The economy of Gibraltar has a number of specific features, most of which stem from its small size in terms of the territory and population. It indigenous resources are limited. Almost no part of the land area is capable of supporting any kind of agriculture and the small size of the local market is a constraint on the development of many types of domestic economic activity.

In the absence of manufacturing activity of any significance and the lack of other indigenous resources, the economy is heavily dependent on imports, not only for its food and consumer goods but also for building materials, construction equipment and fuel.

Gibraltar’s economy can best be described as a ‘service economy’.

Traditionally it has provided services to the Ministry of Defence augmented by retail and tourism. The economic base of Gibraltar has changed drastically over the last fifteen years with the very significant rundown of the Ministry of Defence. This situation has shifted the economy from public to private sector control.

The current main sectors of the economy today are financial services, tourism/retailing and Port services including ship repair and ship conversion. New economic sectors being promoted are light manufacturing telecommunications and import/export operations. Already some headway has been made with the setting up of a Wine Bottling Plant and the establishment of Satellite Control Centres from the Rock with other similar projects being pursued.

Despite its modest population size (30,000) the economic infrastructure of Gibraltar is highly developed. Its geographic positioning and its distinct multi-ethnic cultures have facilitated a spirit of self sufficiency. Linked to it stable governmental system and sterling linked financial independence, Gibraltar’s economic environment is novel within the Mediterranean area and lends itself to diversification development, with all necessary support services for new business growth being in place. The external perception of Gibraltar is that its economy is perhaps larger than it is, this may be due to the increasingly international focus of economic activity.

Notwithstanding these limitations, Gibraltar’s geographic positioning provides access to a regional market in the Western Mediterranean of over 50 million people and 350 million in the European Union. The Port has the handling facilities to encourage schedules marine cargo services to selected destinations and possesses potential for the development of marine related manufacturing and service support. To date these have been under exploited. Also in this context, there are high quality fully serviced manufacturing facilities within the New Harbours complex and additional site space for further limited development with the harbour area. Thus Gibraltar can provide an inward investment opportunity for niche businesses requiring its blend of facilities and resources.

The Government of Gibraltar is promoting awareness of Gibraltar as an attractive manufacturing and distribution centre for non-European companies seeking to develop and maintain trading relationships within the Single European Market. The New Harbours, a free-port zone, where special benefits apply, comprises warehousing, industrial workshops and office space, is available for rental/purchase on a short or long lease term to exporting companies. The accommodation consisting of a total of 107 industrial/commercial units, is well suited to light manufacturing operations and among the advantages to companies locating there are absence of duties and taxes on imported materials, components and equipment, low rates of tax - on net profits, and rates holidays. These are also further facilities under construction. A new industrial park at the site of Lathbury Barracks (to consist of 48 units) and new premises in the area of the Port, will add to the infrastructure available to accommodate new economic activity.

There is also the possibility of duty free-access to the EC, provided that the product in question can qualify for originating status under the EC’s Generalised System of Preferences. The rules of origin vary according to product sector and can be stringent depending on the sensitivity of the product, but even without the benefit of reduced duty or duty-free access to the EC, an operation in Gibraltar can often make better commercial sense than a location within EC Customs Union of the EU. Its cash flow is improved by the absence of duties and taxes, its profits are only modestly taxed, and proximity to major European Markets is no less good.

Gibraltar’s position within the EU is also unique. Article 290(4) of the Treaty of Rome provides that the Treaty shall apply to ‘European territories for whose external relations a Member State is responsible’.

Gibraltar’s special circumstances were taken into account by the UK on accession and Article 28 of the Act of Accession granted three derogations.

Gibraltar is exempted from complying with Community rules on:

Common Customs Tariff

Common Agricultural Policy

Harmonisation of Turnover Taxes (notably Value Added Tax)

Gibraltar enjoys a developed communications infrastructure and efficient power and water utilities, features that are frequently deficient in many Southern European locations. These facilities are fundamental to the needs of modern manufacturing and service businesses alike. As a net importer of goods, the potential exists for exporters to negotiate favourable transport rates where containers would otherwise return empty to their place of origin.

