Hong Kong Company Formation And Bank Account
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 TreatmentHowever, 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.Non-Residency RequirementsBy default a Gibraltar company is not non-resident so to ensure it is you need to file according with the local financial authority and meet the appropriate criteria. These include:
No funds remitted to Gibraltar
No business in Gibraltar or from Gibraltar sources (not a big deal since it's a tiny market of around 80 000 people)
Management and control (generally speaking directorship of the company) outside of Gibraltar This does raise some questions such as:
If no funds can be remitted to Gibraltar (there's a sort of remittance basis in their tax system) where should the company bank?
If management and control isn't in Gibraltar where should it be? Banking & ReputationCorporate banking in Gibraltar is virtually non-existent anyway, while Gibraltar is fairly well known for some of their banking it is private banking not corporate banking and certainly not for small businesses. The good news is this means other jurisdictions, particularly other European jurisdictions are fairly familiar with Gibraltar companies banking abroad and relative to a lot of other offshore jurisdictions gaining banking for a Gibraltar company can be relatively easy.Unfortunately, even though this is the case the available jurisdictions that accept non-resident companies with strong banking are few and diminishing so it's becoming more and more attractive to be able to bank locally in spite of an asset protection argument against doing so but that's for another post. For example, I'd never recommend a Canadian company or individual form a Gibraltar company unless management and control were exercised somewhere else since Gibraltar doesn't qualify for Canada's favorable tax regimes and it also taxes based on management and control, meaning the non-resident Gibraltar company would end up fully taxable in Canada.
In other words whether to incorporate in Gibraltar becomes based on a variety of other facts and circumstances aside from the merits of the jurisdiction itself.Bottom line if you're going to form a company in Gibraltar and not have it be resident there be sure the foreign management and control won't make the company taxable somewhere else, perhaps somewhere more onerous.Asset Protection & ConfidentialityConfidentiality rules in Gibraltar are mediocre at best. While there are definite limitations on information sharing, which might come about as a result of tax information exchange agreements, FATCA, EU Savings Directive, and multi-lateral exchange agreements, Gibraltar does definitely participate in exchange sharing initiatives and is rated as largely compliant by the OECD.
