Gibraltar aims for quality business as it transforms itself into a European financial services hub, it is claimed

News - Tax

Written by Ray Clancy

Wednesday, 29 September 2010 08:15

Gibraltar is successfully moving from being a tax haven to a European financial services hub aimed at attracting quality business with its new tax regime, according to the jurisdiction's Chief Minister.

Peter Caruana said that Gibraltar’s sound reputation was paying dividends as it transforms its economy. Changes mean that from January, offshore companies will pay the same 10% tax rate as Gibraltarian firms.

‘It’s a low rate and we hope companies will find it attractive. We do need to make our little corner of Europe look as normal as possible,’ said Caruana, who has been visiting the UK.

‘We are consolidating our economy, which has gone through a huge transition in the last 15 years from tax havenism to mainstream European financial services. We’ve adopted as the core of our economic development in financial services, online gaming and in shipping, high standards of regulation and supervision,’ he explained.

Caruana said it is crucial for small places such as Gibraltar to establish a reputation for soundness so that reputable companies want to be established. ‘That’s paid huge dividends for us, not just in financial services but in online gaming,’ he said.

Quality means that the jurisdiction actually turns away most of the people who come asking to set up in Gibraltar. ‘Because it’s such a small place, we don’t need a huge amount of quantity of economic activity, we can go for the quality. It’s a lucky position to be in,’ he added.

He also hit out at what he described as ‘a crazy’ border toll planned by the mayor of La Linea in Spain, just over the border from Gibraltar. He said it is currently having a detrimental effect on relations. ‘It’s doing a huge amount of damage to the cross border chemistry. This just goes against the grain and gets people’s backs up,’ he declared.

Although the toll is not a foregone conclusion, discussion about it and the mayor’s refusal to say one way or the other, is leading to a lot of unhelpful speculation. ‘Whilst he does not abandon it, the speculation continues and bad will continues to develop,’ added Caruana.

Spain ceded Gibraltar to Britain in 1713 but has long argued that it should be returned to Spanish sovereignty. London says it will not do so against the wishes of Gibraltarians, who are fiercely pro-British.