Gibraltar is already an established name in the field of financial services, marine services and tourism and has the potential to extend its service industry activities in each of these areas. The business community is oriented to risk investment and while there is virtually no indigenous manufacturing sector, there is the potential to encourage joint venture greenfield start up ventures.

Gibraltar’s independent jurisdiction, first class regulatory system and fiscal regime has been a catalyst in the encouragement of the financial services sector, providing some high quality professional jobs and administrative employment. The absence of VAT and the beneficial tax regime offered to those undertaking international trade has helped to develop Gibraltar’s commercial base.

One of the specific fiscal advantages available is the "Qualifying Company" regime. This vehicle is suitable for a wide variety of purposes including the development of manufacturing businesses that are export focused. The Corporate tax, set at a rate agreed with the Gibraltar authorities of between 0-35%, plus an ability to import raw materials ‘duty free’ are attractive features which goes some way to offsetting one of the negative aspects of peripheral location.

The economic vitality of Gibraltar and its culture has stimulated a commendable education ethos. The facility of children to receive third level education in the UK through grant provision also endows the population with a significant proportion of graduate talent. The high incidence of graduates who choose to return to Gibraltar after training provides stability for promoters of inward investment projects in that they have the potential to employ well educated and committed/productive staff.

The Government’s current commitment to encourage wealthy individuals to take up residency in Gibraltar also serves to introduce new skills and entrepreneurship to the territory. In turn this can also help to stimulate new manufacturing and tradable service activities, especially among those whose assets include owner manager businesses.

There are regular daily scheduled air-flight services to Gatwick Airport in London. Other scheduled air-flight services include Luton and Manchester in the United Kingdom and Casablanca in Morocco. All these Airports provide onward worldwide connections.

Regular road haulage services operate to all parts of Europe, by a growing number of overland transport services.

Gibraltar is also served by a number of international shipping lines from North Europe. These provide regular international shipping line services to Northern Europe, North Africa and a number of Mediterranean Ports.

A regular ferry service operates from Gibraltar to Tangiers, Morocco.

A recently constructed Cruise Liner Terminal, recently constructed provides modern facilities for the passengers of the many cruise liners that call at Gibraltar.

In addition, the Port of Algeciras in Spain, some 15 kilometres away overland, is one of the major Container Ports in the Western Mediterranean and provides services to virtually every continent.

Gibraltar is not directly connected to any rail system. The nearest railway station is located some seven kilometres over the border in Spain at San Roque. The Spanish railway company, RENFE, connects San Roque with the rest of Spain and the European network.

Recognising that excellent telecommunications are of vital importance to successful business operations, the Gibraltar Government has entered into separate joint ventures to enhance Gibraltar telecommunications infrastructure.

Gibraltar Nynex Communications Ltd (GNC) is a joint venture Company between the American Bell Atlantic Corporation and the Government of Gibraltar. The Company is responsible for the provision of local telephone services within Gibraltar and international calls to and from Spain.

Gibraltar Telecommunications Limited (Gibtel) is a joint venture Company between the Government of Gibraltar and British Telecom (BT), one of the world’s major international carriers, who operate Gibraltar’s international telecommunications.

The International Network is fully digitalised. Both companies have introduced many products and services which match those offered by leading telecommunications operators anywhere in the world. They provide a full range of state of the art, digital, satellite, mobile and internet communications services.

The Government of Gibraltar believes there are significant opportunities for international telecommunications business to be undertaken from the Rock, especially in the expanding area of E-Commerce.

Company Formation

The first step when forming a Gibraltar Company is to ensure that the proposed name is acceptable to the Company Registrar. Once the name is approved, the following documents require to be submitted in accordance with the provisions of the Companies Ordinance:

Memorandum of Association

Articles of Association

Declaration of Compliance

Notice of Situation of Registered Office

Statement of Nominal Share Capital

A registration fee of £50 is payable at the time of presentation of the documents. The Memorandum and Articles of Association must be embossed with the appropriate Stamp Duty. The time taken to incorporate a Company is normally between one and two days. A Certificate of Incorporation is issued.

