Gibraltar: How Does Gibraltar Compare?

It is gratifying when people say that they read my articles and last month's piece about the "offshore" industry appears to have generated some interest. Particularly my conclusion that Gibraltar was well placed to take advantage of the "brave new world" emerging in the world of offshore finance.

More than one person, however, asked me whether this positive view could really be justified. One was even quite vociferous, telling me there was no way that Gibraltar could really compete with "the bigger offshore centres". Well I'm not one to duck an argument so read on.

So how do you begin comparing jurisdictions? This is the crux of the matter and it's only fair to warn you, dear reader, that I will conclude that not only does Gibraltar compare favourably, on a number of counts it scores more highly than most. So where do we start and where are these other jurisdictions that we should be considering?

It was fashionable some years ago to term them as "tax havens" and then, when that came to be regarded pejorative, the phrase "offshore finance centre" was coined. It is a sign of the times that many now prefer to be known simply as "international finance centres". Whatever the label, broadly they were small territories that were able to leverage their fiscal autonomy, legislative flexibility and regulatory minimalism to attract funds or business that shunned high rates of tax or too much scrutiny elsewhere. Some jurisdictions became offshore centres almost by historical accident, others by design.

When thinking of those jurisdictions against which Gibraltar might be compared it is, I think, more useful to consider the type of jurisdiction rather than focus on individual countries. What follows then is my personal – but I hope also realistic – attempt to set out some of the key differences so that clients, and those who advise them, might make an informed choice.

Firstly let's put the jurisdictions into some order. I have concentrated on international centres that continue to provide "offshore" business. Although it is said that much of such work actually takes place in "onshore" cities such as London, New York and Tokyo, for the purposes of this piece I will ignore these global financial centres. I prefer to compare apples with apples after all.

So let's consider Gibraltar's competitors. When doing so, generally I start in Europe with the other British jurisdictions closest to home. These are the two Channel Islands bailiwicks of Jersey and Guernsey, together with the Isle of Man. In the Mediterranean, two EU members stand out – Malta and Cyprus. "Onshore Europe" includes the big boys of Switzerland and Luxembourg and a host of smaller states such as Monaco, Liechtenstein and Andorra.

Moving further afield one might consider the powerhouses that have developed in recent years in the Middle East – of which Dubai is the most striking example – and in the Far East, Hong Kong and Singapore (although it's fair to say that these have also been major trading entrepôts for centuries).

There are further a host of island territories spread out around the Caribbean and, although fewer in number, dotted around the Pacific and Indian Oceans. And I shouldn't neglect the country whose government has done more than any other to change the way we are all now doing business, the United States. It is sobering to reflect that in some states – Delaware being the prime example – more offshore business is done than in several of the countries in my list combined. Indeed 20% of its state revenue is said to derive from taxes on companies.

I work for an international group that has more than 25 offices worldwide, including many of the places listed above. As I tried to set out last time, there is still a place for these jurisdictions but careful choices have to be made based on professional advice.

Given Gibraltar's tiny size geographically, is it fair to compare the jurisdiction with such places as Switzerland and Luxembourg and the rest? "Ridiculous", some might say. But as always, the answer depends on your point of view. We may not have the same resources or infrastructure as some of these competing jurisdictions but I think we compete on all other levels.

Last month I wrote about regulation; that its implementation and effectiveness matters more than merely what appears on the statute book. I went on to say that we should be proud of our local regulation. Although at times it can seem to be a burden, in today's world it is also now the principal measure of a jurisdiction's international merit. It is far better to be ahead of the curve than behind it.

There are several other aspects to consider when thinking how we measure up against the rest. Gibraltar is a member of the European Union with all the potential that can imply for passporting services to its 27 member states, but crucially this does not extend to the Customs Union and hence Gibraltar remains outside the VAT regime. This absence of VAT can lead to some useful corporate planning opportunities.

I have also written in previous articles about Gibraltar's corporate tax rate. At 10% we compare very favourably with many of our peer group – including Cyprus at 12.5% and the rest. Many jurisdictions maintain a zero per cent regime but these are increasingly scrutinised or worse, "black listed". It should also be remembered that Gibraltar's 10% rate applies only to income accrued in Gibraltar or derived from local activities.

Let us then consider the costs of doing business. Here again Gibraltar scores well against most of its competitors. Whilst our population of just 30,000 is one-third the size of Jersey – as just one example – we can count on the daily influx of qualified staff that live across the border in Spain. Not so easy to do when you live on an island.

For me, one of the most attractive aspects to working in the professional sector in Gibraltar is the ease which with different types of services can be provided either by the same group, as in Sovereign's case, or by using the various informal networks that to be found in a closely-knit business community. Apart from traditional corporate and trust services, one is able to access specialists in finance, law, accountancy, gaming, insurance, collective investment and other areas such as marine and aviation – all in our modestly sized but very well developed centre. Put another way, there is not much that we cannot do here.

In recent years pensions work has grown into a substantial source of business; for example Gibraltar has become a market leader in QROPS provision. Recently it was announced that QNUPS will also be made available here. This will be a real boost to those local firms involved in the business and help to demonstrate our ability to compete realistically with places such as Guernsey and Malta in this area.

Of course there are bound to be some negatives. Gibraltar is seriously "under banked" and this means that local options are becoming harder to find. Bank downsizing is happening across the world as the sector contracts following the 2008 global crisis but nevertheless this is not positive news for Gibraltar.

I am also often reminded that Gibraltar has not developed a double tax treaty network. This would certainly be useful. We have an impressive range of TIEAs or Tax Information Exchange Agreements in place but they are not the same thing. Tax treaties help to eliminate the potential of having to pay tax in two places on the same income but they also often include highly advantageous rates of tax for their mutual benefit of the treaty partners. Note to government: it would be good to see this resolved.

So can we, in fact, compete effectively? Granted, as the scribe of this august publication's financial column I am expected to be bullish. This is even more important in my day job where I am asked to compare Gibraltar to all the rest on a daily basis. Having done this for almost ten years, I do genuinely think we are getting there. There are challenges but we can meet them head on as we have a great story to tell. So let's all get out there and tell it!

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions