Is Gibraltar a hidden champion?

[frankx1]

Hi guys,
I'm wondering why people dont talk more about Gibraltar for offshore incorporation.

I guess it has:

• 0% taxes as long as revenue is not accrued in and derived from Gibraltar
• Stripe and paypal available
• No sharia law like in UAE (so maybe especially interesting for adult businesses?)

All other jurisdictions I know of are either a huge headache and/or not 0% CIT like HK or SG, impossible to get payments like BVI, sharia countries like UAE which makes it impossible to run several kind of businesses there or some weird LLC structure that makes taxation more complicated like US LLC, since it doesnt pay dividends but all earnings are personal earnings.

Do I miss something about Gibraltar?
May incorporation itself, payments, banking way harder than I think? Or do you guys see any other downside here?

 

[koohl]

Gibraltar is not different and belongs under European regulations. I wonder why you think it should be better. Sure if you want to live there together with all the monkeys, fine, you can avoid taxes in exchange of a lot of monkey s**t.

 

[Konstanz]

It's not that cheap to get residence in Gibraltar.
UAE is much cheaper option.
Maybe this is the reason
Also it's very small and the same time cannot offer high quality /luxury lifestyle

UAE is mostly about for those who try to fake residencies. Nobody lives in UAE. This is why it's so much talked about.
They just get emirati ID card and pretend to be UAE resident in reality living in random countries around world
I met many UAE residents, 99% dont live in UAE

As I see online you still have to pay tax: Tax Residence | Gibraltar Finance | Insurance, Funds, Pensions, Taxation, Private Clients

 

[Sols]

I don't know if I'd call Gibraltar hidden. It's very well known. The reason it's not talked about here as much as for example Belize and Seychelles is probably that it costs more, isn't (wasn't) as secretive, and require (required) more paperwork. Now that international pressure has forced jurisdictions like Belize and Seychelles to comply with international standards, the only thing keeping Gibraltar from being as popular is cost.

And it's not that much more expensive. All in all, Gibraltar companies are comparable to Cyprus.

However, Gibraltar lost value due to Brexit. Not being a member of EU (but still bound by pre-Brexit EU directives) puts it in a different situation than before. With zero VAT and other tax and regulatory advantages, Gibraltar was very valuable for some EU businesses. By and large, Malta and Cyprus have gained what Gibraltar lost.

Forming and maintaining a company is easy. Banking is difficult, comparable to Cyprus and Malta non-resident controlled companies.

Living in Gibraltar isn't for everyone. Very small, very cramped.

 

[Don]

I don't know if I'd call Gibraltar hidden. It's very well known. The reason it's not talked about here as much as for example Belize and Seychelles is probably that it costs more, isn't (wasn't) as secretive, and require (required) more paperwork. Now that international pressure has forced jurisdictions like Belize and Seychelles to comply with international standards, the only thing keeping Gibraltar from being as popular is cost.

And it's not that much more expensive. All in all, Gibraltar companies are comparable to Cyprus.

However, Gibraltar lost value due to Brexit. Not being a member of EU (but still bound by pre-Brexit EU directives) puts it in a different situation than before. With zero VAT and other tax and regulatory advantages, Gibraltar was very valuable for some EU businesses. By and large, Malta and Cyprus have gained what Gibraltar lost.

Forming and maintaining a company is easy. Banking is difficult, comparable to Cyprus and Malta non-resident controlled companies.

Living in Gibraltar isn't for everyone. Very small, very cramped.

As you said.. the keyword is costs and costs of substance.
Substance requirements in Gibraltar are complex. The key is to prove that the company was not established only for tax purposes. To satisfy the substance requirements, there is an option for companies that are going to work in the Gibraltar market, i.e., that offer services or sell to Gibraltarian residents. In this case, you’ll need an office (at least a desk), registration in ETB (employment), an employee who lives in Gibraltar or nearby, and an activity license. The company will then pay 12.5% in income tax.
It's much easier to build a substance in any country that is bigger than Gibraltar.

In Cyprus you have soon 15% CIT, while in Malta you can get away with 5% effective CIT:

• All companies that are tax residents of Cyprus are taxed on their income accrued or derived from all sources in Cyprus and abroad.
• A company incorporated in Malta is considered as both domiciled and resident in Malta and is consequently taxable on a worldwide basis. A non-Maltese incorporated company that is resident in Malta through management and control is subject to Maltese tax on income arising in Malta and on income received in/remitted to Malta.