Under Gibraltar legislation only barristers or acting solicitors of the Supreme Court may incorporate Companies for gain.

Trade Licences

In accordance with the Trade Licensing Ordinance a Company wishing to apply for a business/trade licence requires to make an application to the Trade Licensing Authority. A further requirement is to advertise in a local newspaper and the Gibraltar Gazette a notice of intention to apply for a Trade Licence. The notice requires to include the name of the applicant, postal address, business name, premises at which the business is to be carried on and details of the licence it is intended to apply for.

Fourteen days are allowed to receive any objections. After the fourteen days have elapsed the application is referred to the Trade Licensing Authority for consideration. The process normally takes approximately four to five weeks. If approved, a Trade Licence will be issued on payment of a £40 fee.

Employment Procedures

Once the Company has been duly incorporated and obtained the necessary Trade Licence, it requires to register with the Employment and Training Board, in accordance with the Business Trades and Profession (Registration) Ordinance 1989.

A "Certificate of Registration" will then be issued on payment of a fee of £25. This Registration is renewed annually at a cost of £10.

The Company, as employer, must then proceed to register all its employees including any working directors. "Notice of Term of Engagement" forms (ie Contracts) must be registered with the Employment and Training Board within two weeks of any employee taking up employment. With each registration the Company has to pay a fee of £26 (towards the Insolvency Fund) which is payable annually on anniversary of start date.

Similarly, if an employee terminates employment within a firm a "Notice of Termination of Terms of Engagement" must be completed within 14 days and registered with the Employment and Training Board.

Any vacancy an employer may wish to fill must be registered with the Employment and Training Board, allowing two weeks prior notification to start date.

It follows that any "Notice of Terms of Engagement" must have been preceeded by the corresponding "Notification of Vacancy".

Social Insurance

There are two contributory schemes of Social Insurance:

The Employment Injuries Insurance Scheme which provides in return for regular weekly contributions, cash benefits for those who, because of an accident at work or certain industrial diseases are unable to work or are disabled, and for widows and widowers and certain other dependant of industrial casualties; and

The Social Insurance Scheme which provides in return for regular weekly contributions allowances on widowhood and for guardians or orphans; payment at childbirth and death; unemployment benefit and pensions on reaching pensionable age.

A married man’s contribution provides not only for his personal benefits but also for certain benefits for his wife and family.

In general, everyone over the age of fifteen who is self-employed or employed in Gibraltar is compulsorily insurable.

The main rate of contribution for a person who has attained the age of 18 but are under 65 is £42.34 per week, £18.87 which is payable by the employee and £23.47 by the employer. This rate includes contributions under the Employment Injuries Insurance Scheme, the Group Practice Medical Scheme and it also includes the Training Levy of £2.00 per week which is only payable by the employer. The rate for the self employed is £21.80p per week.

Contributions

Contributions are generally paid weekly by affixing an adhesive insurance stamp on an insurance card on the space indicated on it for the appropriate week. This is an employer’s responsibility as the employers are empowered to deduct from the insured person’s current wages or salary the insured person’s share of the contribution. The Insurance Stamps can be obtained from Post Offices.

Insurance Cards and Benefits

Each Social Insurance Card bears a social insurance number which generally is also the number of the insured person’s Identity Card.

Each card must be exchanged for a new one at the end of the contribution year. It is important that the card to be exchanged be properly completed by the insured person as the right to Social Insurance Benefits depends on the insured person’s contribution record.

The benefits under the Social Insurance Scheme are:

Maternity Grant

Widow’s Pension

Widow’s Mother Allowance

Injury at Work

Death Grant

Unemployment

Old Age Pension

European Economic Community

There are European Community Regulations governing the application of social security schemes to employed persons, to self-employed persons and to members of their families moving within the Community.

The fifteen Member States of the Community are Belgium, Denmark, France, Federal Republic of Germany, Greece, Republic of Ireland, Italy, Austria, Sweden, Finland, Luxembourg, the Netherlands, Portugal, Spain and the United Kingdom (which includes Gibraltar as a British Dependant Territory).

