Gibraltar is a desirable location for opening offshore companies by the foreign companies.
As a major advantage for both local and foreign company is that no capital gains are taxed here.
Being part of the EU has granted the advantage of not paying any withholding taxes on dividends received here.
Both royalties and license fee are not taxed in Gibraltar. Interests are taxed only if they are part of company’s trading receipts.
No VAT is paid in Gibraltar. Also no wealth tax or estate duty is imposed.
The procedure of registration is made in the same manner as the one made by the domestic companies and is usually advisable to be undertaken by a lawyer firm, which is familiar with the local legislation (service provided by BridgeWest).
1) A memorandum of association is required. It had to contain the name of the company and its objectives.
2) Secondly, the articles of association containing the internal regulations must be provided.
3) The above must be deposited at the Companies House which will issue a certificate of registration.
The advantage of establishing an offshore company in Gibraltar is that the founders don’t need to provide a minimum share capital at registration, unlike the domestic companies.
Once the above steps are completed, the foreign investors may start operating business and enjoy the benefits of having an offshore company.
As a general rule, an offshore company must pay an annual fee at the Companies House, with a value that may differ from year to year.
- There are no requirements for paying taxes in Gibraltar, if certain conditions are met such as: the management and ownership are from abroad, no income is remitted in Gibraltar and no local individuals hired at the company are from Gibraltar.
- The following incomes are charged in Gibraltar: the profits from any business, profession, trades, rents and profits from property and those arising from employments.
The taxation for a domestic company is made with 10%, while the Gross Income based System is starting from 28% to 6%.
The energy and utility providers are taxed with a 20% rate.
- The individuals are usually taxed with a standard rate of 30% but certain incentives are granted according to the tax system used in calculation of the taxes.
- An offshore cannot perform business in the banking area, insurance, assurance, reinsurance or in any of the financial area.
An offshore company with the owner and the management outside Gibraltar and no income remitted here will be exempt from paying taxes, even though Gibraltar hasn’t signed any double tax treaties with other countries.
- Gibraltar’s economy is especially based on the service industry, financial services and retail shopping, mostly because of the lack of condition to develop an agricultural area.
- Nowadays a higher importance is granted to the telecommunication system, the import and export operation and light manufacturing.
- Known especially as a touristic location, Gibraltar has started to develop its commercial sector in the last few years, mostly because of the favorable economic environment.
- The Commissioner of Income Tax is establishing that the profit obtained and allocated abroad is taxed only there. For this fact, Gibraltar is considered a tax heaven by many investors.