Frequently Asked Questions

1. What is the standard rate of corporation tax in Gibraltar?

With effect from 1 January 2011, the standard rate of corporation tax is 10% for Gibraltar businesses, or 20% in the case of utility companies and companies enjoying and abusing a dominant market position. Thereby making setting up a business in Gibraltar significantly more rewarding when compared to other jurisdictions. Companies are taxed on profits accrued in or derived from Gibraltar i.e. territorial basis of taxation.

In the case of companies licensed and regulated in Gibraltar, the profits are deemed to accrue in or derive from Gibraltar, except for activities carried on outside Gibraltar by a branch or permanent establishment.

2. How can an entity set up a company in Gibraltar?

When looking at setting up a company in Gibraltar, it may be best to engage the services of a suitably-qualified professional such as a local company formation agent, lawyer or accountant. The expert advice provided by such a specialist could prove invaluable be the key that opens the door to sustained business success. It is recommended to shop around for not only the most expedient professional, but for the one that ‘feels right’ to work with and offers the most value-for-money service package.

For local company formation agents, please browse:
http://www.gibyellow.gi/company_results.php?Keyword=COMPANY+FORMATION&service-search=1

For local lawyers, please browse:
http://www.gibyellow.gi/company_results.php?Keyword=lawyers&service-search=1

For local accountants, please browse:
http://www.gibyellow.gi/company_results.php?Keyword=ACCOUNTANTS&service-search=1

3. What types of businesses require a Trade Licence?

Any person wishing to buy or sell any product by way of business in Gibraltar, whether wholesale or retail, as well as engage in certain commercial activities, is required to be licensed under the Trade Licensing Act 1978. A Trade Licence is also necessary to obtain a Customs Code for the importation of goods in commercial quantities.

Please note that in order to legitimately carry out any construction activities, the developer is required to obtain a Trade Licence. Nonetheless, a Temporary Trade Licence may be granted for the duration of a project, which will be issued to the site or property being developed or to the developer’s base of operations. Alternatively, the developer may subcontract the services of any other company. Any subcontractors, however, are likewise required to obtain a Trade Licence.

Commercial Activities that require a Trade Licence include:

• Building Contracting
• Carpentry
• Electrical Contracting
• Decorating
• Hairdressing
• Manufacturing
• Joinery
• Painting
• Woodwork
• Property Development
• Plumbing
• Catering*

*Catering includes canteens, caterers, clubs, hoteliers and publicans
Copies of the Trade Licensing Forms can be obtained from the Downloads section.

4. What is the setting up process in Gibraltar?

5. Is the service offered by the InvestGibraltar Office free??

The InvestGibraltar Office acts as a bridge between the private and public sector. Since its inception in 2005, the InvestGibraltar Office has continued to support registered businesses in Gibraltar as well as helped those that have wanted to set up, diversify or expand an activity through investment in Gibraltar. The InvestGibraltar Office to this day offers a first-rate yet free service that is both friendly and professional at all times.

6. What Government Funding Schemes are available?

Government/EU sponsored schemes, loans or grants can be obtained if the proposed project meets the relevant eligibility criteria and contributes towards the economic policy of the region. A range of schemes is available to assist mainly small and medium sized enterprises that make an investment in Gibraltar to start up or expand thier business in Gibraltar.

Such schemes include the following:

• Development Aid – Any person planning, or in the process of carrying out a development within Gibraltar, can apply for a Development Aid Licence. The motive of the Development Aid Act is to encourage investment in Gibraltar by way of development that produces a tangible and substantial benefit to the economy. The principal Act is the Income Tax Act.

For more information, please contact the Development Aid Secretary, Ministry for Enterprise, Development, Technology & Transport, Suite 771, Europort, Gibraltar, Tel: +350 20044993, Fax: +350 20047677, ernest.francis@gibraltar.gov.gi

• European Union Funds – Structural Funds are the European Union’s main instrument for supporting social and economic development across the EU. The two main Programmes Gibraltar benefits from under the 2007-2013 Programming Period are both from the Competitiveness and Employment Objective namely ERDF (European Regional Development Fund) and ESF (European Social Fund). Gibraltar also participates in Strands B and C of the European Territorial Cooperation Objective (Interreg), aimed at strengthening transnational and cross-border cooperation through joint local and regional initiatives.

Regarding eligibility for the Small Grants Scheme or ERDF Projects, wholesaling, retailing, financial services and mobile investments are areas of commercial activity that are not eligible for EU Funding. For more information concerning a particular project, please contact the EU Programmes Secretariat, Tel: +350 20073255, Fax: +350 20071406, info@eufunding.gi, www.eufunding.gi

7. What points should be considered prior to starting up a business in Gibraltar?

Prior to starting up, it is important to consider the following:

• Going into business – Setting up and running a business in Gibraltar requires a substantial commitment since it will be a notably time-consuming undertaking. Being completely focused, dedicated and able to aptly prioritise from the onset is a definite prerequisite. Being one’s own boss and running a successful business can be fantastically rewarding. However, one must first possess or acquire the right qualities and attitude in order to set up and manage a potentially lucrative operation.

• Marketing Research – Establishing if there is a genuine market demand for a business’s products or services can only be achieved by conducting market research. This is performed by gathering primary sources of information via undertaking questionnaires, surveys, face-to-face interviews and focus groups as well as assessing secondary sources of information gleaned from studies previously performed by government agencies, chambers of commerce, trade associations or other institutions.

• Business Structure – Determining a business structure to trade under is an important commercial decision that may be best addressed with a suitably qualified professional such as a local accountant, business advisor, company formation agent or lawyer.

• Customer knowledge – Understanding the needs, wants and aims of customers is essential if a business is to align its processes, products and services to build valuable customer relationships. If a business sells products and services that people do not want or need to buy, or offer sought after products and services at unreasonable prices, or from an unsuitable location, the business will have to research and develop new, marketable products and services, offer reasonable prices or relocate to a better location to ultimately avoid closure.

• Human Resources – Businesses need to hire and manage the right people with the right skills and attitudes to effectively undertake specific roles. Hiring people is one of the most challenging decisions a business owner has to make, but without the right people in place, a business is destined to fail.

• Competition – Rivals should never be underestimated or disregarded. Thoroughly studying their strengths and weaknesses and then offering improved products or services, prices or after-sales care in view of gaining a competitive edge is a viable tactic that is all too often used by many in the gung ho world of business.

• Expert Assistance – The expert advice provided by a local specialist could be the key that opens the door to sustained business success. It is always, however, recommended to shop around for not only the most expedient professional but for the one that ‘feels right’ to work with and offers the most value-for-money service package.

• Main causes of failure – The majority of start-ups fail because proper market research was not conducted beforehand, the wrong people were employed, unrealistic expectations were set or insufficient funds were kept for contingency. Not monitoring potential pitfalls or adapting to changing market trends has similarly disastrous consequences.