To facilitate the operation of the EEC Social Insurance Security Regulations between Gibraltar and the United Kingdom, an agreement was concluded with Gibraltar which treats the United Kingdom and Gibraltar as separate States.

As a result of the above, if after you become insured in another Community Country, you need to claim benefit there, then any contributions you have paid in Gibraltar or any other Community Country, may be taken into account to help you to qualify or improve your entitlement.

Group Practice Medical Scheme

Any person who is insured under the Social Insurance Scheme is required to contribute to the Group Practice Medical Scheme which is administered by the Gibraltar Health Authority.

Insured persons are therefore entitled, on application, to be registered in the Scheme. The Scheme also provides coverage for the family of the insured person if they are ordinarily resident in Gibraltar.

Basically contributors and dependants are entitled to free medical but not dental treatment. Should the local facilities not be adequate to provide the required level of medical attention, these patients are sent to the United Kingdom for treatment at Government’s expense.

Patients require to meet a proportion of the cost of prescriptions. The charge is £2.50 per item.

Gibraltar Income Tax

There is no capital gain tax, wealth tax, inheritance tax, estate duty or value added tax in Gibraltar.

Corporate tax in Gibraltar is set at the rate of 35%.

There are no exchange control restrictions in Gibraltar. Gibraltar’s currency is the pound sterling although the Government issues its own currency notes and coins.

The assessment and collection of Income Tax is governed by the Income Tax Ordinance.

Income Tax is charged on income accruing in, derived from or received in Gibraltar by any person or company.

Income Tax is levied under six headings:

gains or profits from any trade business, profession or vocation;

gains or profits from employment alllowances and benefits in kind;

dividends and interest;

any pension, charge, annuity or alimony;

rents, royalties, premiums and any other profits arising from property;

the income of any person from the occupation of premises for residential purposes.

The first £600 of interest from deposit in any one or more building societies or in the Government Savings Bank in Gibraltar, received by a resident person is exempt from tax.

Interest from deposits in Gibraltar in any bank or building society received by a non-resident person is exempt from tax.

Ordinarily, resident when applied to an individual, means an individual who resides in Gibraltar.

When applied to a Company it means:

a company, the management and control of whose business is exercised in Gibraltar;

a company which carried on business in Gibraltar and the management and control of which is exercised outside Gibraltar by persons ordinarily resident in Gibraltar.

Income Tax is charged for each year of assessment running from 1^st July in one calendar year to the 30^th June in the next.

The taxpayer’s aggregate income, other than exempt income, is the "assessable income".

The "taxable income" is the assessable income less the deductions for personal relief.

There are various allowances and deductions such as:

(1) Personal allowances £2,125 per annum

(2) Wife allowance £2,025 per annum

(3) Child allowance £ 725 per annum for the first child (4) Life Insurance Up to 1/6 of assessable income

Mortgage Interest etc Unlimited

Individuals are charged tax on their taxable income which is arrived at by deducting personal allowances from the assessable income at the following rates:

for every pound of

the first £1,500 of taxable income 20%

the next £5,500 of taxable income 30%

the next £5,500 of taxable income 35%

the next £3,500 of taxable income 40%

the next £3,500 of taxable income 45%

the remainder of taxable income 50%

It is the employer’s duty to deduct income tax from the pay of his employees whether or not he has been directed to do so by the Income Tax Office. If he fails to do this he may be required to pay over to the Treasury the tax which he should have deducted and in addition, may incur liability to penalties.

The "Pay as you Earn" method of deducting income tax from wages and salaries applies to all income from offices or employment. Thus "Pay as you Earn" applies not only to weekly wages but to monthly salaries, annual salaries, bonuses, commissions, director’s fees, pensions and any other income from an office or employment.

Under "Pay as you Earn" the amount of income tax which the employer has to deduct on any pay-day depends on:

the employer’s gross pay; and

his "code" which has been determined by the Income Tax Allowance to which he is entitled.

The employer first works out the gross pay due to the employee. He then refers this amount to the appropriate tax table and at a glance the tax table will show the amount to be deducted.

