When you start looking for European company formation options that will provide tax or operational benefits you narrow the list pretty quickly generally to:
- Ireland (though not often)
- Isle of Man
There are lots more but I can’t think of any reason you’d want to use any of the others when you’ve got those to choose from and frankly there are definite preferences among those depending on what you’re doing. We’ll cover each in detail in coming posts but for today we’re going to focus on Gibraltar. As it stands today as of this writing we LOVE Gibraltar. But when I first started studying offshore jurisdictions I didn’t quite understand why I would love it in spite of it being mentioned to me by several people.
On the surface Gibraltar isn’t that spectacular:
- While supposedly inexpensive by European standards Gibraltar company formation or incorporation typically costs around 850 GBP in the retail market not counting 公司秘書服務 other required documents
- There’s a 10% tax rate and no tax treaties
- Company formation takes a minimum 2 weeks often dragging on much longer
- Director/ownership details are public
- There’s no domestic corporate banking to speak of
- Over a certain level audited financials are required
Reading the list it doesn’t sound that compelling to me and unless there are special circumstances I’d say if you’re going to form a resident Gibraltar company you’re probably better off looking elsewhere (alternatives discussed in other posts). It used to be that Gibraltar being an EU member but not a member of the VAT regime was helpful but updates to the VAT regime have mostly eliminated these benefits.
Favorable Tax Treatment
However, Gibraltar is one of only 3, really only 2, jurisdictions within the EEA (European Economic Area) with a particular nuance in their corporate residency laws. Tax residency in Gibraltar is based ONLY on management and control, which means you can have a non-resident Gibraltar company. What does that mean?
A non-resident company isn’t liable for any local income taxes except on domestic source income (no income in Gibraltar = 0% corporate tax rate). So we’ve just gone from Gibraltar being a 10% tax jurisdiction, which is OK, but not exceptional, to a fantastic 0% tax regime.
Non-resident Gibraltar companies also benefit from not having the same requirements when it comes to the likes of audited financial statements that resident companies have.