The SCF Group
EXEMPT SYNOPSIS: Exempt Companies are exempted from the local 35% Gibraltar corporate tax rate and in lieu must pay an exempt duty of £225.00 annually. From a tax planning point-of-view such companies are not ideal as they create a 'boomerang' effect as by their very definition an 'exempted' company is making a de facto declaration that tax is not paid in Gibraltar - This leads to the obvious question which is where is tax paid (?) which if not satisfied, can create significant negative tax consequences. It should be noted that the European Union has demanded that Gibraltar Exempt companies are abrogated by 2010 (see Gibraltar non-resident companies)
GENERAL SYNOPSIS: British Crown Colony - Effectively self governing in all matters save defence and foreign affairs. However, ultimate power still rests with the United Kingdom. Good efficiency. English and Spanish speaking. Excellent air and sea communications. Scandals in the 80's together with ongoing claims, mostly from the Spanish, of money laundering have severely effected this jurisdiction's reputation. In recent years local regulations have been more rigorously enforced. Unlike most other tax havens, Gibraltar has high individual and corporate taxes, although there are certain incentives for high net worth foreigners. Residents may, with certain exceptions, be taxed on their world-wide income. There are three main types of company: the Exempt Company, the Qualifying Company and the 1992 Holding Company. It is also possible to have a non-resident company. Single subscriber companies have been introduced in concurrence with EU directives. Legal system is based on English common law. Favourable company and trust statutes. Unlike Jersey, Guernsey or the Isle of Man, Gibraltar is a full member of the European Union, save for the Common Agricultural Policy,, Common Customs Tariff and VAT. Significant number of ship and yacht registrations. Growing banking sector, however, financial services district has not been as successful as hoped. There is no tax treaty network even with the UK.
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LOCATION
Situated at the tip of the Iberian Peninsula at the opening of the Mediterranean Sea with the Atlantic Ocean, north of Morocco and south of Spain. The coast of Africa is only 12 kilometres away across the Straits of Gibraltar. Gibraltar is approximately 5 kilometres long and 1.2 kilometres wide, with a population of approximately 30,000.
RELATIONSHIP WITH THE UK
ADVANTAGES OF GIBRALTAR TAX EXEMPT COMPANY
- A Gibraltar Exempt Company need only pay an annual exempt duty of £225.00 per annum in lieu of paying local corporate tax at 35%.
- All Gibraltar companies require a local registered office for the service of process but there is no specific requirement for the appointment of a registered agent.
- Both registered and bearer shares can be issued.
- There must be at least one director. A director can either be a real person or a corporate entity. Details are on public record.
- There are no nationality or residence requirements.
- There must be at least one shareholder. A shareholder can be a corporate entity and there are no nationality or residence requirements.
- Nominee directors can be supplied internally or externally. There is a disclosure requirement for Exempt companies of the name and address of the beneficial owner but all such information is protected by a legal guarantee of confidentiality.
- A full register of members and charges must be kept at the registered office in Gibraltar.
- The name of the required company should be checked with the Registrar and the ending will be either Limited or Public Limited Company.
- Developed and favourable corporate law. Statutes less bureaucratic than British equivalent.
- More corporate possibilities than in the Channel Islands
- Single subscriber companies available.
- No capital gains tax and no exchange controls.
TAXATION
The general corporate tax rate in Gibraltar is 35% although there are a number of fiscal benefits that can be 'negotiated' with the local authorities. In respect to tax exempt companies there is no tax payable save an annual duty of £225.00 per annum but it should be noted that by their very definition such companies are only 'exempted' from local taxes because they are making a declaration that they are managed and controlled outside og Gibraltar.
HOW TO INCORPORATE A GIBRALTAR COMPANY
The formation procedure is very similar to that in the United Kingdom and the Channel Islands. The principal governing legislation is based on the British Companies Act of 1929. As a result of some bad publicity, the Gibraltar Financial Services Commission is trying to enforce proper record keeping by local registration agents. Most importantly, beneficial ownership details must be supplied and a full register of members kept at the registered office address of the company. Information cannot be supplied to third parties without specific authority.
CORPORATE REQUIREMENTS
ANNUAL FEES AND GOVERNMENT TAXES
All companies must submit an annual return to the local authorities whether or not the company has traded. If a company has conducted no business, business including however the activation of a company bank account, no duty or general tax liability will exist. Qualified, 1992' and indigenous companies must keep proper and full accounts submitting the aforementioned on the specified annual return date usually before the 1st of April. Non-resident companies must submit accounts but have no Gibraltar tax liability. Exempt companies need not submit any accounts but must submit an annual return and pay the exempt duty of £225.00. Auditors need not be appointed for exempt companies.
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