Incorporating a Company

The Gibraltar Companies Ordinance is based on English Legislation and has recently been amended to include relevant EU Directives. A Gibraltar company can be incorporated within two to three days. Upon payment of an additional fee, same day incorporation can be effected. Clearance of the company’s name is required prior to incorporation.

The following types of companies are available:

Limited by shares (public or private)

Limited by guarantee, with or without share capital

Unlimited, with or without share capital

Incorporated companies must comply with the following:

In the case of a private company the minimum number of shareholders is one. For public companies the minimum number of shareholders is seven. Corporate and nominee shareholders are permitted. Bearer shares may be issued but are not practical in the case of exempt companies.

A Gibraltar company is required to maintain a registered office in Gibraltar where the Statutory Books are kept. A sole director in the case of private company is permitted although a minimum of two is advisable. A public company must have at least two directors. Directors are not required to hold qualifying shares and corporate directors are permitted.

An AGM of shareholders is required to be held once a year albeit anywhere in the world.

Many of the facilities available in Company Management in Gibraltar are unique within the European Union. The benefits include speedy incorporation, extensive company management services and favourable fiscal advantages.

The Registry

The Gibraltar Companies Registry, operated on a commercial basis (Companies House (Gibraltar), is fully computerised. A company is required to file returns to include the registered office, directors, allotments of shares and once per annum, an annual return. Company searches and name clearances can be carried out within hours.

Note

Financial Services

It should be noted that companies undertaking financial services (whether exempt, qualifying or otherwise) are subject to licensing and regulation by the Financial Services Commission (FSC). These requirements are distinct and an addition to those that are outlined in the section (see FSC website).

Gibraltar is self sufficient in terms of its essential services, and generates its own electricity and produces its own water through a process of desalination/reverse osmosis. There is no gas utility in Gibraltar.

The cost of utilities reflects the small consumer base of the territory.

Water Supply Services

Water supply services to the territory of Gibraltar are provided by Lyonnaise des Eaux (Gibraltar) Ltd ("Lyonnaise") under a Licence Agreement with the Government of Gibraltar issued under the provisions of the Public Health Ordinance. Gibraltar has a dual water distribution system consisting of two networks, one for the supply of potable water and the other for the supply of sea water. The water supply is reliable and readily available.

Fresh water is collected, produced, extracted and purchased by Lyonnaise, made potable, stored and distributed to customers via a distribution system and subsequently supplies sold through individually metered connections. The potable water sold complies with the provisions of the Public Health Ordinance which incorporated the EEC directive 80/778/CEE regulating the quality of water to be used for dietetic purposes.

Public Services & Utilities

The current Potable Water Tariffs are as follows:-

Note: 1 Unit = 100 Litres

A Shipping £0.35 per unit

B Hospitals & Schools £0.50 per unit plus Standing Charge of £4.00 per calendar month

C Hotels £0.35 per unit plus Standing Charge of £4.00 per calendar month

D Domestic (Primary) £0.18 per unit for the first 4500 litre per calendar month plus Standing Charge of £1.50 per calendar month. (Secondary) £0.45 per unit in excess of 4500 litres

E Swimming Pools £1.00 per unit plus Standing Charge of £4.00 per calendar month

F Industrial £0.40 per unit plus Standing Charge of £4.00 per calendar month

G Government £0.50 per unit plus Standing Charge of £4.00 per calendar month Departments (Inc MOD)

H Commercial £0.40 per unit plus Standing Charge of £4.00 per calendar month

Sea water is used for fire fighting, street cleaning, flushing of sewers, flushing of toilets and other sanitary purposes where the use of potable water is not essential.

Electricity Services

The supply of electricity is readily available and reliable. Generating capacity easily exceeds maximum demand. There is no foreseen difficulty in providing any reasonable request for supply. Supplies are available for 240 volts A C, single phase, 50Hz for small consumers and 415 volts AC, three phase, 50Hz for larger consumers.

