HM Government of Gibraltar notes the press release issued by the Gibraltar Federation of Small Businesses in relation to the proposed new Residency Policy.

The Government welcomes the constructive tone adopted by the GFSB and notes that the Federation recognises the Government’s objective of protecting public services and ensuring Gibraltar’s long-term fiscal sustainability.

The Minister for Health, Care and Business, the Hon Gemma Arias-Vasquez MP, has already responded directly to the GFSB’s representations in less than 24 hours by way of a detailed four-page letter addressing the practical points raised by the Federation.

This demonstrates the seriousness with which the Government is treating the concerns of small businesses and the speed with which the Minister has engaged with the GFSB on this important issue.

The Government reiterates that Gibraltar is open for business and will remain open for business.

The new residency framework is not a policy about preventing people from working in Gibraltar. It is a policy about residence in Gibraltar.

Many people already work in Gibraltar while living outside Gibraltar, and that will continue to be the case. The Government’s responsibility is to ensure that those who reside in Gibraltar do so on a basis that is fair, sustainable and grounded in genuine contribution.

In an increasingly attractive Gibraltar, particularly in the new Treaty environment, it is not realistic or responsible to proceed on the basis that everyone who works in Gibraltar will automatically also be able to live in Gibraltar. This has never been the case. Gibraltar has limited land, limited housing stock and public services which must be protected for the whole community.

The GFSB has raised concerns about the proposed £37,500 earnings threshold and its possible impact on recruitment and retention. The Government understands those concerns. However, it is important to be clear that this threshold is not a barrier to employment in Gibraltar. It relates to the circumstances in which residence in Gibraltar may follow.

It is therefore important not to conflate eligibility to work in Gibraltar with eligibility to reside in Gibraltar. The figure of 67% of all jobs in Gibraltar being under the threshold conflates these two parts. Pursuant to the 2024 Employment Survey, 13,844 jobs out of the 31,634 jobs in the economy are cross frontier workers. The figures we are looking at therefore need to be clear. 44% of the workers which the GFSB are citing are cross frontier workers who would not be seeking RESIDENCE in Gibraltar. The remaining 23% will largely be covered by the exemptions.

The £37,500 figure is based on average gross annual earnings in Gibraltar. It is intended to provide an objective benchmark for a meaningful level of economic contribution. At the same time, the Government recognises that Gibraltar’s labour market is varied and that there will be sectors, skills and circumstances where flexibility is required.

That is why the framework will include flexibility for skills, labour shortages, sectoral needs and Gibraltar’s wider economic interests. The policy is not intended to prevent businesses from recruiting people to work in Gibraltar.

The Government also notes the GFSB’s comments in relation to British nationals. The Government rejects any suggestion that the policy is anti-British. British nationals who come to Gibraltar to contribute to the economy and form part of our community will continue to be an important part of Gibraltar’s economic fabric.

The Government has consulted with the Convent and the FCDO on the proposed rules. At no time has it been suggested that these necessary and proportionate changes are anti-British in any way. They are not.

The GFSB has also raised concerns about new businesses and self-employed individuals. The Government accepts that genuine entrepreneurship and investment must not be discouraged. At the same time, the Government must ensure that companies or arrangements are not created primarily as a route to residence without genuine commercial purpose or real economic contribution. The Government will keep this under close review to ensure that the provisions operate proportionately.

In relation to the proposed age threshold of 55, the Government’s rationale is long-term sustainability. Government must take into account the long-term cost of public services and the need for a sustained contribution before access to those services is available. However, the policy is not intended to exclude people who can make a genuine and valuable contribution to Gibraltar. Flexibility will therefore be available where Gibraltar’s interests require it.

The Government also agrees that ministerial discretion must operate within a clear structure. Discretion is necessary to avoid rigid and unfair outcomes, particularly in exceptional cases or where Gibraltar’s interests require flexibility. However, the Regulations expected next week will provide further detail and appropriate safeguards, including review mechanisms, so that the system is not arbitrary and can be applied consistently.

The GFSB has asked for data and analysis underpinning the policy. Whilst the Government is unable to share confidential or sensitive information, the Chief Minister has already set out publicly in Parliament the scale of the issue which led to the temporary pause. In his statement to Parliament on 15th October 2025, as recorded in Hansard, the Chief Minister explained that over the previous three years Gibraltar had experienced an exceptional rise in new arrivals, with over 3,000 people migrating to Gibraltar between 2022 and 2024: 952 in 2022, 896 in 2023 and 1,245 in 2024.

The increase since the conclusion of the UK-EU Treaty negotiations has been unprecedented. The Government therefore considers it necessary and responsible to put in place a clearer framework before the new Treaty environment is fully implemented.

The Government also confirms that the Regulations expected to be published next week will provide further clarity on transitional cases, family provisions, the position following termination of employment, skills and labour shortages, discretion and review mechanisms.

The Government has already taken on board practical concerns raised by the GFSB. In particular, the Regulations will address the concern that applicants should not be placed in the unfair position of having to make an unconditional rental or purchase commitment before their application has been determined. The Government has also considered the GFSB’s concerns in relation to the period following termination of employment, and the Regulations will provide for a more proportionate approach.

Minister Arias-Vasquez said:

“Having led the GFSB for many years, I fully understand the pressures that small businesses face. I understand the importance of recruitment, retention, certainty and confidence.

“That is precisely why I have engaged directly with the GFSB and why I have responded to their concerns in detail, in writing, in less than 24 hours.

“But I also have a responsibility, as a Minister of the Government of Gibraltar, to ensure that our residency system is fair, sustainable and capable of protecting our public services for future generations.

“This policy is not anti-business. It is not anti-British. It is not about closing Gibraltar’s doors. It is about making sure that residence in Gibraltar is based on genuine contribution and that the system cannot be abused.

“Gibraltar needs business. Our businesses, employers and employees generate the economic activity and tax revenues which sustain our public services. The Government would never seek to damage business in any way, shape or form.

“At the same time, we cannot ignore the reality that Gibraltar has limited land, limited housing stock and public services that must be protected. Responsible government means putting in place a clear framework before the new Treaty environment is fully implemented.

“The policy is not set in stone. We will monitor its implementation carefully and consider adjustments where practical issues arise. We will continue to engage with the GFSB, the Chamber and other stakeholders to ensure that genuine business concerns are properly understood.”