Country code – GI
Legal Basis – Common Law
Legal framework – Companies Act 1930
Company form – Private company limited by shares (Ltd)
Liability - The liability of the shareholders is limited to the amount of their shares.
Share capital –Company equity is divided into shares of a fixed amount. Shares may be allotted at their nominal value or at a premium and may be fully or partly paid. Bearer shares are not allowed.
There is no minimum share capital, but two shares must be issued. Usually, the standard share capital is GBP £2000, which does not need to be paid up.
Shareholders – A Gibraltar company may be incorporated by one or more natural persons or legal entities, residents or non-residents. Details of the shareholders are disclosed publicly.
Directors – A company must have at least one director, who may be a natural or juristic person, resident or non-resident. Details of the directors are disclosed publicly.
Secretary – The company shall appoint a secretary who can be either an individual or a corporate body.
Registered Address – A company must have a registered office in Gibraltar.
General Meeting – In each year, every company shall hold a general meeting as its annual general meeting. AGM can be held anywhere.
Electronic Signature – Permitted.
Re-domiciliation – Inward/outward re-domiciliation is usually allowed in/to a country recognized by Gibraltar for the purposes of re-domiciliation, EEA and countries, which are members of the British Commonwealth as well as from most other finance centers.
Compliance – Every company is required at least once in every calendar year to submit an annual return and accounts. Tax resident companies must submit a tax return annually.
Unless a company meets the conditions of being a small company, the company must appoint an auditor and submit audited accounts.
- Shareholders not disclosed
- Directors not disclosed
- Corporate shareholders permitted
- Corporate directors permitted
- Local director required
- Secretary required
- Local secretary required
- Annual general meetings required
- Redomiciliation permitted
- Electronic signature
- Annual return
- Audited accounts
- Audited accounts exemption
- Exchange controls
- Common law Legal basis
- 1 Minimum shareholders
- 1 Minimum directors
- GBP 1 Minimum issued capital
- - Minimum paid up capital
- GBPAny Capital currency
- Anywhere Location of annual general meeting
- 2018 AEOI
Tax residency – A company is tax resident in Gibraltar if the management and control of its business are exercised from Gibraltar or by persons who are ordinarily tax residents in Gibraltar.
Basis – Corporate income tax is levied on income that is accrued in or derived from Gibraltar. Non-resident companies are subject to tax on Gibraltar-source income.
Tax rate – Corporate tax is 10%. Utility companies and companies that abuse a dominant position are subject to a 20% tax.
Capital gains – Capital Gains are not taxed in Gibraltar.
Dividends – Dividends are not subject to tax in Gibraltar
Interests – Interests are usually not taxable in Gibraltar, except for companies engaging in banking and money lending activities, and interests arising from an inter-company loan, which are taxed at standard rates.
Royalties – Royalties are generally subject to corporate income tax.
Withholding Taxes – There are no withholding taxes in Gibraltar.
Foreign-source income – Foreign-source income is usually not taxed in Gibraltar, except royalties and taxable interests.
Losses – Losses arising from taxable income may be carried forward indefinitely. The carryback of losses is not permitted.
Inventory - Inventory may be valued at the lower of acquisition/production costs or market value. First in first out (FIFO) or average cost methods are generally permitted.
Anti-avoidance rules – There is no specific transfer pricing legislation in Gibraltar. However, tax authorities can apply a general anti-avoidance provision if an arrangement is deemed to be artificial or designed to reduce tax.
Interest paid is deemed to be a dividend where the debt-to-equity ratio exceeds 5:1 and the interest is paid to a connected party that is not a company, or interest is paid to an arm’s length party where the loan is secured by assets belonging to a connected party that is not a company.
Gibraltar has transposed ATAD1 into local law via the Income Tax 2010 (Amendment No. 3) Regulations 2018 on December 2018.
A CFC may be a Gibraltar's company foreign permanent establishment (PE) or a subsidiary in which the parent company holds directly or indirectly more than 50% of its voting rights/capital or is entitled to receive more than 50% of the profits – which corporate tax paid is lower than half of the tax that would have been charged on the company or PE under Gibraltar tax.
Gibraltar taxes non-distributed income of the CFC if this is derived from a non-genuine arrangement to create a tax advantage.
CFC rules don’t apply to subsidiaries and PEs with no more than EUR 750,000 of trading profits and non-trading income of EUR 75,000 or less, or companies which profit amount does not exceed 10% of its operating costs.
Gibraltar has also transposed into law the interest deductibility rule, whereby a company can only deduct net interest expenses up to the higher of 30% of its EBITDA or EUR 3 mil. Exit taxation rules are expected to be conscripted into the laws before December 31, 2019.
Labor taxes – Employer contributions to the Social Insurance are 20% of gross earnings, subject to a minimum of GBP 16.50 per week (GBP 71.50 per month) and a maximum of GBP 40.15 per week (GBP 173.98 per month).
Employees' contributions are calculated as 10% of gross earnings, subject to a minimum of GBP 5.50 per week (GBP 23.83 per month) and a maximum of GBP 27.50 per week (GBP 119.17 per month).
Tax credits and incentives – There is usually a foreign tax credit for foreign tax paid, in respect of profits or gains derived from sources within Gibraltar. There are tax and import duties reliefs for development companies under certain conditions. There are also other tax incentives for property investment, commercial property, training, as well as for small businesses and start-ups operated from within Gibraltar.
