In this article, we discuss banking in Gibraltar. We’ll uncover the advantages of opening a bank in Gibraltar, why Gibraltar banks might interest you, and who can benefit from banking in Gibraltar the most.
Since Gibraltar’s banking sector underwent a massive overhaul to eliminate tax loopholes and shed its tax haven status in the past years, we also discuss whether banks in Gibraltar might still save you on taxes.
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Gibraltar is a British overseas territory occupying a narrow peninsula of Spain’s Mediterranean coast. The territory has a small population of about 32,000 people. 80% of them are Gibraltarians, children of people born in Gibraltar before 1925, and the rest are aliens and families of British military personnel.
Gibraltar has been a symbol of British naval strength since the 18th century. Banking is a pillar of the economy, although just over 10 banks are here. There are no agricultural activities on the land since there’s no space. The territory occupies a 3-mile by 0.75-mile piece of land.
The British military garrison and naval dockyard play an integral part in Gibraltar’s economy, and its naval operations often use the port’s facilities. When the Suez Canal opened in 1869, Gibraltar greatly increased its significance as a provisioning port.
Today, its main sources of income are ships and military personnel provisioning, re-export trade, and tourism. Its cultural and legal systems are similar to the UK’s, and the Gibraltar Financial Services Commission supervises all banks. It also uses Pound Sterling currency.
Gibraltar is a long-established center for international banking. The wealthy have flocked here for decades for low taxes, banking, and asset protection. The government tried imposing more rigid financial regulations to reduce tax loopholes and ensure transparency and international cooperation.
The territory is still a low-tax jurisdiction even after the EU Savings Tax Directive in 2010. Investors still enjoy low capital gains, inheritance, and corporate taxes, and Gibraltar banks offer the EU deposit protection of €100,000. Gibraltar-based banks constitute large global institutions, private and investment banks, and building societies.