 

[frankx1]

Thanks!
Where do you guys see the downside/potential risks in this setup:
- Gibraltar company (non-resident, managed from abroad), no profits from activities inside Gibraltar --> 0% CIT to be payed in Gibraltar
- Banking via some traditional bank (if possible), else via some neobank.
- Payments via Stripe/Paypal
- UBO is sitting somewhere in TH, distribute dividends of the operative company in Gibraltar in the next calendar year (to comply with TH law).
- The business is completely digital/online and all customers are sitting in EU/US, meaning the actual value creation does not happen in TH.

This should result in 0% CIT and PIT, or did I miss something?

 

[Sols]

Thanks!
Where do you guys see the downside/potential risks in this setup:
- Gibraltar company (non-resident, managed from abroad), no profits from activities inside Gibraltar --> 0% CIT to be payed in Gibraltar

From a Gibraltar POV, that sounds fine. Make sure you sort out tax residence for the company/yourself somewhere else.

- Banking via some traditional bank (if possible), else via some neobank.
- Payments via Stripe/Paypal
- UBO is sitting somewhere in TH, distribute dividends of the operative company in Gibraltar in the next calendar year (to comply with TH law).

That's going to make banking a little harder but not impossible. If you're the sole or majority owner and resident in Thailand, this can adversely affect your chances of success with banks and payment processors.

- The business is completely digital/online and all customers are sitting in EU/US, meaning the actual value creation does not happen in TH.

Tax residence is not (only) based on where customers are. Where the effective place of management takes place is much more important. Value creation is (also) where the business decisions are made. A company can have multiple tax residences.

However, Thailand isn't exactly going to great lengths to catch foreigners who aren't paying tax on income from or attributable to foreign companies.

I generally stay away from structures that rely on lack of enforcement (things can change). But it's no secret there are a lot of people doing what you're proposing while based in Thailand.

 

[ecool]

Most difficult thing will be banking. Most banks will not open you bank account unless you are really living in Gibraltar and have some kind of residence or proof of address.
And how do you operate a company without bank? That is the problem. Same applies for stripe

 

[blackmax]

You can easy open a bank account for non-resident Gibraltar company at wise.

 

[Onassis]

Since when does Gibraltar have economic substance requirements?

 

[Walter Rowe]

Keep on coming back to Gib as a good alternative - IF - you can crack the banking issues
Wise says it doesn't have issues with Gib - - but I'd hate to have all my eggs in 1 basket
Don't want to live there - Ive been before and Small doesn't quite cover it
But if you had a say nomad visa for Dubai or were bouncing back and forth from Thailand - then it looks a nice set up

 

[zzzzzz]

It's not that cheap to get residence in Gibraltar.
UAE is much cheaper option.
Maybe this is the reason
Also it's very small and the same time cannot offer high quality /luxury lifestyle

UAE is mostly about for those who try to fake residencies. Nobody lives in UAE. This is why it's so much talked about.
They just get emirati ID card and pretend to be UAE resident in reality living in random countries around world
I met many UAE residents, 99% dont live in UAE

As I see online you still have to pay tax: Tax Residence | Gibraltar Finance | Insurance, Funds, Pensions, Taxation, Private Clients

@Konstanz what do they use for proof of address in UAE - bank statements? Or do they own/rent home in UAE - utility bills?
Actually they can live in some EU country in their apartment but don't register after 3 months...probably nobody would notice. Can they open bank account in EU if they have UAE address in passport/id ?

 

[daniels27]

@Konstanz what do they use for proof of address in UAE - bank statements? Or do they own/rent home in UAE - utility bills?

You change the address at your other bank to the UAE one and show that statement.t

Actually they can live in some EU country in their apartment but don't register after 3 months...probably nobody would notice.

RAF member Daniela Klette lived 30 years in Germany without being noticed. Berlin, München, Düsseldorf, all no problem for years. It is easier if you are from a Schengen country as otherwise you would need a visa. But even that is no big problem. You just enter through Gibraltar where the border checks are very loose.

Can they open bank account in EU if they have UAE address in passport/id ?

If they are from a Schengen country, they can open any bank account. Most likely, there is no need for an address proof. They can also get a credit card from their own country.

Most EU passports do not have addresses listed. Even the most ID cards are without address. If you are unlucky and have one with address, get a bank account from a country without address on their own documents, chances are big that they won't look at it.

Use any local address of a friend to get the cards.

 

[Marshal]

Most EU passports do not have addresses listed. Even the most ID cards are without address. If you are unlucky and have one with address, get a bank account from a country without address on their own documents, chances are big that they won't look at it.

I know that Austrian and Dutch ID cards does not contain addresses on them. Any other EU countries you might know?

 

[daniels27]

I know that Austrian and Dutch ID cards does not contain addresses on them. Any other EU countries you might know?

