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Gibraltar Companies •
Tax-Exempt Companies
Non-Resident Controlled Companies •
Trusts
TAX-EXEMPT COMPANIES
Introduction
Ever since the enabling laws were passed in 1983, the Tax-Exempt Company has been Gibraltar’s main offshore product. Our firm has the advantage and the experience of working in this field from the very beginning.
Tax -Exempt Companies are managed and controlled from Gibraltar and allow the owners to legally avoid tax whilst keeping their identity confidential.
Tax-Exempt Status
As long as no Gibraltarian or Gibraltar residents have a beneficial interest in the Company and it does not carry on business with such persons, a Gibraltar Company will generally be granted a Tax-Exempt Certificate which is valid for 25 years. A fixed annual fee of between £200 and £300 is payable to the Government.
In return a Gibraltar Tax-Exempt Company will be free from paying any tax in Gibraltar whatsoever irrespective of the size of its profits.
There are circumstances where Gibraltar Companies, which fulfil the above conditions for tax exemption, do not need to pay the annual fee of between £200 and £300 to obtain the benefits conferred by a Tax-Exempt Certificate. For example, where such companies are used for the sole purpose of holding bank accounts in the “on-shore” departments of local banks and financial institutions.
No Taxes Payable in Gibraltar
Gibraltar Tax-Exempt Companies do not pay any of the following taxes:
Income Tax, Corporate Taxation on profits, VAT, Capital Gains Tax, Gift Tax, Wealth Tax, Inheritance Tax, Withholding Tax, Tax on dividends or any other Gibraltar taxes (except the annual tax of between £200 to £300).
Main Uses & Advantages of Gibraltar Tax-Exempt Companies
- Holding funds, stocks and shares and other investments in company accounts (Tax-Free Investment Companies) in Gibraltar since the capital invested and the interest earned will not be subject to tax.
- Owning a yacht or ship in the name of a company (Yacht & Ship Owning Companies) so that any profits earned from trading or chartering are not subject to tax (there may also be relief from VAT - see section on (Yacht & Ship Registration).
- Buying property outside Gibraltar in the name of a company (Property Owning Companies), developing it and reselling by selling the shares of the company, rather than the property itself, thus avoiding capital gains tax and other charges in the jurisdiction where the property is situated.
- Operating a business with a Gibraltar Company to avoid tax (Tax-Exempt Business Companies) by invoicing so that payments received in Gibraltar are tax-free and re-invoicing to minimise tax liabilities in other jurisdictions.
- For the holding of family assets using trust structures (Family Asset Companies).
Tax-Free Investment Companies
A Gibraltar Tax-Exempt Company is an ideal vehicle for holding a bank account, dealing in stocks and shares, holding portfolios of investments and for purchasing other financial products. These purposes are the most popular reasons for using Gibraltar’s offshore facilities.
High interest accounts and portfolio management services are available at the various major international Banks and Financial Institutions with a presence in Gibraltar. There are relatively simple procedures in place which facilitate the swift opening of bank and investment accounts.
The greatest attraction of such accounts is that all interest earned as well as any capital gains or other profits made whatsoever are paid entirely free of tax.
Yacht & Ship Owning Companies
Gibraltar Tax-Exempt Company are also widely used for registering a ship or a yacht. Apart from the obvious advantage of confidentiality as to ownership there are many other benefits.
Vessels owned by Gibraltar Companies can be registered at the local British Registry under the British flag. In some cases there may also be relief from VAT (Yacht & Ship Registration).
Any profits obtained from chartering a vessel or from any trade or business carried out will be completely free from tax, including VAT, in Gibraltar and such funds can be paid into a Gibraltar bank account held by the Company. Charters may also be free from VAT (Yacht & Ship Registration).
Gibraltar Tax-Exempt Companies can be used to register fleets of ships so that each ship is owned by a different company. In this way the other ships in the fleet will be protected against any debts owed by any of its sister ships.
Property Owning Companies
Buying property outside Gibraltar in the name of Tax-Exempt Company offers many advantages. The first and most obvious one is confidentiality as to ownership. However, it also allows for property to be sold without incurring any local taxes.
When the property is sold it is effected by the purchaser buying the property owning company. This is done by simply transferring the beneficial interest in the shares to the new owner and it is not necessary to register the transaction anywhere or to inform the authorities. The new owner acquires the company and the property remains registered in the Company name and no Transfer, Capital Gains or any other tax is incurred.
Another major advantage is that this transaction can normally be effected very speedily and the usual delays in property transactions are avoided.
Our firm is a major provider of such companies for development in “La Costa del Sol” in Marbella, Spain and has an enormous amount of experience in this field.
Tax-Exempt Business Companies
Gibraltar Companies can carry on business anywhere in the world and they will pay no tax whatsoever in Gibraltar on their profits. Gibraltar Companies are, therefore, an ideal vehicle for all types of businesses including those engaged in: manufacturing, import and export, agency and commission work and the provision of services.
A major advantage is that invoices for goods or services provided by the Company can be made in Gibraltar, on which no tax is payable.
All invoices are also paid free of VAT which can give businesses an edge over their competitors.
Re-invoicing is also a popular way of avoiding tax particularly where a company carries out trade between two high tax jurisdictions. This typically involves the purchase of goods through a Gibraltar company and resale to another company in the jurisdiction the goods are eventually sold. The main profit can be made by the Gibraltar company, on which no tax is payable in Gibraltar, thus minimising the ultimate profit of the eventual selling company and, therefore, its tax liability in that jurisdiction.
Family Asset Companies
Family savings and assets can be held by a Gibraltar Tax-Exempt Company. There are several advantages to this which include confidentiality as to ownership and the ability to make investments without incurring any tax on the interest earned or other profits made.
The company structures used by our firm will enable money and assets to be divided between family members by dividing the beneficial interest in the shares of the company as directed. The system we use allows total flexibility and the percentage shares in the company of members can be changed with the minimum of fuss.
Family assets and wealth can also be protected by using Trust Structures and Discretionary Settlements (Trusts).
Gibraltar Companies •
Tax-Exempt Companies
Non-Resident Controlled Companies •
Trusts
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