Gibraltar: Doing Business In Gibraltar - ENGLISH VERSION

Last Updated: 3 April 1998

We have compiled a summary of the basic information relating to Gibraltar which we hope will be of use to our many clients.

Gibraltar is a British colony located to the south of Spain and has its own Government which is responsible for making of laws in respect of taxation and local matters. Foreign and Defence matters are the responsibility of the UK Foreign Office, represented in Gibraltar by the Governor. The official language in Gibraltar is English and the currency is Sterling.

Gibraltar is a member of the European Union, unlike the Channel Islands, but not a member of the customs union, hence its "offshore" status. Spain, because of its territorial claims, disputes this, however Gibraltar became a member at the same time as the United Kingdom through the Treaty of Accession.

Legal System

Gibraltar law is based on Ordinances passed by the House of Assembly and follows Common Law principles. Gibraltar is currently passing Ordinances to enact all the EU directives, under instruction from the UK Foreign Office.

The two main Ordinances affecting Gibraltar companies are the 1930 Companies Ordinance (as amended) and the Companies (Taxation & Concessions) Ordinance (as amended). The later introduced the exempt taxation status for companies carrying on business outside Gibraltar. Because of its common law basis, Gibraltar recognises all types of Trusts.

Financial Services Commission

Gibraltar passed the Financial Services Ordinance and Financial Services Commission Ordinance in 1989. The affect of these ordinances was twofold, firstly to require all businesses carrying on financial services to register and secondly to establish a commission to police them.

Companies are required to apply for a licence if they are involved in businesses such as Investment Management, Banking, Insurance, Company & Trust Management etc. Once the companies have been vetted and granted a licence they are required to state their licence number on all letterheads and advertising. They are inspected by the commission to ensure that they are complying with the ordinances. They are also required to file a set of audited accounts with the commission within four months of their year end.

In 1994 the UK under its responsibility for Gibraltar and to the European Union, asked the Gibraltar government to amend the Financial Services Commission Ordinance as a result of which the commission now has a majority of UK members.


Gibraltar's taxation system is similar to that of the United Kingdom and is administered under the Income Tax Ordinance. There is no separate Corporation Tax, companies being subject to income tax at a rate of 35% currently. The Gibraltar Government has not presented a Budget for a number of years so the tax rates, allowances etc have not changed. The tax year runs from 1 July to 30 June.

A distinction has to be drawn between those companies trading in Gibraltar and those outside:.

Companies trading in Gibraltar:

These companies are required to complete an Income Tax Return each year, and submit it together with a set of Audited accounts to the Commissioner of Taxes.

Companies are required to register themselves with the Employment & Training Board and thereafter, annually, file a contract of employment for each employee. Personnel can only be employed after first registering the vacancy with the Employment & Training Board.

They are also required to register for PAYE and deduct tax from their employees working in Gibraltar. They are also required to purchase a weekly Social Security stamp for each employee.

The company is subject to 35% tax on profits after deduction of Capital Allowances. The Commissioner has recently tightened up on Benefits in Kind and is disallowing capital allowances and expenses on company cars.

Companies Trading outside Gibraltar:

These companies can elect to apply for Exempt Tax Status and pay an annual fee on the 1 April. To qualify the company cannot carry on business in Gibraltar, cannot have a Gibraltarian or resident of Gibraltar as a beneficial owner, but may have its management in Gibraltar.

Applications for exempt tax status to the Financial and Development Secretary have to be supported by a professional reference on the beneficial owner.

The annual fee depends on the residence of the directors, a resident exempt company paying Ł225 with a 100% penalty for late payment. This fee exempts any liability to Income Tax on the company's profits in Gibraltar, Estate Duty and Stamp Duty.

Companies with management offices in Gibraltar employing staff will still need to register with the Employment & Training Board and Tax office as before.

Other types:

There are other types of special tax rules and concessions for companies such as Qualifying companies and Part IX companies. Further details can be provided on request.

Company Legal Framework

Gibraltar's company legislation is encapsulated in the Companies Ordinance 1930 (as amended) and closely follows the United Kingdom's 1929 Companies Act. The Registrar of Companies is also the Financial & Development Secretary, a UK Foreign Office appointee, and the Companies Registry is now administered by a private company.

Four types of company are described under the Ordinance:

  • company limited by shares, either "private" or "public"
  • company limited by guarantee and not having a share capital
  • company limited by guarantee and having a share capital
  • unlimited company

Company names should end in "Limited", unless the shareholders have unlimited liability. The government by legal notice published a list of sensitive names which require special permission.

Share capital may be denominated in any currency and shares must have been issued at par. Shares can be issued with special rights as to voting, dividends etc. Preference and redeemable shares can be issued, also share warrants to bearer (not bearer shares) are permitted. Each company must have a minimum of one member (shareholder), except for a public company which must have a minimum of seven.

There are no restrictions as to the residence or nationality of the directors nor requirement to hold shares. Every company must have at least two directors except for a private company which may have one. Companies can have a corporate director. There is no legal requirement to appoint a secretary, although it is usual to appoint an officer in this title. Exempt companies must have a Gibraltar resident company secretary. Companies can have a corporate secretary.

The Registered Office must be within Gibraltar and it is mandatory to have an Annual General Meeting in each calendar year, proxies being permitted.


The concept of the Trust in Gibraltar is based on that developed in England with certain statutory differences. Gibraltar trusts are completely private and there existence does not have to be registered with any public authority. Generally shares in underlying companies are registered in the trustees names without evidence that they are held in trust.

Providing the trust deed specifically excludes Gibraltarians and residents of Gibraltar from benefitting, and income arises outside of Gibraltar, the trustees will not be assessed to income tax, estate duty and stamp duty

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.

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