As said, most do not, only few have addresses.

https://en.wikipedia.org/wiki/National_identity_cards_in_the_European_Economic_Areahttps://en.wikipedia.org/wiki/Passports_of_the_European_Union
With address on both ID and passport

• France

With address only on ID

• Bulgaria
• Croatia
• Germany
• Italy
• Malta
• Romania
• Slovenia
• Spain

Without address

• Austria
• Belgium
• Cyprus
• Denmark (only has real passports)
• Estonia
• Finland
• Greece
• Ireland
• Latvia
• Liechtenstein
• Luxembourg
• Netherlands
• Norway
• Poland
• Portugal
• Slovakia
• Sweden
• Switzerland

 

[Roo]

I talked to an incorporation agent (Form-A-Co (Gibraltar) Limited – Gibraltar Companies, Trusts, Yacht Registration, Residency, Offshore) about Gibraltar recently about a non resident company, and it seemed to require loads of paperwork, they pretty much wanted to know what I had for breakfast too. It seemed a lot for them to ask about details of my clients at incorporation including contact details. They also asked for two proof of address documents, a reference from a banker, lawyer or an accountant addressed to them based on a template (not sure if many people can get that (depending on where you live asking for something like that may sound crazy) and stuff like full details about source of funds, estimated turnover, value and frequency of transactions, etc. They also wanted original documents mailed to them.

It seemed quite insane compared to incorporating a SG company which was all done quickly online.

 

[JohnLocke]

Yes, it has really worked well for the OECD and the USA to participate in implementing all the many surveillance rules for the individual and to have it all neatly packaged under the designation AML and KYC!

One must say the simplest psychology in the world used by powerful people becomes the most effective weapon. It is paradoxical.

 

[zzzzzz]

If they are from a Schengen country, they can open any bank account. Most likely, there is no need for an address proof. They can also get a credit card from their own country.

Most EU passports do not have addresses listed. Even the most ID cards are without address. If you are unlucky and have one with address, get a bank account from a country without address on their own documents, chances are big that they won't look at it.

Banks like n26, Revolut and EMI Wise won't aboard you if you're UAE resident. I'm not sure how they will react if they see your EU citizenship but with UAE address in passport/id but you give them address of your EU apartment (rented/owned) with EU proof of address (bank statement, utility bill), EU phone number, EU tax id? Of course you're not tax resident in that EU country, you just use residency details for opening account.

 

[Marshal]

As said, most do not, only few have addresses.

https://en.wikipedia.org/wiki/National_identity_cards_in_the_European_Economic_Areahttps://en.wikipedia.org/wiki/Passports_of_the_European_Union
With address on both ID and passport

• France

With address only on ID

• Bulgaria
• Croatia
• Germany
• Italy
• Malta
• Romania
• Slovenia
• Spain

Without address

• Austria
• Belgium
• Cyprus
• Denmark (only has real passports)
• Estonia
• Finland
• Greece
• Ireland
• Latvia
• Liechtenstein
• Luxembourg
• Netherlands
• Norway
• Poland
• Portugal
• Slovakia
• Sweden
• Switzerland

Yes, Denmark is the only one without an ID card as of 2024. People should also be aware that majority of the EU/EEA cards come with NFC chips and banks can read info from it. Most also include residential address. Exception is probably Portugal (no chip) if I'm not mistaken. So if you have a new ID it probably has an address just in a digital format.

Banks like n26, Revolut and EMI Wise won't aboard you if you're UAE resident. I'm not sure how they will react if they see your EU citizenship but with UAE address in passport/id but you give them address of your EU apartment (rented/owned) with EU proof of address (bank statement, utility bill), EU phone number, EU tax id? Of course you're not tax resident in that EU country, you just use residency details for opening account.

As stated above most of the new ID cards come with NFC chips with an address in a digital format and passports except for France do not contain any residential address info. So unless you tell them yourself neobanks like N26 or Revolut won't have access to it as you are applying for one by using your phone.

 

[daniels27]

Banks like n26, Revolut and EMI Wise won't aboard you if you're UAE resident. I'm not sure how they will react if they see your EU citizenship but with UAE address in passport/id but you give them address of your EU apartment (rented/owned) with EU proof of address (bank statement, utility bill), EU phone number, EU tax id? Of course you're not tax resident in that EU country, you just use residency details for opening account.

As mentioned, in most cases, it is not a problem. Only very few countries care about the address on the cards, in which case you just use your passport. And just for the record, many countries such as Germany also only list a domestic address and no foreign addresses, in which case you can tell the bank whatever you want. If you are French, then just get a passport in Italy where you stay 4 weeks at your friends place.