Subject to the conditions set out below, a company incorporated in Gibraltar or a registered branch of an overseas company may apply for a Tax Exemption Certificate. Possession of such certificate will, in return for the payment of a fixed annual tax, exempt the company or branch from further taxation in Gibraltar.
A Tax Exemption Certificate is issued for a period of 25 years.
Fixed Annual Tax
The fixed annual tax payable is:
- £225 if the company is ordinarily resident.
- £200 if the company is not ordinarily resident.
- £300 in the case of a registered branch of an overseas company.
The benefits deriving from having tax exempt status are that the company or branch will be exempt from the following:
- Corporate taxation on profits.
- Withholding taxes on interest, fees and other payments to non resident directors or to other persons, and dividends paid to its shareholders.
- Estate duty on the value of shares on the death of a shareholder.
- Stamp duty on the transfer of shares.
Management and Control
An exempt company can be resident, managed and controlled in or from Gibraltar without affecting its tax exempt status. There are no restrictions as to the nationality or residence of its directors.
For a company to obtain and retain its tax exempt status it must fulfil the following conditions:
- It must at all times have a paid up share capital of £100 or the foreign equivalent thereof.
- No Gibraltarian or Gibraltar resident may have a beneficial interest in the shares of the company.
- The company may not, without the prior consent of the Gibraltar Financial & Development Secretary, trade or carry on business in Gibraltar with Gibraltarians or residents of Gibraltar. It may however trade with other exempt or qualifying companies or non resident persons.
- The register of members must be kept in Gibraltar.
- No shares are issued or transferred without the approval of the Financial and development Secretary.
There is provision in law to ensure the identity of the beneficial owner remains secret and confidential.
The low administration and set up costs of the exempt company make it an ideal vehicle for:
- A property holding company.
- An investment holding company.
- Sales agency company, of particular benefit where trade is being carried on between two high tax jurisdictions.
- An international trading company.
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.