Gibraltar is located in Europe, specifically at the bottomm of Spain to the south of the Iberian Peninsula, but even so, it is an English colony, that is to say, although it is not an integral part of the United Kingdom because it is far from it, it is a territory under the sovereignty of the British Crown. 

In only about 7 km2, approximately of habitable area, live around 34000 Gibraltarians. Gibraltar's economic activities are based on the service sector, specifically the financial sector, tourism, shipping, and telecommunications including e-commerce and online gaming.

Temperatures in Gibraltar can reach up to 40 degrees in the summer (general staying in the lows 30s) with lows of an average of 10 degrees in the winter months. There are over 300 days of sunshine. There is easy access to several sandy beaches in Gibraltar where many people spend their free time in the summer months. There are several beautiful beaches in nearby Spain within an hour’s drive. In the winter, many residents go skiing at the resort of Sierra Nevada, near Granada, which is only 3 hours drive away.

Its main language is English, but Spanish is also spoken, with the majority of its population being bilingual. The Gibraltarians are often called "Llanitos" because it is the name given to the native language of Gibraltar’s people where English is often alternated with Spanish and it’is a mixture of British English and Andalusian speech.

The currency in circulation is the Gibraltarian pound, which is on a par with the British pound, the latter being on free circulation. In the territory, you can also use euro and in some places t US dollar. There are no exchange controls regarding the remittance of funds to and from Gibraltar and the conversion of currencies.

The British Territory enjoys a public debt that is among the lowest in Europe and a GDP per capita whose forecast figures are increasing.

Gibraltar is well known among business people for its attractive tax regime and its position as a leading European financial center, and its Mediterranean flair makes it an ideal location for international business. 

A Glimpse of History 

Gibraltar is the smallest of the 14 officially recognized British Overseas Territories. 

The head of state is Queen Elizabeth II, represented by the Governor of Gibraltar. The Governor makes daily affairs based on the recommendations of the Gibraltar Parliament, but is accountable to the British government in terms of national defense, foreign policy, internal security and overall good governance.

Since the Treaty of Utrecht in 1713, Spain ceded this land to Britain, and it remains a British territory. But Spain has always claimed sovereignty over this area. 

Brexit brought many concerns for the Gibraltar community, as it relies heavily on the normal flow of people and goods across the borders, with around 15,000 workers crossing the border daily to work in Spain.

However, in December 2020, just before the Brexit agreements took effect, following months of negotiations, London and Madrid managed to reach an agreement, where Gibraltar will be recognized as a Schengen area.

Therefore, although the Rock is part of the British space, the United Kingdom is not part of the Schengen area, which is why British citizens must present a passport when entering Gibraltar, unlike Spanish citizens. Gibraltar will remain part of the European Union customs regime for the traffic of goods and transports. With this pre-agreement, of which we will not have more details until the end of June, it is expected that Gibraltar will be able to continue with its economic activities and will not be affected by it.

Living in Gibraltar 

There is virtually no crime in Gibraltar and the country prides itself on their sense of community. People can walk the streets at all hours with no danger of harm.

Cost of Living 

According to Numbeo the average monthly new salary (after tax) in Gibraltar is 2,610.42 £ or 3642.05 USD and the following table shows the most important costs that can give a reader a better understanding of the costs in the country. In order to have a comparative analysis, all the costs below are provided in USD.

Accommodation

Residential accommodation is expensive with one bed apartments in the town centre costing around £1,000 per month. For more luxurious lettings, costs can be up to £4,000 a month for 4 bed centrally located apartment. There are, of course, cheaper alternatives available. Many employees choose to live across the border in Spain where much cheaper accommodation is available. Gibraltar, in fact, has a substantial number of cross border workers, with estimates at around 10,000, who commute into work daily.

Education

Gibraltar has a number of Government schools for all age groups with the education system being based on the UK model. It is of a high standard and the majority of our students attend university in the UK. There is also a local University, which opened in 2015, offering some degrees as well as a range of professional development courses. Private schooling is also available in Gibraltar. 

Gibraltar has a highly educated local workforce with a much higher than average percentage of students going to university. Our Government pays for our students’ tuition fees and provides grants which results in a very high number of graduates forming a part of Gibraltar’s workforce.

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Infrastructure

Gibraltar has an International airport with 4 to5 flights daily to/from the UK. Airlines include BA and Easyjet. Return flights can be extremely cheap depending on booking time. Alternatively, Malaga airport is only a 90 minute drive away which has a truly worldwide range of destinations.

