There’s never been a better time to set up a business in Gibraltar. Gibraltar continues to offer many advantages for entrepreneurs chasing their dream as well as international companies looking to take advantage of the full range of solutions available in Gibraltar as a modern financial services and gaming jurisdiction.
In the following paragraphs, you’ll find information about the various options for structuring a business in Gibraltar, the process of registering with the various Government entities, the opening of bank accounts and key features of the Gibraltar Tax regime.
Business entities in Gibraltar
At the simplest end of the scale of setting up a business in Gibraltar, a business can be run by an individual as a Sole Trader. Becoming a sole trader is a relatively straightforward, cheap and efficient way to set up a business. Sole traders are required to register as a self-employed entity with the various Government entities set out below. Some sole traders choose to operate their business under a Business Name, which can be registered at Companies House.
A sole trader is required to comply with all relevant licensing requirements, which are further explored below. Sole traders are taxed in their income as individuals, which differs significantly from the flat rate of corporate tax levied on companies and other business entities, as set out below. Whilst operating as a sole trader is the simplest manner in which to set up a business, business owners are subject to unlimited liability.
An individual or group of individuals may choose to ‘incorporate’ and establish a Gibraltar Limited Liability Company. Setting up a Gibraltar Company involves initial expense in the context of the incorporation, which can be managed by the business owners themselves but are more often contracted to professional corporate service providers.
Companies and business entities that provide a limit on the liability of its shareholders to the extent of a shareholder’s ownership of the company. A company has what is referred to as a separate legal personality, enabling the business to enter into agreements and provide services in its own name, under the hand of its officers (directors, secretaries and other employees) without incurring unlimited personal liability. A company is established with Articles of Association which set out the objects of the company and cover many of the rules regarding companies as set out in relevant Companies legislation in Gibraltar. Shareholders in a company can enter into shareholder agreements to better record the intention of the business owners and to create mechanisms to be applied in the case of disputes or the company falling on difficult times. Hassans can assist in all matters relating to the incorporation of a company in association with Line Group Limited, Gibraltar’s largest corporate and trust service provider.
Click the following link for further information about Gibraltar Company Incorporation.
Partnerships are a common form of business arrangement, owing to the relative simplicity of establishing a partnership. This is an unincorporated form of association in that liability of the partners is not limited by reference to the amount of the partners’ investment in the business,
A partnership involves a group of two or more individuals agreeing to share the assets and liabilities of the jointly-owned business. Click the following link for more information on partnerships in Gibraltar.
Other business entities
It is also possible to establish Limited Partnerships, Limited Liability Partnerships and Protected Cell Companies in Gibraltar. It is also possible to redomicile a company from another jurisdiction to Gibraltar. For more information on each of these different options for setting up a business in Gibraltar, click on the following links:
- Limited Partnerships
- Limited Liability Partnerships
- Protected Cell Companies
- Redomiciliation of companies to and from Gibraltar
Any business wishing to trade or provide a service in Gibraltar is required to obtain a licence under the terms of the Fair Trading Act 2015 as amended from time to time. Click the following link for further information on obtaining a business licence in Gibraltar.
As part of the business licensing formalities, new businesses are required to have a business address. This address must be commercial property unless a premises waiver is applied for. There is a wide variety of office space in Gibraltar, ranging from the more traditional accommodations found in the city centre to the modern, built for purpose office developments in the Midtown, and West Side districts, as well as in the World Trade Centre. There is also a selection of serviced office/hot desking service providers in Gibraltar (e.g., The Worklab, Regus, and others).
Registration formalities for a new business in Gibraltar
All new businesses establishing in Gibraltar are required to register with the Income Tax Office and the Employment Service in Gibraltar. This process was, for a long time, onerous and time consuming. In January 2021, the Government of Gibraltar announced the establishment of a ‘one stop shop’ for all business registration requirements. The Business Liasion unit at the Ministry for Business has been established to “assist members of the public with the formalities of setting up a new business in Gibraltar thus ensuring that the process is hassle free for the individual. The Business Liaison Team will assist with all the required documentation which needs to be submitted and will liaise with the relevant Government Departments to ensure everything is processed in a timely manner.”
It is anticipated that, in a second phase, the Business Liaison unit will offer an appointment-based service that will enable new business owners to address all registration requirements in one meeting. Currently, pending Covid-19 restrictions, the appointment-based service is yet to be introduced.
Taxation in Gibraltar
Full details of Taxation in Gibraltar and how it applies to various entities and individuals is set out in our detailed Information Guide to Gibraltar Tax.
There are many reasons, from a personal perspective, to choose Gibraltar for your business too. As a full service law firm, Hassans can assist in all aspects relating to moving to Gibraltar. An introduction to all these advantages and the key issues to bear in mind are set out in our Guide to Moving and Working in Gibraltar.
Other common issues when starting a business
Senior Associate, David Montegriffo, recently reflected on a number of issues that commonly arise in the context of setting up a business. To read about these issues and how to deal with them at the outset to avoid complication and cost for the business further down the line, click to read his insight on ‘Common issues when starting a business‘.
Benefits of opening a company in Gibraltar
- Tax: Gibraltar companies are not liable to pay tax in Gibraltar on what they earn outside of Gibraltar and there is no Capital Gains Tax, Inheritance Tax, Wealth Tax, Capital Transfer Tax, VAT or Tax on savings and investment income in Gibraltar.
- Swift incorporation: Gibraltar has a fast and efficient company incorporation process.
- Business-friendly environment: The government of Gibraltar supports the opening of business and thus seeks to encourage and facilitate business.
- Common law legal system: Gibraltar has a common law legal system based on English law which provides a familiar legal framework for businesses.
- Competitive operating costs: Gibraltar has lower operating costs than many other European countries.
- Highly trained workforce: Gibraltar has a highly skilled workforce with a strong work ethic.
- Well-developed infrastructure: Gibraltar has a well-developed infrastructure with world-class support services.