Gibraltar as a corporate center: is it worth it?

Mundo wants to introduce you to Gibraltar, a leading jurisdiction when it comes to companies. There are many advantages offered by Gibraltar as a corporate center, however, the price to pay in red tape and bureaucracy can be high. 

Today Mundo analyzes offshore registration in Gibraltar and offers other alternatives for the nomad capitalist and global businessperson. 

Why open a company in Gibraltar and what can you do with it 

Thanks to its reliable legal framework and stable environment, Gibraltar becomes a great place for offshore registration allowing you to conduct various activities. This includes copyright protection, trading of securities, real estate, and asset ownership.

You can conduct many transactions from buying and selling property, trading shares and stocks, trading with Internet companies, obtaining funds, providing consulting services, planning successions, etcetera.

In theory, it's possible to establish a cryptocurrency business, however, the licensing process is extremely difficult. For example, only 12 companies have managed to get such a license. If you like Gibraltar, you can choose to conduct other activities but if you want a simple crypto license we recommend Lithuania. Although Gibraltar was the first country to regulate Distributed Ledger Technology operations, other jurisdictions are now offering more flexibility in this regard.

What tax will I pay in Gibraltar as a corporate center

If you are considering Gibraltar company registration, you must factor the taxes into your business plan. The country has tax identification numbers (also known as TINs) which will help you open a bank account easily. 

For tax purposes, there are two types of companies:

“Non-resident controlled” Gibraltar company registration:

This means that your company is not a resident hence it's tax-free in the territory of Gibraltar. To grant a company such a tax status, shareholders and directors must be non-residents. They can also be licensed directors or nominee shareholders in the country. There's a strict condition which stipulates that the company must conduct business only outside the country. If you maintain these conditions your company won't be taxed. 

Also, this country comes with some extra perks:

• No taxes on dividends paid by one Gibraltar company to another Gibraltar company.
• No taxes on dividends or interests paid to a non-resident.
• No requirements to withhold dividends.
• No inheritance or capital gains tax.

Local company or company that operates locally:

If your entity works with Gibraltar customers or operates in the country, it must obtain a license. In this case, it's subject to a 10% income tax.

Substance requirements in Gibraltar

Substance requirements in Gibraltar are complex, like in any other jurisdiction. The key is to prove that the company was not established only for tax purposes. When it comes to reporting, the fiscal year starts on April 1 and finishes on March 31st. You must present your balance to the Gibraltar company registration entity, and it must be signed by the directors. However, there's no requirement to audit these sheets. It's also mandatory to submit a tax return. This applies also to non-resident companies even if they don't pay taxes. 

As for the Economic Substance, there is an option for companies that are going to work in the Gibraltar market, i.e., that offer services or sell to Gibraltarian residents. In this case, you’ll need an office (at least a desk), registration in ETB (employment), an employee who lives in Gibraltar or nearby, and an activity license. The company will pay 12.5% in income tax. 

In general, Mundo experts recommend this option only for local businesses.

Ask our experts

The challenges of Gibraltar company registration and other alternatives

Although due diligence is vital to maintain a good reputation, complicated processes can be a hindrance. Mundo is willing to take on any challenge and we help you register your company in Gibraltar, but we also let you know that there are other options available.

The registry will ask you for passport copies, utility bills, proof of source of funds, business plans, CVs, and forms. Also, each beneficiary must complete an SOW (source of wealth), which is a thorough analysis considering the person’s background, family assets, business activities, income, and investments.

If you want a simpler jurisdiction here are some options:

Lithuania

This is one of the best jurisdictions to conduct crypto businesses. Lithuania offers two types of licenses. The first one allows you to trade cryptocurrencies in various ways and combinations (crypto to crypto, Fiat to crypto, and vice versa). The second option allows you to offer wallet services so clients can hold their assets. All this is carefully laid out under a solid legal framework and an innovative financial environment.

Estonia 

Estonia is a great alternative to offshore registration in Gibraltar. If you’re looking for tax benefits, Estonia is your jurisdiction. Besides having plenty of double taxation treaties, in Estonia, you are free of taxes as long as you reinvest the earnings in the company. Managing a company here it's easy thanks to the country’s flexible conditions. An e-resident status allows you to manage your company remotely hassle-free. Finally, Estonia has the perfect balance between offshore advantages and onshore reputability. You won't have any issues when it comes to transactions with international banks.

Singapore

In Singapore, you'll find plenty of policies that support business development. New companies, for example, can access a tax-free benefit for three years under certain conditions. Also, it has reduced rates on income tax and withholding tax on income derived abroad. Finally, corporate income tax is only 17% and the country has a high level of secrecy while complying with international regulations. Check out our dedicated article for more information on Singapore. 

Cayman Islands

You only need $50,000 as standard capital to register in the Cayman Islands. Although Gibraltar company registration is a great option, the Cayman Islands are also worth the look. We are talking about a small country with a high literacy rate, a great advantage if you want to establish a local office. Over 11,000 funds are registered in this jurisdiction which offers a business-friendly environment for company incorporation.

Disclaimer: The information in this article is instructive. Requirements, tax rates, fees, and documents may change at the regulator’s discretion. 

Why choose Mundo for offshore registration in Gibraltar

Offshore registration can be a great way to grow your business. There are plenty of jurisdictions that have the same advantages as tax havens, but thanks to the economic substance requirements they are fully compliant. 

Substance requirements in Gibraltar, as well as in other countries, help to make sure that offshore companies are put to good use instead of being used as tax evasion instruments. However, strict due diligence can make the incorporation process more tangled than usual. This is why Mundo offers other options. Whether you choose Gibraltar company registration or any other jurisdiction, Mundo is here to help.

We have a dedicated team at different offices across the world providing comprehensive financial services of which incorporation is one of the keys. Contact your Mundo representative for more information on Gibraltar.

Contact us