Employees paying social insurance are entitled to free medical care.

Public transport is excellent, efficient and free for residents.

Office Space

Gibraltar offers a variety of office space in various locations and pricing can vary from £320 per sqm per annum to £450 per sqm per annum (World Trade Centre) for high quality space. Service charges are extra. A 100 square metre office could, therefore, cost between £32,000 and £45,000 per annum.

Internet is fibre in most, if not all offices, and all requirements can be catered for.

Accommodation

Residential accommodation is expensive with one bed apartments in the town centre costing around £1,000 per month. For more luxurious lettings, costs can be up to £4,000 a month for 4 bed centrally located apartment. There are, of course, cheaper alternatives available. Many employees choose to live across the border in Spain where much cheaper accommodation is available. Gibraltar, in fact, has a substantial number of cross border workers, with estimates at around 10,000, who commute into work daily.

Taxes in Gibraltar

Gibraltar has an attractive tax, regulatory and legal system within the European Union, combined with its position in Europe's leading financial center and Mediterranean lifestyle, which ultimately makes Gibraltar an ideal location for international business. 

There are many tax incentives for the businesses operating in Gibraltar, which range from Zero taxation for the non-resident companies, with sources of income from outside of Gibraltar, no VAT taxation, and limited taxation on special sectors like online gaming and casino sector. 

The import duty ranges from 0% up to 12%, and the social insurance payment is 10% for employees under 60 years old and 0% for the employees aged over 60. 

The corporate taxation is 10% for majority of locally based and locally operating businesses other than utility and energy sector companies which pay 20% corporate income tax. The most interesting part for many of the high net worth individuals is that there is no capital taxation, 0% Estate duty, and 0% tax on capital taxes like wealth, gift or other type of capital gains. 

Gibraltar also has an Alternative Residence Status – High Executive Possessing Specialist Skills. This allows specialist skilled workers who earn more than £120,000 per annum to have special fiscal status in Gibraltar. This allows them to limit their tax liability to the first £120,000 earned only.

There is also a residence status for high net worth individuals with assets of more than £2m (commonly known as Category 2 Residence). They are able to limit their personal tax liability on their worldwide income to between £22,000 and £30,000.

Doing Business in Gibraltar

Today, Gibraltar’s economy mainly relies on tourism, online gambling, financial services and cargo ship refueling services. Gibraltar has an attractive tax, regulatory and legal system within the European Union, combined with its position in Europe's leading financial center and Mediterranean lifestyle, which ultimately makes Gibraltar an ideal location for international business.

The Financial Services Commission Act of 1989 established the Financial Services Commission (FSC), which is part of the system for monitoring and controlling Gibraltar’s financial service providers. FSC is the central supervisory authority for all financial services (including banking and insurance) in Gibraltar. 

The FSC regulates licensable activity in Gibraltar. The new law overseeing DLT businesses [Financial Services (Distributed Ledger Technology Providers) Regulations 2017] (the “DLT Regulations”) came into force on 1st January 2018, which allows for a multitude of DLT businesses to be regulated if they conduct their operations in or from Gibraltar.

Why Investing in Gibraltar? 

Gibraltar offers a range of benefits for young entrepreneurs and experienced investors, who can set up companies from scratch, even as sole traders, or large branches of existing companies, thanks to its attractive tax regime.

The first advantage that foreign companies have in this country is that it has one of the lowest corporate taxes in Europe. 

Secondly, Gibraltar in recent years has emerged as an important financial center and is attracting a lot of wealthy people interested in the financial sector, making it more suitable and attractive for foreigners to establish their companies here and invest in this country.

Thirdly, the growth of this industry has, in its turn, generated the growth of other industries such as tourism, shipping. Also the real estate market has seen a great expansion. Considering that Gibraltar continued to grow while other European countries had more difficulties during the economic crisis, foreign entrepreneurs can be sure to benefit from a strong local market.

And fourthly, we cannot forget the strategic and geographical importance of Gibraltar, as it is one of the busiest maritime trade points in the world and the gateway to the Mediterranean, the strait is the junction between two continents, Europe and Africa, which gives the UK many facilities in its trade. 

So, if you are looking for a destination for new investments or to expand your business, you can consider Gibraltar for its numerous benefits.