Guide to Setting Up a Business in Gibraltar in 2024
Gibraltar offers an attractive environment for setting up a business due to its favourable tax regime, strategic location, and robust legal framework. Entrepreneurs and companies looking to establish a presence in Gibraltar must follow a structured legal process.
Choosing a Business Structure
The first step in setting up a business in Gibraltar is selecting the appropriate structure. The most common options are:
- Sole Trader: Suitable for individuals who want to run a business on their own. This structure has minimal setup costs and offers simplicity in terms of administration. However, the sole trader is personally liable for any business debts.
- Partnership: This structure is ideal for two or more individuals who want to share ownership of a business. There are limited liability partnerships and general partnerships, each with different levels of personal liability.
- Limited Liability Company: A separate legal entity from its owners, a limited liability company offers protection from personal liability. This is the most common structure for businesses in Gibraltar.
Business Registration Process
Once the structure is chosen, the business must be registered with the Gibraltar Companies House. The key steps include:
- Name Approval: The chosen business name must be approved to ensure it is not already in use by another entity.
- Memorandum and Articles of Association: These documents must be submitted to the Companies House and include the business’s objectives and governance structure.
- Registration with the Tax Office: All businesses must register with the Gibraltar Income Tax Office to obtain a tax identification number.
- Banking Requirements: A business bank account is necessary for all transactions. Most banks in Gibraltar will require the company registration documents, proof of identity for directors, and financial projections.
Licensing and Permits
Some businesses may require specific licences or permits, depending on the industry in which they operate. For example, financial services companies must be regulated by the Gibraltar Financial Services Commission. Similarly, businesses dealing with food or retail may require additional local permits.
Taxation in Gibraltar
Businesses in Gibraltar benefit from a low corporate tax rate of 15%, which applies to profits generated within Gibraltar. There is no Value Added Tax (VAT), capital gains tax, or inheritance tax, making Gibraltar an appealing destination for business owners. However, all businesses must ensure that they comply with their tax obligations, including filing annual returns and paying taxes on time.
Employment Law Considerations
Employers in Gibraltar must comply with local employment laws, which include provisions for employment contracts, working hours, holiday entitlements, and parental leave. It is important to engage a solicitor to ensure that employment contracts are legally compliant and reflect the company’s policies.
Ongoing Compliance and Reporting
Once established, businesses in Gibraltar must comply with ongoing reporting requirements. This includes filing annual returns with the Companies House, submitting tax filings, and ensuring compliance with local regulations, such as anti-money laundering (AML) requirements.
