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Gibraltar 10% Tax Companies

Tax Mitigation Jurisdictions

Synopsis:

In an attempt to realign itself as a ‘tax planning’ and not a ‘tax haven’ jurisdiction the Gibraltar government in 2010 introduced a ‘flat’ universal corporate tax rate of 10% very much in the same manner as the Republic of Ireland (where there is a 12.5% corporate tax rate) and Cyprus (where there is a 10.00% corporate tax rate). Just as in these jurisdictions, local management and control must be established and benefit can be taken from various EU directives and regulations. However, the fact that Gibraltar has a very limited double taxation treaty network and is not a sovereign member of the European Union may cause potential problems for those considering establishing a Gibraltar presence as might also the fact that many states continue to ‘black list’ Gibraltar as a ‘tax haven’.

General Synopsis:

British Crown Colony - Effectively self governing in all matters save defence and foreign affairs. However, ultimate power still rests with the United Kingdom. Good efficiency. English and Spanish speaking. Excellent air and sea communications. Scandals in the 80's together with ongoing claims, mostly from the Spanish, of money laundering have severely effected this jurisdiction's reputation. In recent years local regulations have been more rigorously enforced. Unlike most other tax havens, Gibraltar once had high individual and corporate taxes, although there were certain incentives for high net worth foreigners. Residents may, with certain exceptions, be taxed on their world-wide income. There are three main types of company: the Exempt Company, the Qualifying Company and the 1992 Holding Company. It is also possible to have a non-resident company. Single subscriber companies have been introduced in concurrence with EU directives. Legal system is based on English common law. Favourable company and trust statutes. Unlike Jersey, Guernsey or the Isle of Man, Gibraltar is a full member of the European Union, save for the Common Agricultural Policy,, Common Customs Tariff and VAT. Significant number of ship and yacht registrations. Growing banking sector, however, financial services district has not been as successful as hoped.

Star Ratings

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Relationship with the UK

Gibraltar has been a full member of the EU since 1973, when it joined as a UK Dependent Territory (see Article e 227(4) Treaty of Rome). The Common Agricultural Policy, Common Customs Tariff and VAT, however, do not apply.

Advantages of Gibraltar Tax Exempt Company

  • A Gibraltar Exempt Company need only pay an annual exempt duty of £225.00 per annum in lieu of paying local corporate tax at 35%.
  • All Gibraltar companies require a local registered office for the service of process but there is no specific requirement for the appointment of a registered agent.
  • Both registered and bearer shares can be issued.
  • There must be at least one director. A director can either be a real person or a corporate entity. Details are on public record.
  • There are no nationality or residence requirements.
  • There must be at least one shareholder. A shareholder can be a corporate entity and there are no nationality or residence requirements.
  • Nominee directors can be supplied internally or externally. There is a disclosure requirement for Exempt companies of the name and address of the beneficial owner but all such information is protected by a legal guarantee of confidentiality.
  • A full register of members and charges must be kept at the registered office in Gibraltar.
  • The name of the required company should be checked with the Registrar and the ending will be either Limited or Public Limited Company.
  • Developed and favourable corporate law. Statutes less bureaucratic than British equivalent.
  • More corporate possibilities than in the Channel Islands
  • Single subscriber companies available.
  • No capital gains tax and no exchange controls.

Facts to Note

  • There is now a universal flat corporate tax rate of just 10% per annum
  • All Gibraltar companies require a local registered office for the service of process but there is no specific requirement for the appointment of a registered agent.
  • There should be at least one tax resident director. A director can either be a real person or a corporate entity. Details are on public record.
  • There are no nationality or residence requirements but ‘trading’ companies do require genuine activities to take place in Gibraltar if they are to avoid the ‘controlled foreign company’ CFC rules so prevalent in developed countries
  • There must be at least one shareholder. A shareholder can be a corporate entity and there are no nationality or residence requirements.
  • Directors are now not nominees but are real and with real responsibilities to the company.
  • A full register of members and charges must be kept at the registered office in Gibraltar.
  • The name of the required company should be checked with the Registrar and the ending will be either Limited or Public Limited Company.
  • Developed and favourable corporate law.
  • Statutes less bureaucratic than British equivalent.
  • More corporate possibilities than in the Channel Islands
  • Single subscriber companies available.
  • No capital gains tax and no exchange controls.

Location

Situated at the tip of the Iberian Peninsula at the opening of the Mediterranean Sea with the Atlantic Ocean, north of Morocco and south of Spain. The coast of Africa is only 12 kilometres away across the Straits of Gibraltar. Gibraltar is approximately 5 kilometres long and 1.2 kilometres wide, with a population of approximately 30,000.

Taxation

As stated the corporate tax in Gibraltar is now just 10%.

How to Incorporate a Gibraltar Company

The formation procedure is very similar to that in the United Kingdom and the Channel Islands. The principal governing legislation is based on the British Companies Act of 1929. As a result of some bad publicity, the Gibraltar Financial Services Commission is trying to enforce proper record keeping by local registration agents. Most importantly, beneficial ownership details must be supplied and a full register of members kept at the registered office address of the company. Information cannot be supplied to third parties without specific authority.

Corporate Requirements

Name: The name of the required company should be checked with the Registrar. The ending will be either limited` or Public Limited Company'.

Capital: Indigenous and non-resident companies can have a share capital of as little as two issued penny shares. Exempt Companies require £100.00 of issued shares. Qualified Companies £1,000.00.

Registered Office: All Gibraltar companies require a local registered office for the service of process.

Registered Agent/Nominees: There is no specific requirement for the appointment of a registered agent. Nominee directors can be supplied internally or externally. There is a disclosure requirement of the name and address of the ultimate beneficial owner(s) of a company to the Financial and Development Secretary, who should also be provided with two references from persons of good standing regarding the beneficial owner(s). This is primarily to ensure that Gibraltarians do not have a beneficial interest in such a company. All such information is protected by a legal guarantee of confidentiality.

Board of Directors: There must be at least one director. A director can either be a real or corporate entity. Details are on public record. There are no nationality or residence requirements. However, it is a requirement that either the company secretary or at least one director be a Gibraltar resident.

Shareholders: There must be at least one shareholder. They can be either real or corporate entities. There are no nationality or residence restrictions.

Annual Fees and Government Taxes

All companies must submit an annual return to the local authorities whether or not the company has traded. If a company has conducted no business, business including however the activation of a company bank account, no duty or general tax liability will exist. Qualified, 1992' and indigenous companies must keep proper and full accounts submitting the aforementioned on the specified annual return date usually before the 1st of April. Non-resident companies must submit accounts but have no Gibraltar tax liability. Exempt companies need not submit any accounts but must submit an annual return and pay the exempt duty of £225.00. Auditors need not be appointed for exempt companies.