The cost of electricity is as published from time to time in the Gibraltar Gazette. The Fuel Cost Adjustment Surcharge stands at 2.81p per unit, this is in addition to the published tariffs and is levied on all unit metered irrespective of tariff.

Scope for negotiation is limited by the fact there is a requirement for supplies to be metered and also that the prices charged by the Government for the supply of electricity shall be those from time to time determined by the Government and published in the Public Utilities Undertakings Ordinance or Rules made thereunder. There is provision for the consumer and Government to agree which of the published tariffs may apply.

Flat Rate Tariffs

Tariff No 1 – Lighting

9p per unit and in addition thereto there shall be paid a charge to be known as the Standing Additional Charge of £2 per calendar month.

Tariff No 2 – Power

8p per unit and in addition therefore there shall be paid a charge to be known as the Standing Additional Charge of £4 per calendar month.

Tariff No 3 – Tariff for Domestic Consumers

6.5p per unit and in addition thereto there shall be paid a charge to be known at the Standing Additional Charge of £2 per calendar month.

Tariff No 4 – Commercial Tariff

6p per unit and in addition thereto there shall be paid a charge to be known as the Standing Additional Charge of £3 per calendar month.

Tariff No 5 – Industrial Maximum Demand Tariff

Two-part maximum demand tariff for industrial and commercial users with a maximum demand normally not less than 5kW.

Primary Charge

£2 per month per kW of maximum demand based on a monthly half-hour rating, subject to a minimum monthly charge of £10. In addition thereto there shall be paid a charge to be known as the Standing Additional Charge of £4 per calendar month.

Secondary Charge 5p per unit for all units consumed.

Off-Peak Tariff for energy consumed at times other than the restricted hours as registered by a special meter.

Tariff No. 6 – Restricted Hours

7.00am to 2.00pm and 6.00pm to 11.00pm

Charge – 4p per unit and in addition therefore there shall be paid a charge to be known as the Standing Additional Charge of £3 per calendar month.

Tariff No. 6B – Restricted Hours

Winter period (November to March inclusive):-

10.30am to 2.00pm and 6.00pm to 9.00pm

Summer period (April to October inclusive)):-

Restrictions to be imposed at the Government’s decision as for the winter period if necessary.

Charge – 4.5p per unit and in addition there shall be paid a charge to be known as the Standing Additional Charge of £3 per calendar month.

Fuel Cost Adjustment Formula

The price set out in this Schedule of a unit of electricity shall be adjusted upwards or downwards by such amount or such method as the Government, having regard to the fluctuating cost of generating or supplying electricity, may by rules prescribe.

Development Aid

Under the provisions of the Development Aid Ordinance the Minister for Trade & Industry is empowered to approve applications for Development Aid in respect of certain development projects.

Applications for a Development Aid Licence are made to the Secretary of the Development Aid Committee.

If an application is successful, a Development Aid Licence will be granted. The Minister on the advice of the Development Aid Advisory Committee will determine what portion of the total capital expenditure in percentage terms is available for tax relief. The award reflects the strategic importance of the project and the economic and social benefits that the project will bring to Gibraltar.

The Development Aid Licence entitles the developer to relief from income tax in respect of any gains or profits until such time as the approved portion of capital expenditure has been exhausted. These profits may also be distributed between the beneficial owners of the development company free of income tax up to the amount granted in the Licence.

In addition, first time occupiers of property relating to a project which has been granted a Development Aid Licence are entitled to rates relief as follows:

The Gibraltar Enterprise Scheme

This scheme is funded by the Government of Gibraltar and offers help with seed or development capital, if it can be demonstrated that such assistance is required to start-up in business or to expand an existing business.

Help may take the form of interest reduction on bank loans, loans at special interest rates, or in appropriates cases non-repayable cash grants.

All kinds of businesses are eligible to apply for assistance except (because of EU rules) those in shiprepair and international transport.

Businesses will need to show that the proposed investment has a relatively good prospect of viability. Priority will be given to projects that will create new sustainable jobs. Full account will also be taken of the need to help people affected by structural changes in the economy.

