Gibraltar: Europe's Next Playground for the Wealthy

With its stunning scenery, strategic location, low taxes, and strong banking sector--Gibraltar is briskly attracting more tourist and investment money. For centuries, the British overseas territory at the tip of southern Spain has been known for its iconic rock at the crossroads of the Atlantic and Mediterranean, and Africa and Europe. In recent years, it's become overlooked and undervalued affording investors big opportunities.


Tourism


One reason why Gibraltar is a great investment destination is because it has yet to become popular with American visitors. In less than 5 years, tourism has surged from 5 million to over 8 million visitors, yet Americans made up less than 5% of that total.


Surveys show that the 1,400-foot high rock, one of the legendary "Pillars of Hercules" is the main tourist attraction; however, with tax-free shopping, a Mediterranean climate, Barbary apes, 6th century Moorish ruins, and easy international access, Gibraltar is easy to love. As cruising proves to be a cheaper and a more popular way for Americans to see Europe, Gibraltar will continue to serve as a port of call for most western Mediterranean cruises.

Besides commercial cruisers, the increase in luxury yachters will bring many wealthy visitors en route between the US and the Mediterranean.


Real Estate

At under 4 square miles, slightly larger than Central Park, Gibraltar has limited space for development. Consequently, developers have scooped up most of the available land. In the last 5 years, the peninsula has been awash in development of scenic, luxury communities such as Ocean Village. This year, Gibraltar witnessed its biggest decline in property values since 1992 (merely 4.4%), presenting new property investment opportunities.

According to Louis Montegriffo, the director of major development consultancy firm BMI Group, Gibraltar could see a 35-40% rise in property values in 5 years. Unlike other European destinations for the wealthy like Monte Carlo, St. Tropez, and Cannes, home prices in Gibraltar are half as expensive.


Offshore Banking


Gibraltar may have kept a relatively low profile as an offshore banking destination, but its banks have amassed increasing assets of more than $ 12 B:

- Close Brothers Sets up Bank in Gibraltar Tax Haven.


- Wealth Management Firms Have Big Plans for Gibraltar.

Although the EU's 2005 Savings Tax Directive makes it more difficult for Europeans to take advantage of offshore banking, Gibraltar is serious about combatting money laundering, keeping taxes low, and promoting confidentiality.

The IMF lauded Gibraltar's anti-money laundering tactics and overall regulatory system in a 2007 report.

In order to maintain privacy while continuing anti-money laundering measures, Gibraltar has given EU residents the option of a witholding tax on bank interest payments.

Establishing your offshore account in Gibraltar means no taxes on capital gains. Lloyd's TSB Offshore Bank provides a great service to offshore account seekers:


- Lloyd's has a AAA credit rating (Moody's), the highest for any bank in the world

- Lloyd's emerged from the global financial crisis better than most large banks.

- Low annual fees (under $ 10) and low minimums to open accounts.


Company Formation


Setting up a tax-exempt* corporation provides a seamless experience:

- The filing and incorporation process takes just 2-3 days

- Requires just 1 minimum shareholder and director

- Legal entities can be corporate directors

- Minimum capital requirements (optional authorized capital, 100 GBP paid up share capital, 1 GBP paid up capital)

- Other requirements include a registered agent, registered office, and annual tax returns.





*Chief Minister Caruana's 2002 decree which allows tax exempt corporations with up to 15% company personnel taxes. Click here for information on company formation, trusts, limited partnerships, trademarks and patents, and yacht registry. Photos courtesy of Gibraltar Tourist Office.