Investing in the UK | Gibraltar as a Strategic Business Gateway - Acquarius

[Liz Seyi]

Unlock the benefits of Gibraltar's tax advantages and strategic position for UK investments. Discover why Gibraltar is the ideal gateway to the UK market.

The recent election in Britain resulted in a majority Labour government, and barring unforeseen events, the next poll will not occur until 2029. Like its G7 and EU peers, the UK has faced economic challenges in recent years, with inflation soaring post-pandemic.

Despite these challenges, the UK presents a compelling investment opportunities gibraltar. Inflation has returned to “normal” levels, and employment remains relatively stable. Moreover, at the time of writing, the pound is valued at just under US$1.30, offering exceptional value for money in historic terms. A stable government suggests that, despite likely tax increases on the horizon, we can anticipate an improving business climate upon which foreign investors may depend. This could be an ideal moment to consider establishing or investing in UK companies.
At 66 million, the UK’s population is second only to Germany in western Europe. Known for its consumer spending, the domestic market is vast and appealing for any business looking to expand. Additionally, excellent logistics, including direct rail links to continental Europe, and several world-class air and sea ports, create an attractive environment for businesses across various industries.

Inward UK business investors might hold their shares in that business as part of a wider group or standalone typically including an overseas structure. Gibraltar enjoys an enviable strategic position in this regard. In my view, the jurisdiction should be considered a key location for such international holding or headquarter company entities.

The UK has entered into over 100 double tax treaties worldwide, including one with Gibraltar, resulting in one of the most extensive treaty networks globally. These agreements aim to avoid double taxation on income earned in one country when paid to a resident of another. Furthermore, the UK offers another significant benefit to investors relating to withholding tax (WHT) on dividends. While business activity in the UK is taxed at the relevant corporation tax rate, the absence of WHT is particularly advantageous, especially when routing dividends to a parent structure in Gibraltar, where again, WHT does not apply.

Gibraltar is a “low tax” rather than a “no tax“ jurisdiction. Gibraltar companies pay corporation tax of 15% that, crucially, is charged on income that accrues in or derives from Gibraltar. Future articles will discuss the benefits of using Gibraltar companies but to summarise, it boasts robust legislation based on English common law, uses the pound sterling, English as its official language and operates in the Central European Time Zone. Gibraltar really does stand out as an excellent choice for those looking to invest into other countries. It is with good reason that Gibraltar is often described as the Gateway to the UK.

“Small but perfectly formed”, Gibraltar prides itself on its ease of doing business. It is well regulated, but not overly so, and the jurisdiction’s professional intermediaries and government departments are easily accessible to those looking to establish a presence locally for the first time. Numerous banking options are available, ranging from well-established local entities to international and private banks.

Since Brexit, Gibraltar and the UK have adopted "passporting” arrangements, allowing regulated businesses in one state to establish freely in the other. Substance is increasingly important, and here the Rock offers an unbeatable combination. There is an excellent range of office and business premises in a Mediterranean setting, with well-trained multilingual staff available. This is coupled with a sympathetic approach from government when a company needs to bring in senior staff or specialists not found locally. And all this to be found just 2½ hours from London. Considering these factors together, non-EU companies seeking market entry into the UK would be well advised to consider Gibraltar as a location for a headquarters or holding structure.

In recent decades, the growth of Gibraltar’s finance sector has resulted in the territory being home to a large and growing professional community. This includes lawyers, accountants and bankers, along with world class expertise in areas such as insurance, distributed ledger technology, and gaming – Gibraltar is recognised as a global market leader in both latter categories.

In short, now is an ideal time to consider establishing – or at least expanding into – the UK. Gibraltar is extraordinarily well-placed to offer tried and tested solutions for establishing such international business. Please get in touch with us at Acquarius to start that journey.