The scheme will not contribute more than the minimum of assistance that is required. The rest has to be raised by borrowing or as equity. The maximum level of assistance will normally be limited because of EU rules to a grant, or the equivalent in loan subsidy to an amount not exceeding 100,000 Ecus (approximately £65,000) over a three year period. Further assistance can be considered after this period.

The Gibraltar in Europe Business Development Scheme

This scheme was initially set up as a project under the EU Objective 2 programme 1997-99 to assist SMEs which are eligible to benefit from EU Structural Funds. The scheme is funded by the ERDF and co-financed by the Government of Gibraltar.

This scheme has offered assistance in the form of cash grants. This scheme will continue under the Objective 2 successor programme for the period 2000-2006. Further details will be made available once the new programme is approved by the European Commission.

SMEs will be eligible to apply for assistance except (because of EU rules) those in shiprepair and international transport.

Applicants will need to demonstrate that the investment has good prospects of viability and that new employment opportunities will be created.

The scheme will not contribute more than the minimum of assistance that is required, subject to a maximum of 30% of the cost of the investment. The rest has to be raised by borrowing or as equity. The maximum level of assistance will normally be limited because of EU rules to a grant, or equivalent in loan subsidy, to an amount not exceeding 100,000 Ecus (approximately £65,000) over a three year period. Further assistance can be considered after this period.

Interreg

An EU Interreg programme exist between Gibraltar and Morocco. The programme is designed to increase the level of economic and social exchange between the ten territories. Various profits have been financed under the writing scheme including a feasibility study with the potential of co-operation with Morocco in the area of E-Commerce trade. A successor programme is likely for the period 2000-2006

General Information

More detailed information on each of the schemes and the availability of assistance can be obtained at the Business Advisory Unit at 731 Europort, Gibraltar. The Business Advisory Unit will help you identify which scheme is best suited to your particular business proposal and will help you to prepare an application for assistance.

Applications

Application forms are available for collection at the Business Advisory Unit, Department of Trade & Industry at Suite 731, Europort, Gibraltar, telephone no. 20052052, fax no. 20071406.

Land in Gibraltar is at a premium, because of its scarcity.

In recent years the major development projects have been built on land reclaimed from the sea and on land and buildings which the Ministry of Defence have transferred to the Government of Gibraltar under the provisions of the Lands Memoranda.

It is the policy of the Government of Gibraltar to dispose of land by way of open tender and potential sites for development purposes are advertised from time to time.

COMMERCIAL PROPERTY RATES

Rates are payable on all properties in Gibraltar.

In basic terms rates are calculated as follows:

For Commercial Properties - Rent (or hypothetical rent)

Less the Statutory Declaration determines the Net Annual Value

A charge of 57p for every pound of net annual value gives the annual rates payable. Offices are charged at 62p for every pound.

Rates are paid on a quarterly basis.

Gibraltar’s permanent workforce is in the order of 13,700. (1997) This figure excludes the self employed.

There are a wide range of skills available in Gibraltar. These result from the training and specialisation’s taken up by our students at University level, and the qualifications offered by the Schools and College of Further Education. All the professions are well represented in Gibraltar. Our skills base is complemented by many non-Gibraltarian that work in the economy.

In recent years undergraduates have concentrated in areas relating to employment in financial services with law and accountancy being especially popular. Disciplines such as Business Studies and Economics have also become very popular. Generally students cover the whole spectrum of courses offered by the UK Universities.

Nearly 50% of the school population is now benefiting from post 18 year old higher education in the United Kingdom.

Wages in the private sector are broadly in line with the United Kingdom. There are a number of specific sector wide pay agreements agreed between the Trade Unions and the Industry, these are reviewed annually. They include among others the construction and the retail and wholesale trades.

In support of Gibraltar’s objective to attract skills not available locally, a number of schemes have been introduced to encourage individuals with specialised skills to establish themselves on the Rock. The three major schemes are the following:-

The Qualifying Individuals Rules 1999 allows certain types of wealthy individuals or those possessing special skills not currently available in Gibraltar but which are important for the economic regeneration of Gibraltar to apply for a special tax status. The rate of tax is subject to negotiation with the Gibraltar authorities.

