|
As a member of the European Union, under Article 227(4) of the Treaty of Rome, Gibraltar is subject to all European Law (except for value added tax, customs purposes and the common agricultural policy). Gibraltar can already take advantage of European Union directives that facilitate cross border business within the European Union in respect of insurance, banking and investment services. Subject to notifying the FSC Commissioner, who must be satisfied that they meet certain criteria in accordance with the relevant EU Directive, 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 State. This is known as the "passporting" of financial services.
Financial Services in Gibraltar are regulated by the Financial Services Commission. The Commission is a statutory body corporate established by the Financial Services Commission Ordinance, 1989. It consists of the Commissioner, as Chairman, and seven other persons, four of whom shall have relevant experience in the United Kingdom and three of whom shall have relevant experience in Gibraltar.
The Commissioner, who is also the Commissioner of Banking and the Commissioner of Insurance, is the chief executive officer of the Commission and is charged with the responsibility of supervising institutions carrying on finance business in or from within Gibraltar. He is required to ensure that such supervision complies with any applicable obligation Gibraltar has as a constituent of the European Union and to establish supervisory standards which match those required by legislation and supervisory practice governing the provision of financial services within the United Kingdom.
Gibraltar is renowned as one of the best-regulated finance centres in the world, and as such, has been held out as a benchmark jurisdiction by both the former UK Foreign Secretary Robin Cook, and by Andrew Edwards in his Review of regulation in the Crown Dependencies.
Gibraltar has a common law framework, a highly-educated workforce, and UK-trained professionals. The unit of currency in Gibraltar is the Gibraltar Pound which is in monetary union with the United Kingdom pound sterling. There are no foreign exchange regulations in force and there is complete freedom to remit funds into and out of Gibraltar and to convert funds into other currencies.
Gibraltar offers a powerful tax package. It does not apply any Capital Gains Tax, Sales Tax or VAT, Inheritance Tax or Wealth Tax. In addition, in its 2006 budget, the Government abolished tax on certain types of investment income. There is no withholding taxes on dividends paid to non-resident individuals or on interest payments where the “situs” of the loan is outside Gibraltar. Gibraltar operates a territorial tax system so that in certain cases business activities which do not “accrue or derive” from Gibraltar are not taxable in Gibraltar. Advance rulings can be obtained to provide certainty. As a member of the EU, directives such as the Parent/Subsidiary directive and the Interest & Royalties directive apply in Gibraltar. There is no capital duty on share transfers and nominal capital duty of £10 on share creation.
Individuals who can show a net worth of over £2
million and have appropriate accommodation of a high standard in Gibraltar can
apply for residency in Gibraltar as a Category 2 individual. This status only
taxes the first £80,000 of assessable income with a minimum payment of £22,000
per annum. The assessable income is only the income remitted to Gibraltar,
unless the individual applies for worldwide income to be included. The maximum
tax payable under this status is £29,880. |
