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Gibraltar Residency – Options

Find out about the advantages, procedures and our available services for obtaining residence in Gibraltar.

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Residency in Gibraltar – Options

There are essentially three types of Gibraltar residency available to British/EU nationals and/or other nationals with permission to reside in Gibraltar. The suitability of each option would very much depend on what you are trying to achieve for your own tax-planning purposes.

Residence Status In Gibraltar

1. Category 2 Resident Individual Resident

Typically suited to individuals seeking to extricate themselves from another higher tax jurisdiction, where the tax authorities want to see proof of the individual’s substantial commitment to pay tax in Gibraltar. The applicant has to commit himself to buy or rent (for a minimum period of 1 year), a property of “prestige” value that has been pre-approved by the Finance Centre as suitable for this type of status applicant (ie. not typically available for purchase by the local tax-payer). Minimum tax contribution in Gibraltar = GBP £22,000 per annum (maximum = GBP £29,600 per annum).

Who is eligible for Category 2 Individual Resident? (click here)

  • Category 2 Individual Resident is available to all non-Gibraltarian individuals who establish a residential address in Gibraltar, have not been ordinarily resident in Gibraltar during the preceding 5 years, and do not derive any income from Gibraltar sources other than from Gibraltar Tax Exempt Status companies.
  • The Government of Gibraltar will normally insist that the address to be established in Gibraltar is rented for a minimum of 12 months or purchased by the individual for his exclusive use during a minimum period of 7 months in a year, and that he resides in Gibraltar for a minimum of 30 days in each calendar year (which period need not be consecutive).
  • The minimum costs of purchasing an apartment for this purpose will normally range from around £300,000 to £500,000 for a one-bedroom flat with minimum dimensions of 60m2, and will have to be classified as an approved property for this purpose.

What are the advantages of Category 2 Individual Resident? (click here)

  • Category 2 Individual Resident is obtained by application to the Licensing Authority Gibraltar, and once granted allows the individual to elect the level of taxation which he wishes to pay in Gibraltar while being guaranteed that his total tax bill will not exceed approx. GBP £29,600 per annum. The minimum amount of tax payable in Gibraltar under this status is around GBP £22,000 per annum with the provision that the tax is only levied on the first GBP £60,000 of assessable income. In other words, we can confirm that an applicant’s worldwide tax liabilities will be exclusively held in Gibraltar, but capped at a maximum tax bill of GBP £29,600 regardless of the amount of worldwide income earnt, and excluding any taxes levied on assets held in foreign jurisdictions (such as rental income).
  • Category 2 Individual Resident, therefore, can be particularly useful for those persons who may wish to show a tax authority in another jurisdiction that they are subject to taxation in Gibraltar with a view to persuading them that they should only be expected to pay a nominal amount of tax in their home jurisdiction, at the same time as they keep their taxation level in Gibraltar to an absolute minimum.
  • It should be noted, however, that simply because a Category 2 Individual pays tax in Gibraltar, this does not automatically mean that they will not be taxed by one or more other foreign jurisdictions. It would obviously be up to the individual himself to ensure that this does not happen and that his tax affairs are arranged competently to accommodate a minimum tax commitment of between GBP £22,000 and GBP £29,600 per annum in Gibraltar (assuming that this represents a substantial saving to his tax bill in the country where he is currently tax resident).

Documentation to be presented before Licensing Authority together with the individual’s initial application (click here)

  • 1 Curriculum Vitae pertaining to the individual seeking Category 2 Individual Resident in Gibraltar.
  • Evidence that the applicant has approved Category 2 Status accommodation available to him in Gibraltar as a rental or purchase.
  • A signed Category 2 Application Form (attached). Please sign and return to us at your convenience together with all other documentation requested for eventual presentation to the Licensing Authority.
  • 2 references appearing on professional letterhead regarding the good character and financial standing of the individual in question. One reference should be from a banker, and the other may be from a lawyer or accountant. (Please see draft reference attached).
  • A written undertaking from the individual’s representative in Gibraltar confirming that his client will abide by the Category 2 Individual Resident conditions. (FORM-A-CO’s role).
  • A declaration from an accountant as to the estimated total net worth of the individual applicant which should stipulate a net worth in excess of GBP£2 Million. (Please see draft declaration attached). Evaluation of an applicant’s net worth should encompass all assets known to belong to the applicant, ranging from immovable assets to liquid assets and across all jurisdictions.
  • 1 copy of the individual’s passport.
  • Evidence of Private Medical Insurance. Cover must explicitly include Gibraltar and must provide minimum cover of GBP £100,000.
  • A fee of GBP £1000. (This is not an annual fee, and is exclusive of any future tax payments made by the individual to the Gibraltar tax authorities).

Suitable property in Gibraltar

It is not possible to select a property that is not currently approved for CAT 2 Status. We can confirm that a property that is smaller than 50m2 will not secure approval as a suitable property for a CAT 2 applicant (even if it is for a single person).

CAT2 Status is only obtainable against a verifiable commitment to reside in an approved property for a minimum of 1 year, and not the other way around.