2. Qualifying (Category 3) Individuals

An exempt of qualifying company with a physical presence in Gibraltar and certain Statutory Bodies may, under certain circumstances, apply to the Finance Centre Director for a certificate designating an individual as a Qualifying (Category 3) Individual.

The certificate fixes the amount of tax payable by the individual from emoluments earned from this employment/position and most other classes of income to £10,000 per annum only. Any other taxable income is, in general, assessed in the same manner as for tax residents.

The certificate may be issued for a period of up to 3 years but may be extended by the Finance Centre Director for a further period of up to 3 years.

The individual must possess skills or experience which are:

essential to the operation;

not currently available in Gibraltar; and

important for the economic regeneration of Gibraltar

In addition they must have accommodation available for their exclusive use, and their families, in Gibraltar and should not have been employed in Gibraltar during the previous five years (the Finance Centre Director may, however, waive this requirement).

There is a non-refundable fee of £500 for the issue, or renewal, of the certificate.

3. Qualifying (Category 4) Individuals

A category 4 individual is assessable to income tax at the rate of £5,000 per annum if his taxable income for the year does not exceed £50,000 and at the rate of £10,000 per annum otherwise.

The rules and conditions pertaining to this status are similar to those pertaining to Category 3 individuals (see above). However, the company making the application must also satisfy the Government that connected with the appointment of the Category 4 individual it has created a new and additional employment opportunity in Gibraltar.

Gibraltar is keen to develop as a premier location for the establishment of e-commerce business. The Government and industry are working to maximise the attraction of Gibraltar as a preferred location. Certain features of our infrastructure and status make Gibraltar an extremely strong contender for the role of a major player in this expanding area.

In summary these are the following:-

A multi-lingual labour force. This is comprised of both local Gibraltarians (who are fluent in English and Spanish) and of other nationals working in Gibraltar who have brought an extended range of linguistic skills to the territory.

A tax regime that is very attractive to international investment. This includes an exemption from any form of VAT.

Very well developed telecommunications with the proposed liberalisation of the market due in the next few months. This will introduce further price competition.

An excellent legal framework based on English common law. It is expected that specific legislation to facilitate e-commerce will be introduced in the near future.

Government commitment to provide such further infrastructure requirements as are necessary to enhance the prospects in this area, including all training and human resource demands.

Position as part of the EU. This allows Gibraltar access to various markets, in particular the single market in financial services.

Further enquiries should be directed to the Business Advisory Unit, DTI, Europort Suite 771 Gibraltar. Tel: (350) 20052052 Fax: (350) 20071406

E-mail: dtibusines@gibnynex.gi

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The opportunities and incentives that Gibraltar offers potential inward investors may be summarised as follows:

An opportunity to manufacture and distribute high added value products to the markets of the EU, Southern Europe and North Africa;

An ability to access raw materials internationally with relative ease;

An opportunity to develop a profit oriented capital base at low levels of corporate tax in a stable currency and with few restrictions in moving that capital or repatriating dividends;

A high quality environment for corporate accommodation and modern services workspace for manufacturing and distribution; and

An effective modern communications infrastructure with the necessary business support services on site;

Stable political and economic environment;

The benefits of membership of the EU, including access to the EU market on financial services;

Free port facilities that are outside the Common Customs Union;

Developed port facilities for cruise liners and cargo handling;

International airport with schedules flights to the United Kingdom and North Africa and proximity to Spanish regional airports at Malaga, Seville and Jerez (within 1¹/₂ hours drive);

One of Europe’s most advanced fibre-optic telecommunications network;

A multi-skilled workforce and training assistance to update skills in accordance with the investments opportunities as they arise.

Well developed business services infrastructure including financial services;

Generous tax regimes with low levels of withholding taxes on repatriation of profits;

No value added tax;

An excellent base for the establishment of international business in areas as diverse as financial services, trading, light manufacturing and shipping related facilities;

English speaking environment favoured by most international businesses providing pivotal access to regional markets in the Mediterranean (Europe & North Africa);