Qualifying Company Status
A company incorporated in Gibraltar or a registered branch of an overseas company may, subject to certain conditions, apply for Qualifying Company Status.
A company or registered branch holding such status will be liable to taxation on its profits at such a rate as may be prescribed on the granting of the certificate but not exceeding the rate of corporation tax which currently stands at 35%. The rate of tax applied will depend on the type of activity the company engages in.
Once issued a qualifying company certificate is valid for 25 years.
The benefits deriving from qualifying status are the following:
- The company or registered branch will be liable to taxation on its profits at a low prescribed rate.
- Fees payable to non-residents (including directors) and dividends paid to its shareholders are subject to withholding tax at the same prescribed rate as the company.
- There is no Estate (Death) duty on the value of shares on the death of a shareholder.
- There is no stamp duty on the transfer of shares of a qualifying company.
Management and control
A qualifying company can be resident, managed and controlled in or from Gibraltar without affecting its qualifying status. There are no restrictions as to the nationality or residence of its directors.
For a company to obtain and retain its qualifying company status, it must fulfil the following conditions:
- It must at all times have a paid up share capital of £1,000 or the foreign currency equivalent thereof.
- It must deposit £1,000 with the Gibraltar Government as security for future taxes.
- It must pay a fee of £250 for a qualifying certificate.
- 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.
In circumstances where the intended operations require a "bricks and mortar" presence in Gibraltar such as in the provision of financial services or import/export activities then such operations would obtain qualifying company status as opposed to Exempt Company status.
Qualifying companies are also of particular benefit in situations where a subsidiary company needs to make income remittances to a foreign parent and is required to have suffered tax at a certain level to escape further taxation in the home country.
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.