Personal income tax – An individual is deemed to be tax resident in Gibraltar if he or she is present in the Rock for at least 183 days in a calendar year or 300 days in any three consecutive years.
Tax residents are subject to tax on their income accrued in or derived from Gibraltar, and on non-trading worldwide income (except for rental income).
Tax residents may elect to be taxed via an allowance-based system and a gross income-based system.
Tax rate bands under the gross income-based system are split between gross income of less than GIP 25,000 and gross income exceeding that amount. The rates on income under GIP 25,000 are 6% on the first GIP 10,000, 20% between GIP 10,0001 and GIP 17,000 and 28% on the balance.
The rates on gross income exceeding GIP 25,000 start at 16% and peak at 28%. The rates start to reduce for gross income exceeding GIP 105,000, up to a minimum of 5% for income exceeding GIP 105,000 up to a minimum of 5% for income exceeding GIP 700,000.
The allowance-based system has a reduced rate of 14%, a standard rate of 17% and a rate of 39% for taxable income exceeding 16,000.
Capital gains and interest income are not taxed in Gibraltar. Dividends are taxed provided that the underlying income of the company is subject to taxes in Gibraltar, otherwise, they are exempted.
Other taxes – There is a stamp duty up to 3% payable on the transfer or sale of Gibraltar Real Estate, or of shares of companies that own Gibraltar real estate.
There is a 1% gaming tax levied on gaming companies (minimum of GBP 85,000 and maximum of GBP 425,000)
There is also a capital duty of GBP 10, payable on the initial authorization of share capital or any subsequent increases.
There is no V.A.T. in Gibraltar.
- Offshore Income Tax Exemption
- Offshore capital gains tax exemption
- Offshore dividends tax exemption
- CFC Rules
- Thin Capitalisation Rules
- Patent Box
- Tax Incentives & Credits
- Property Tax
- Wealth tax
- Estate inheritance tax
- Transfer tax
- Capital duties
- 0% Offshore Income Tax Rate
- 10% Corporate Tax Rate
- 0% Capital Gains Tax Rate
- 0% Dividends Received
- 0% Dividends Withholding Tax Rate
- 0% Interests Withholding Tax Rate
- 0% Royalties Withholding Tax Rate
- 0 Losses carryback (years)
- Indefinitely Losses carryforward (years)
- FIFOAverage cost Inventory methods permitted
- 10% Social Security Employee
- 20% Social Security Employer
- 28% Personal Income Tax Rate
- 0% VAT Rate
- 0 Tax Treaties
Gibraltar is a British overseas territory located at the southern tip of the Iberian Peninsula, east of the Bay of Algeciras, and extends over the geological formation of the rock of Gibraltar, bordering Spain and communicating the Mediterranean Sea and the Atlantic Ocean. It has a population of 33,000 inhabitants in an area of less than 7 sq. km.
Its official language is English and its official currency is the Gibraltar Pound (GIP), pegged to – and exchangeable with – the British pound sterling at par value.
The central bank controlling the GIP, with the responsibility of minting coins and printing notes, is the Government of Gibraltar.
As a British Overseas Territory, Gibraltar has a governor, appointed by the monarch of the United Kingdom, who works as a representative of Her Majesty's Government.
The governor is responsible for security in the territory and representation between the territory and the British Government; Also dissolves the legislature and acts to enforce the laws.
The Government of Gibraltar is elected for a term of four years. The unicameral Parliament currently consists of seventeen elected members. The head of the chamber is appointed by a resolution of the Parliament. The head of government is the Chief Minister.
Gibraltar is part of the European Union (EU) although with a special status. Being a British overseas territory, the UK is in charge of foreign affairs and business affairs.
According to the Treaty of Accession of the United Kingdom to the European Economic Community (EEC) in 1973, Gibraltar entered the EEC as a 'European territory whose external relations the UK Government is responsible'.
Gibraltar is the only European territory enjoying this status in the European Union. In the referendum of Brexit, its population voted mainly in favor of staying in the European Union.
As negotiated by the UK at the request of the Gibraltar government, some EU laws do not extend to Gibraltar. According to several provisions of the Treaty of Accession of the United Kingdom to the European communities, Gibraltar:
- It is outside the customs union of the EU.
- It is excluded from the Common Agricultural Policy (CAP).
- It is excluded from the harmonization of VAT.
- It does not allocate any part of the customs revenue to the EU.
Its economic activity is conditioned by its physical limitations and the lack of open land, which make agriculture non-existent.
It maintains a small amount of light industry for domestic consumption such as beverages. The main sources of income are on shipping, tourism, financial services, and the Internet.
In recent years there has been a significant expansion of hotel facilities to stimulate tourism. The port facilities occupy most of the western shore of the territory, as well as a portion of land gained to the sea in the bay of Algeciras.
In 1998, Gibraltar developed a tax law that made it an active offshore financial center, and currently boasts a broad offer of banks, investment banks, insurance companies, credit card companies, consumer finance companies, government-sponsored enterprises, and stock brokerages.
Gibraltar has become a center for Internet gaming companies. All gaming operations in Gibraltar require licensing under the Gambling Act of 2005. Despite the difficulties in obtaining these licenses, there are currently several operating in the Rock, some of which are among the world’s largest.
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