anita123

Hi all,

I am looking to move my business out of the UK as I'm tired of living here and want somewhere with a warmer and more tax friendly climate which is within the same timezone more or less. We need to take on premises/staff so want to consider our decision carefully. Gibraltar is looking very attractive from a taxation point of view for my small business, but my initial research suggests that Income Tax has just changed and Brussels are looking to ruin the party by forcing corporation tax on Gibraltan businesses - still more attractive than the UK though so possibly worth the move.

I see a lot of people work in Gib and commute from Spain; La Linea, etc, presumably because of the difference in cost of living. That raises a few questions for me which I'd be grateful for your honest feedback on please:

- How does it work in terms of personal taxation if you work in Gib but commute from Spain? Which country's Income Taxes apply and (if anyone happens to know), how does it work out with dividends if you're resident in Spain but company registered in Gib?
- Is it easy to hire people down there? We're looking at 2 part-timers, one for customer services/relations, another for marketing entry level to start with. Would I be fighting to gain/retain? I have seen very mixed views on this around the forum.
- I have seen a lot of BIG office space in Gibraltar, but nothing yet for small businesses - is there a dearth? I know I'll have to base my offices/staff there to stand a chance of getting the tax breaks due to the current changes, but on such a small island I'm wondering how easy/affordable that is?
- La Linea - Most people seem to think it is on the up, which works for me But are there any areas to avoid or 'things to be aware of' in looking for a rental apartment (not planning on buying)?
- I am happy to learn Spanish, but am likely to possess more enthusiasm than ability in this pursuit - to what extent is this likely to inhibit my quality of life?

I am sorry if I've asked anything 'obvious' - I have scoured the forums prior to posting - grateful for any feedback you may have.

Many thanks and Happy New Year!

jdr

Have you ever been to Gib ?
If not, I would suggest going there for a couple of hours and checking out the rental prices that are very high etc.
It may help to get some answers if you said the type of business you are running, without going into the advertising side of it.

wheatsheaf42

I think you will find that you will pay income tax in accordance with where you are resident - in this case Spain- for over 183 days a year. Spanish income tax is higher than in the UK from what I have read (45% at incomes over €45,000 for example, compared with 41% including NI on amounts over £39,825).

On the corporation tax issue the EU are not foisting corporation tax on Gib companies- they already pay 35% on their profits. What the EU have said is that the nil tax regime they allow foreign companies to get away with is unfair state aid for overseas companies. Gib are looking to bring in a new corporation tax which includes both foreign and local companies so that they both pay the same rate, which Gib says will be "low".

anita123

jdr - Sure, have looked at rental prices online last week (residential and commercial) and yes, seems to be high, which I assume is why people head over the border. But that then raised question of weighting income tax into equation. Planning on heading over in Jan again.

- wheatsheaf - sorry, I should have been clearer on corp tax - I was meaning exempt companies - we are unlikely to trade in Gib as most of our clients are abroad (http://www.gibraltaroffshore.com/gib...mptcompany.htm). Certainly looks as though a few calls are necessary though.

Thanks both for your advice.

Does anyone have any experience of setting up on Gibraltar?

Fredbargate

Hi folks I have been lurking for sometime, but it's now time to break the silence.

Fred

Try the following link it may answer a lot of your questions..

http://www.gibraltar.gov.gi/

In the link above you will find information on income tax calculations, see Budget 2007 On-Line Tax Calculator


If you work in Gibraltar you will pay income tax in Gibraltar as do the 5000+ people who cross the frontier daily.
I believe there is no reciprocal agreement on income tax between Gibraltar and Spain, however I would not like to be in the shoes of any Spanish minister who tried to bring in dual taxation as the majority of frontier workers are Spanish.

Rental accommodation in Spain is generally cheaper than Gibraltar. Parts of La Linea like all towns are unsavory. Depending on wether you have transport and how long you are prepared to travel for will decide on where you should look to live.
Crossing the frontier in a vehicle has become much easier in the last year only to be confounded by the lack of parking in Gibraltar.

To rent a small commercial property in Gibraltar expect to pay in the region of £250/mtr/yr + Rates + service charges

anita123

Thanks very much for some very good answers, much appreciated.