Starting a Business in Gibraltar: 7 Things You Should Know
Gibraltar is increasingly gaining prominence in Europe for other reasons besides the sandy beaches and Mediterranean climate.
Despite the global economic downturn that took the world by storm, Gibraltar’s economy proved to be as strong as the rock it boasts when it grew by 35% while other economies within the EU, and indeed the world , shrunk by a significant margin.
Its emergence as an economic hub is something that has been cooking for quite a while; an advanced regulatory environment, political and economic stability, just to mention a few.
According to pundits, fiscal prudence on the part of the Gibraltar government has seen Gib rise to position top 20 in the biggest GDP’s in the world.
Today, Gibraltar is home to a melange of industries including e-commerce, investment funds and other financial services. Online gambling and gaming industries are well established on the Rock certain that their future is well grounded.
If like many, you’ve been on the fence on establishing your business on the southern tip of Europe, here are a couple of things you should know.
#1- Establish a place of business if you’re a non-trading company.
A place of business is defined as a non-trading branch of your company and/or a contact point for your business entity. This is statutory .
You’ll have to submit a couple of items before having your company registered;
- Company name
- Country of incorporation
- Names of directors and secretaries
- The business address in Gibraltar
- Company’s constitutional documents
- Details of individual who transacts on behalf of the company
- Registration fee
#2- Tax Issues To Consider
A corporate entity that is resident in Gibraltar but whose profit generating activities are outside Gibraltar is not liable to pay taxes.
For tax purposes a company will be considered resident in Gibraltar when its control of business and management takes place in Gibraltar.
It’s worth noting that there’s not capital gains tax in Gib as well as no wealth tax or inheritance tax. Double taxation relief is also provided, that is, anyone getting taxed in other jurisdictions pays reduced taxes in Gibraltar.
#3- Employee Benefits
When establishing a company in Gibraltar it’s worth noting that high salaries are not necessarily the best option.
As an employer, offering your employees some benefits instead of high wages may offer tax benefits for both the employee and employer. However, it’s not obligatory for an employer to fund employee retirement benefits.
#4- Work Permits
If you or your employers are not from the European Economic Area (EEA), then a work permit is required. The EEA encompasses the European Union including EEA as well as Liechtenstein, Iceland, Norway and Switzerland. In all cases the employer is the one to apply for a work permit.
As a British citizen or Gibraltarian, you are permitted to work and live on the Rock without a residence permit. For individuals from EEA countries however, they have to prove that they won’t be a burden to the state before acquiring resident permits.
For non-EEA persons, a resident permit is only issued once a work permit has been produced which in turn may only be issued if it is proven by the employer that no Gibraltarian or citizen of an EU country is willing or able to carry out the job.
#5- Bank Account
All new businesses in Gibraltar are required to have a bank account. Home to internationally recognized brands, it shouldn’t be difficult to set-up a bank account.
There’s stringent anti-laundering legislation which makes it a complete necessity for the bank to carry out a background check on their clients and identify the source of their funds.
Getting a business bank account up and running may take quite a long time. It’s therefore prudent to start off early.
#6- Establishing a Base of Business
When signing a lease for new premises or acquiring land make sure you are well informed by contacting local surveyors or estate agents to ensure you get the best price as well as the best terms in your lease.
The counsel of an attorney will also be necessary.
Most leases will cover a 5-year period though this could be altered by the landlord for a price. Usually the landlord will ask for a deposit as a safeguard in case of non-payment by the tenant in future.
#7- Running a Bonded Store
If you’re in the export and import business you’ll want to apply for a bonded store license. With such a license you can transit goods through the Rock without having to pay any import duty.
A bonded store license will be applied to the Collector of Customs and has a validity period of a year.