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Introduction

Our associated fiduciary services firm, Ellul & Co. Corporate Services, mainly incorporates and manages Gibraltar companies for our clients but we can also offer a companies from other jurisdictions in order to suit our clients’ needs. 

All jurisdictions have different factors which may make them more or less attractive for a particular type of activity.  We work with reputable professionals in many parts of the world and are able to provide advice to help our clients make an informed choice.

We are also able to provide our clients with Trusts.

Gibraltar Companies

Gibraltar companies are incorporated under our Companies Act which is based on English law but has been tailored to suit Gibraltar’s needs. The English common law and principles of equity apply in Gibraltar and these have a bearing on many aspects of Gibraltar company law.

Taxation of Gibraltar companies

With the exception of royalty income and loan interest above £100,000 per annum, only income which accrues in or is derived from Gibraltar is subject to tax in Gibraltar.  In essence, as long as the preponderance of income-generating activity of a Gibraltar company takes place outside Gibraltar, it will not pay corporation tax in Gibraltar.  In addition, none of the following taxes are payable in Gibraltar:

  • VAT;
  • capital gains tax;
  • tax on dividends paid to companies and to non-residents;
  • tax on interest or gains made from bank investments;
  • tax on interest or gains made from investments with any financial institutions;
  • taxes on liquidation distributions;
  • inheritance tax;
  • wealth tax;
  • gift tax; and
  • withholding tax.

Advantages of establishing Gibraltar companies through our firm

  • We advise on appropriate structures and work with international professionals to provide our clients with the best solutions.
  • We can provide nominee shareholders and, in appropriate circumstances, directors for companies under our management.
  • We can open bank accounts for your companies, in Gibraltar and elsewhere, and will advise on the banks best suited to your requirements.
  • Your companies will be managed by a fiduciary services company associated with our law firm which was established in 1973.
  • Our associated company management firm is licensed by the Gibraltar Financial Services Commission (www.fsc.gi) under licence number FSC00580B.

Some uses & advantages of Gibraltar companies

  • Having a real presence in Gibraltar with local directors, substance, management and control to benefit from Gibraltar’s attractive low corporate tax and no VAT.
  • Holding bank accounts, funds, stocks and shares and other investments in company accounts since the capital invested and the interest earned will not be subject to tax.
  • Operating businesses.
  • Owning a yacht or ship in the name of a company so that any profits earned from trading or chartering are not subject to tax in Gibraltar.
  • Owning real estate.
  • For the holding of family assets either as a stand-alone company or in conjunction with Trusts. Advantages include confidentiality, making investments without incurring tax and the ability to give us instructions as to the family members who should inherit company assets.
  • Corporate restructuring allowing the tax-efficient distribution of assets.

Procedure to incorporate a Gibraltar company & some of its main features

Approval of company name 

First of all a name has to be chosen which is different to any other existing Gibraltar company Availability can be quickly checked by us.

Company formation application

Upon request, we can provide you with a company formation application form.  This is an important part of the process which provides our associated fiduciary services firm with the “know your customer information” and documentation we need from the owner in order to comply with our local laws, regulations and internal procedures.

Shareholders

A Gibraltar private company can have from one to fifty shareholders with no limits on public limited companies.  Shareholders can be natural or legal persons and there are no restrictions as to their nationalities or their places of residence. 

Nominee Shareholders

Shares may be held in the name of the fiduciary services company associated with our law firm.  In such cases, the ultimate owner is issued with a declaration of trust which provides that the benefit of the shares belongs to him/her and this document is indisputable proof of this.  Shares may also be held directly in the name of the owner or of a legal entity.

Directors

Under Gibraltar law, only one director is necessary and there are no restrictions as to residence or nationality.  Directors can be natural or legal persons.  Our associated fiduciary services firm can provide directors in specific circumstances and more information can be provided upon request.  

Bank accounts

Our associated fiduciary services firm has long-standing relationships with banks in Gibraltar and many elsewhere and will advise you on which bank is best-suited to your requirements.  They will handle all aspects of the bank account opening process and open the account for you.

Balance sheets, financial statements, accounting records, audit & tax returns

It is the responsibility of the directors of a company to compile accounts.  Unless the company is subject to tax in Gibraltar, there is no requirement to file full financial statements.  However, there is an absolute obligation to compile and, annually, file abridged balance sheets at the Gibraltar company registry annually.   We assist our clients with this process.

Although company balance sheets are filed at the public company registry, they do not contain: the name or address of the company’s owner(s); any details which can identify its bank accounts or investments; the nature of any assets held by the company; profit and loss accounts.  In essence, all that is disclosed in balance sheets are the monetary values of the assets held by the company (without identifying them) and, generally, figures for the total receipts and expenses of the company in its financial year. 

Most companies our associated fiduciary services firm manages, do not require an audit.  Other than for companies which are subject to tax in Gibraltar, for which there are different rules, “small” companies do not need to produce audited accounts.  As long as the Company does not surpass the below limits in two consecutive financial years, it will be a “small” company for the purposes of Gibraltar law:

  • Net turnover of less than £10.2m;
  • Total assets of less than £5.1m;
  • Average employees of less than 50.

A company (via its directors) has a duty to keep proper books of account for a period of five years in respect of:

  • all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place;
  • all sales and purchases of goods by the company;
  • the assets and liabilities of the company.

All Gibraltar companies need to submit tax returns to our income tax office.  In most cases, companies with business assets outside will be able to submit “nil” tax returns simply stating that the company has no assessable income in Gibraltar.