Electronic Signature and Re-domiciliation
Electronic Signature: Permitted.
Re-domiciliation: Inward and outward re-domiciliation is generally allowed to/from recognized countries, including EEA countries, British Commonwealth members, and most other finance centers.
Compliance and Reporting
Accounting Records: Companies must maintain accurate accounting records reflecting their financial position and each underlying transaction.
Annual Return: Required to file an annual return with financial statements and a tax return.
Audit Requirement: Audited accounts are required unless the company qualifies as a small company (meeting two of the following: turnover ≤ £10.2 million, assets ≤ £5.1 million, employees ≤ 50).
Taxation
Tax Residency: A company is tax resident in Gibraltar if managed and controlled from Gibraltar or by persons ordinarily resident in Gibraltar.
Basis: Corporate income tax is levied on income accrued in or derived from Gibraltar.
Corporate Tax Rate: 12.5% on Gibraltar-source income. Utility companies and those abusing a dominant position are taxed at 20%.
Capital Gains: Exempt from taxes.
Dividends: Not subject to tax in Gibraltar.
Interest and Royalties: Gibraltar-source interest is taxable; foreign-source interest and royalties are generally not taxed unless specific conditions apply.
Withholding Taxes: None.
Foreign-Source Income: Typically not taxed in Gibraltar.
Losses: Can be carried forward indefinitely.
Anti-Avoidance Rules
Transfer Pricing: No specific legislation, but general anti-avoidance provisions apply.
CFC Rules: Gibraltar taxes non-distributed income of a controlled foreign company if derived from non-genuine arrangements aimed at tax advantages.
Interest Deductibility: Limits apply to interest expenses.
Labor Taxes and Personal Income Tax
Labor Taxes: Employer contributions to social insurance are 20% of gross earnings, with specific minimum and maximum amounts. Employees contribute 10% of gross earnings within defined limits.
Personal Income Tax: Residents are taxed on income accrued in or derived from Gibraltar and non-trading worldwide income. Different tax rate bands apply depending on the gross income-based or allowance-based system chosen.
Other Taxes
Stamp Duty: Up to 3% on the transfer of Gibraltar real estate or shares of real estate-owning companies.
Gaming Tax: 1% on gaming companies (minimum GBP 85,000, maximum GBP 425,000).
Capital Duty: GBP 10 on the initial authorization of share capital or increases.
VAT: Not applicable in Gibraltar.
Pros and Cons of a Gibraltar Private Company Limited by Shares
Pros
Favorable Tax Regime: Low corporate tax rate of 12.5%.
Limited Liability: Shareholders' liability is limited to their share capital.
Reputable Jurisdiction: Recognized international financial center.
No Withholding Taxes: Dividends, interest, and royalties are generally exempt.
Flexibility: No minimum capital requirement and straightforward compliance.
Cons
Public Disclosure: Shareholder and director details are publicly accessible.
General Meeting Requirement: Annual general meetings are mandatory unless waived.
Compliance Burden: Annual returns, financial statements, and potential audit requirements.
Conclusion
Incorporating a private company limited by shares in Gibraltar offers significant advantages, including a favorable tax environment, limited liability, and ease of compliance. It is an attractive option for businesses seeking a reputable jurisdiction with efficient regulatory processes.
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