About Gibraltar

General

Gibraltar is a peninsula with an area of 2.25 square miles linked to the southern tip of Spain, facing the northern coast of Africa and dominating the western entrance to the Mediterranean. Together with Jebel Musa (Mons Abila in Latin) in Morocco, Gibraltar (Mons Calpe) formed the Pillars of Hercules. One of the world's most famous landmarks, the Rock of Gibraltar rises to approximately 1,400 feet and has been a key strategic site for many centuries.

History

Gibraltar's strategic importance has given it a long and turbulent history and an influence on world events out of all proportion to its size and population.

Its name is a legacy of the 8th century Arab invasion of mainland Spain, when the Moorish leader Tarik based his troop-ships there. The name is derived from Gibel (or Jebel) Tarik - the mountain of Tarik. Although it was captured and held briefly by the Kingdom of Castile between 1309 and 1333, the Rock remained as a symbol of Moslem domination of the Western Mediterranean until finally regained by Spain in 1462. Britain captured the Rock in 1704 during the War of the Spanish Succession. Its cession to Great Britain in perpetuity was confirmed by the terms of the Treaty of Utrecht in 1713, when it became a British possession.

Wide publicity has been given over many years to Spain's claim to the Rock, the British possession of which it regards as prejudicing its territorial integrity. Despite its obligations under the Treaty of Utrecht, Spain has besieged the Rock on a number of occasions, the most notable being the Great Siege of 1779 to 1783. More recently, pressure has taken the form of a closure of the land frontier between 1969 and 1982. In response to this threat, the constitution granted in 1969 enshrines a commitment by the British Government, which has been frequently reaffirmed, never to cede the territory to Spain against the wishes of the population.

Climate

The climate is Mediterranean and mild with an average noon summer temperature of 23°C (which can rise to as much as 32°C) and a winter average of 13°C.

Rainfall is mostly concentrated in the rainy season from December to March when it frequently comes in the form of very heavy downpours. During the period from April to September it is normal to have uninterrupted sunny days. Due to its mild climate and position at the meeting point of two continents and to its geology - the Rock is a limestone outcrop - Gibraltar enjoys a remarkable variety of flora and fauna and is the home to various species not found elsewhere in Europe.

Population

Throughout its history Gibraltar has harboured successive waves of immigrants from widely differing cultural backgrounds. The establishment of British rule brought about the departure of the Spanish inhabitants and their place was taken by a miscellaneous collection of immigrants - including Genoese, Moroccan Jews and Portuguese - who combined with British settlers to form a heterogeneous but nonetheless harmonious community. The Rock now has about 30,000 inhabitants, of which 26,000 are native Gibraltarians, the balance being made up mainly of British expatriates. English is the official language but most Gibraltarians speak and write both English and Spanish.

Government and Internal Affairs - Gibraltar Goverment

Constitutionally, Gibraltar is an overseas territory of the United Kingdom with internal self government except in matters of defence, internal security and foreign affairs which are the responsibility of the United Kingdom. It has its own Parliament which consists of eight government ministers and seven opposite members.

European Union

Gibraltar is part of the EU, having joined as an associate member with the United Kingdom in 1973 under the provisions of the Treaty of Rome relating to European dependent territories. It is however excluded from the Common External Tariff, the Common Agricultural Policy and the requirement to levy Value Added Tax. Gibraltar continues to implement EU Directives, including those in the area of Banking, Insurance and Fund Management.

Legal System - Gibraltar Law

The legal system is based on English Common and Statute Law with variations introduced by local Statute Law or Acts. The administration of justice is undertaken by the Chief Justice. There are three courts: a Magistrates' Court, a Supreme Court and a Court of Appeal for Gibraltar. The ultimate Court of Appeal is the Privy Council in the United Kingdom.

The Economy

Until the middle of the 1980s the economy was very heavily dependent on UK Ministry of Defence (MoD) spending. MoD cutbacks over subsequent years hit Gibraltar particularly hard, with drastic reductions in the garrison causing the percentage of MoD spending on the Rock to fall from over 60% of GDP to a mere 9% in 10 years. With help from the EU funding, the economy has reacted resiliently with the development of the finance centre and a tourist trade exploiting Gibraltar's remarkable and unique historical and biological heritage.

Gibraltar offers excellent professional expertise within the financial services industry, which constitutes a major element of the local economy. A range of international banks provide domestic, offshore and private banking facilities, with bank interest accruing to non-residents exempt from Gibraltar taxes.

In addition to tourism and the financial services industry, the Rock is a popular port of call for cruise liners and has an active port for ship repairing, bunkering and crew changes. Gibraltar enjoys virtually full employment and also provides jobs for blue and white-collar workers commuting from Spain.

Financial Regulation

Gibraltar Financial Services Commission
Gibraltar Regulatory Authority

The Financial Services Commission was established in 1989 in order to provide strong investor protection in relation to Banking, Insurance, Fund Management and the Financial Services Sector in general. The Financial Services Commissioner is appointed by the Governor acting with the approval of the Foreign and Commonwealth Secretary. The Commission is composed of four United Kingdom and three local members, all of whom must be acting solicitors, actuaries or accountants, or have experience of Financial Services Regulations.

Currency and Exchange Controls

The unit of currency is the Pound Sterling and there is a local note and coinage issue which is at par with Sterling. In practice, the Euro is widely accepted by traders. There are no exchange control restrictions, there being complete freedom to remit funds into and out of the territory and to convert funds into other currencies.

Transport and Communications

Gibraltar's strategic location places it at the centre of a network of communications. It has both an international airport and a harbour which continues to attract many cruise liners as a result of both its location and its free port status. In Spain, the airports at Seville, Jerez and Malaga are all within two hours' drive of the Rock and allow access to a wide variety of domestic and international destinations.

As would be expected of a finance centre, there is a highly sophisticated telecommunications system which is fully digital, resulting in first class international communications.

Finance Centre Facilities

Gibraltar is now a major finance centre, which has developed against a background of political stability and administrative and legal systems derived from English models. The absence of any exchange control restrictions, together with tax exemptions and concessions for certain categories of companies, non-resident individuals who do not work in Gibraltar, and trusts administered for non-residents, has created many opportunities for offshore investors and led to substantial growth in financial sector services. This has been augmented by the investor protection legislation which is enforced by the Financial Services Commission, and Gibraltar is without doubt one of the most tightly regulated finance centres anywhere, providing users of its services with credible assurances of probity and professional excellence.

Summary

Gibraltar has significant attractions to offer as a base for establishing a company. Apart from the fact that it offers a tax free/low tax environment in which investment income can accumulate, it has the added advantage of being within the EU. As a result, Insurance, Banking and Investment services can be passported directly into the other Member States.

PwC can provide a wide range of services to the Gibraltar company. These range from incorporation and registration to the provision of administrative services as well as audit services and tax advice.