Ability to continue using Gibraltar companies

Category 2 Residents of Gibraltar can continue to use Gibraltar companies to generate foreign income and/or invest in Gibraltar (eg. the purchase of properties or the opening of bank accounts) tax efficiently.

We can confirm that Category 2 Residents may not need to set-up a Company if they are able to channel all their global income into their own name as a CAT 2 Individual Resident of Gibraltar. However, any investments in buy-to-rent property in Gibraltar would ideally be held in the name of a Gibraltar Company given that rents received would always be treated as “Gibraltar-source income” and would therefore not be exempted from tax by virtue of the investor’s Category 2 Individual Status. 

Further documentation to be presented to the Gibraltar Immigration Department for the issuing of a Gibraltar Identity Card (click here)

If a Gibraltar ID Card is required, the following documentation would be required to be presented in person by the applicant individual after a period of about 2 to 3 working weeks from the time that a Category 2 Status Certificate is issued by the authorities:

  • Details of the Gibraltar property held by you either by way of ownership or rental. For example, a copy of the lease in your name and/or a utility bill or similar document displaying your name and Gibraltar address.
  • Confirmation of Private Medical Health Insurance. Although you are not seeking to become resident of Gibraltar as a Cat 2 Individual, you would still need to show that you are not going to be a “burden on the state”, and would need to provide evidence of health cover explicitly including Gibraltar in the policy document.
  • A current copy of your passport.
  • Two recent passport-sized photographs
  • Your signature on a Gibraltar ID Card Application Form
  • A lot of patience! (The last time we checked, these cards were taking between 6 and 8 weeks to get issued).

Our prescribed fee for this service is GBP £450.


What a successful applicant may expect to receive confirming his residency in Gibraltar

  • A Certificate stating that he is registered as a Category 2 Individual.
  • A Gibraltar identity card which is, essentially indistinguishable from a Gibraltar residency card and which is valid for a period of 1 year, but thereafter may be renewed via a relatively simple process which requires the applicant to be present in person.
  • A receipt/certificate from the Gibraltar Tax Department upon receipt of the first payment of tax.

Annual Responsibilities of the Category 2 Individual

  • To be present in person once a year for the renewal of his Gibraltar identity card.
  • To submit a statement of accounts in June of each year to the Gibraltar Tax Department testifying to the amount of worldwide income earned so that tax at the agreed rate may be properly assessed. There is no requirement for a full set of accounts to be presented, nor for the details contained therein to be audited.

The cost of our attendance to this service on behalf of the client is GBP £400.

Costs

Our full costs for applying for category 2 status (inclusive of the GBP £1000 application fee payable to the government of Gibraltar), is GBP £4000.

In addition to the above we would levy a Retention Fee of GBP £450 per annum as from the end of the first year’s residency, to act as the Category 2 Individual’s representative in Gibraltar to liaise with the Gibraltar Licensing and Tax Authorities and ensure that he is compliant with his annual responsibilities.

2. Self-Sufficiency Residency

This is not a tax status which means that it does not provide an applicant with a Tax Identification Number. It is therefore typically suited to individuals with relatively high savings or pension arrangements who are retired or who are not currently tax resident in any particular jurisdiction, but who feel that they need to settle down and show some form of commitment to a particular jurisdiction. At the end of this process, the client obtains a Gibraltar Resident ID Card, but does not obtain a Health Card or any other access to local services unless he volunteers a regular Social Security contribution to the local Tax Authorities. The applicant has to commit himself to buy or rent (for a minimum period of 1 year), a property situated in Gibraltar which does not have to seek prior approval from the Finance Centre. Minimum tax contribution = none.

How to apply for Self-Sufficiency Status (click here)

In order for us to be able to progress an application for a Gibraltar ID Card on your behalf based on your ability to confirm that your private means allow you to be considered to be self-sufficient, we would need you to provide us with the following:

  • Details of the Gibraltar property held by you either by way of ownership or rental. For example, a copy of the lease in your name and/or a utility bill or similar document displaying your name and Gibraltar address.
  • Evidence as to your self-sufficiency. To consist of six months’ worth of bank statements (showing substantial savings/earnings) or details of your pension or QROPS or similar documentation related to the rest of your accumulated wealth.
  • Confirmation of Private Medical Health Insurance. Although you are not seeking to become resident of Gibraltar as a Cat 2 Individual, you would still need to show that you are not going to be a “burden on the state”, and would need to provide evidence of health cover explicitly including Gibraltar in the policy document.
  • A current copy of your passport.
  • Two recent passport-sized photographs
  • Your signature on a Gibraltar ID Card Application Form
  • A lot of patience! (The last time we checked, these cards were taking between 6 and 8 weeks to get issued).

Our prescribed fee for this service is GBP £450.

3. Ordinary Gibraltar resident

This status is typically suited to individuals looking to establish a working presence in Gibraltar and to pay tax on their earnings locally either as an employee or as an employer who sets-up his own Company to pay taxes at local rates. Minimum tax contribution = to be determined based on level of remuneration and commitment to pay Social Security contributions.