partner Insight: For Blackfinch, the arrival of its IHT portfolio services was a 'natural evolution' in the group's offering and points to an established track record of returning cash to investors.
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