Gibraltar: An Introduction To Gibraltar

Last Updated: 25 November 1999

Gibraltar’s location at the mouth of the Mediterranean makes it the geographical linchpin between two great seas and continents. This strategic location has long been the most vital ingredient of its economic and social history. A good deal of its previous significance in military terms remains, but the commercial potential of its location is now becoming increasingly important. Furthermore, as a peninsula attached to southern Spain Gibraltar has benefited from and complemented the enormous growth and revival witnessed in Andalucia and the Costa del Sol over the last decade.

Gibraltar is a United Kingdom Overseas Territory with a highly developed system of self-government. Essentially, the locally elected parliament, known as the House of Assembly, is responsible for all domestic matters affecting Gibraltar. This includes issues relating to financial services, taxation, company law and commerce generally. The UK retains responsibility in three specific areas, namely, foreign affairs, defence and internal security.

Over the last few years and with the assistance of the UK Government, Gibraltar embarked on the enormous process of transposing EU directives into its domestic legislation. At the same time, the Financial Services Commission (FSC) further strengthened the supervisory infrastructure to ensure that financial services are regulated in Gibraltar to a level matching that in the UK. This process has resulted in Gibraltar having one of the best-regulated financial centres in the world. It is now regarded as a benchmark jurisdiction in respect to many aspects of its supervisory infrastructure.

The Economy

The Gibraltar economy is vibrant and expanding. Since the re-opening of the frontier with Spain in 1985 the economic base has considerably diversified. Apart from financial services, tourism and port activities are its mainstay. There are approximately six million people crossing the land frontier with Spain annually. These are made up of many who live and commute to work in Gibraltar and also of millions of tourists. Cruise liners are also on the increase with nearly 300 ships projected to call at its port this year. Tourism from the UK continues to be important with both British Airways and Monarch providing airlinks to Britain.

Ship repair facilities complement a busy port. Cammel Laird, which acquired the shiprepair yard from Kvaerner in 1998, is enjoying good results. Bunkering to commercial shipping is also on the increase. Gibraltar is in fact the largest bunkering port in the western Mediterranean.

A range of new activities is broadening the economy further. The much publicised relocation of gaming operations such as Victor Chandler and Ladbrokes are good examples. Light manufacturing operations including a state of the art bottling facility has also been established lately. Various telecommunication groups have sought licences to operate satellite control centres from the Rock as Gibraltar’s position provides a good location from which satellites can be controlled and data transmitted or downloaded.

Very recently Gibraltar has seen a significant development of Gibraltar as a location from which investment traders can operate. Both LIFFE and Eurex have established direct links in Gibraltar and are actively considering establishing independent nodes in Gibraltar.

Gibraltar’s Unique Position In The European Union

Gibraltar is the only British Overseas Territory which has full access to the single market by virtue of its membership under Article 227(4) of the Treaty of Rome. The main advantages of this membership are twofold. Firstly, adherence to EU standards acts as an endorsement of the regulatory environment in which the finance centre operates. The second advantage is the potential to access the single market. These are already well advanced in the areas of insurance and banking. Gibraltar is however very keen to finalise its passporting rights throughout the EU, in particular in the area of investment services.

Passporting rights involve two basic freedoms. Firstly, the freedom of establishment, ie the right to set up branch operations, and secondly freedom of services, ie, the right to provide services directly in another EU state. These rights are available to companies without having to go through separate licensing procedures in the host jurisdiction hence the term "passporting".

Attractive Fiscal Environment For Businesses And Investors

Gibraltar offers a number of fiscal incentives, which include: no value added tax, no capital gains tax, no wealth tax, no inheritance, gift taxes or estate duty. There are also opportunities for structuring offshore business through exempt or qualifying companies. Exempt status relieves a company from taxes in Gibraltar as long as it continues to meet certain minimum requirements. The company is subject to an annual fee of £225 per year if it is resident and £200 per year if it is non resident.

The other main corporate vehicle, the qualifying company, is now more extensively used for operations basing themselves in Gibraltar with a permanent presence. Banks, insurance companies and fund management groups would therefore be encouraged to adopt this tax regime. The extremely flexible tax regime would suit qualifying companies for a variety of different uses. The legislation provides for a tax rate of between 0% - 35%.

These corporate regimes are complemented by other favourable tax features. There are a number of specific tax regimes applying to individuals. The most developed is probably a scheme to encourage the establishment of tax residence by wealthy individuals. This scheme is not limited only to those seeking a retirement spot. Under the appropriate regulations a high net worth individual (Qualifying Category 2 Individual) can acquire tax residence in Gibraltar by either buying or renting suitable accommodation and meeting various other criteria. Such an individual is then chargeable to tax on a worldwide basis but his liability is capped to between a minimum of £10,000 to £19,750 per annum. The exemption extends to his spouse and children under the age of 18 or in full time education. An individual is free to own and operate an exempt or qualifying company and thereby to continue conducting international business from Gibraltar.

There are also tax incentives for individuals working in Gibraltar. Under certain circumstances individuals possessing special skills may be granted Qualifying (Category 3) status which restricts the amount of income tax chargeable on their emoluments to £10,000 per annum. Gibraltar has also introduced Qualifying (Category 4) individuals rules where the amount of income tax payable is restricted to £5,000 per annum.

Apart from the reasons already mentioned, there are a number of other factors which together make Gibraltar an attractive finance centre from which to operate. Communications are good, with daily flights to London, and Malaga airport, just over an hour away, providing links to many major cities. The lifestyle available in Gibraltar and the surrounding area is also exceptional. An average of 300 days sunshine per annum, 60 top class golf courses in the region, and a wide availability of entertainment from the exotic to the sublime probably explain why approximately three million expats have decided to live in and around the Iberian Peninsula. All these features make the location of any activity in Gibraltar attractive from a lifestyle perspective in addition to any commercial and technical considerations. This combination of factors makes the process of establishment in Gibraltar pleasurable, as well as profitable.

Further information on the finance centre can be accessed via the Gibraltar Finance Centre web site and the Financial Services Commission web site.

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