Offshore Company Formation in Gibraltar
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. The common places to look would be Malta, Andorra, eastern European jurisdictions or Caribbean jurisdictions. There are a few gems in there but a lot that aren't particularly attractive.Gibraltar actually has a pretty strong reputation as it is what might be called a mid-shore jurisdiction competing within the global incorporation landscape on reputation as much as on tax and other features. This is very helpful in some parts of the world but in Asia it is a very unknown as a result hands on experience has shown in spite of a much better reputation it can be more difficult to open a bank account for a Gibraltar company in say Singapore than for say a Marshall Islands company as illogical as that might seem. Opening accounts in jurisdictions such as Singapore and Hong Kong is certainly possible but typically more of a hassle than doing so with some of the more well-known tax havens or by contrast more of a hassle than opening an account in a European jurisdiction where Gibraltar companies are more common.Incorporating in GibraltarWhen actually forming a company in Gibraltar be prepared for a fairly rigorous process, this is not like opening a company in say Delaware or Anguilla where essentially just providing the name of the company and owners is good enough. In order to safeguard their reputation that Gibraltar agents will require details about the nature of the business comparable to what's required to open a bank account and may decline applications based on certain types of business, which might negatively impact the reputation of the jurisdiction.
