Gibraltar Offshore Banking
Self-sufficient Gibraltar benefits from an extensive shipping trade, offshore banking, and its position as an international conference center. The British military presence has been sharply reduced and now contributes about 7% to the local economy, compared with 60% in 1984. The financial sector, tourism (almost 5 million visitors in 1998), shipping services fees, and duties on consumer goods also generate revenue. The financial sector, the shipping sector, and tourism each contribute 25%-30% of GDP.
Although residents of Gibraltar pay reasonably high income taxes, and there is estate duty, there are several tax-efficient mechanisms for making investments through Gibraltar.
Non-residents are taxable on their income received in Gibraltar, but not if it is channelled through a trust or an exempt company (although exempt companies are in the process of being phased out, and will have been removed completely as a corporate vehicle by the end of 2010). Also bank interest is exempt from tax, although the EU's Savings Tax Directive, which came into effect in July, 2005, means that payments of interest and other savings returns made to EU citizens are reported to their home tax authorities.
Residents have traditionally been able to make use of High Net-Worth Individual (HNWI) status, and some expatriate executives were given tax-privileged regimes; in both cases the total tax bill was capped, so that additional income over the cap was free of tax.
High Net-Worth Individuals have traditionally been permitted to hold shares in an exempt company, and to hold deposits in Gibraltar banks; income from these sources has only been taxable (for the company) if paid to the HNWI for his own use in Gibraltar.
(NB: In July 2002 Gibraltar's Chief Minister, Peter Caruana announced a new corporate taxation policy, which was updated again in 2007, following a long-running dispute with the European Union.
The main types of investment available through Gibraltar are as follows:
- GIBRALTAR INVESTMENT FUNDS
Open a Gibraltar Bank Account