Economic developments over the last year have caused much political focus on the on the operation of banks on the UK mainland and overseas. The G20 summit in April saw the decision made to enforce transparency and economic sustainability as a means to ensure that the world economy remains more stable in the future – and for the UK’s overseas territories (including Bermuda and Cayman) to comply, they had to sign 12 tax information exchange agreements (TIEAs).
Although certain territories have already met the target of 12, Gibraltar is well on its way and began signing their TIEAs on the 31st March 2009. Since then, it has signed agreements with another eight, including Ireland, New Zealand and the United Kingdom. Not bad for an island that many had thought unlikely to be able to shrug off its label as ‘tax haven’, for the more positive: Offshore Financial Centre.
However, entrepreneurs and those with a high income can still benefit from favourable taxes in Gibraltar, and its nearby location to the Costa del Sol is great for those who’d prefer to spend sterling than euros. Conditions of residency sets it apart from other territories though, if you are willing to pay more than £250,000 for property you need only spend one day on the island before you are considered one of its 30,000 residents. Though this is rumoured to change in 2010.
Additionally, despite its EU membership and ties to UK and Spain, Gibraltar’s own economy has proved considerably stronger with a reported 6.6 percent growth rate. With this in mind the island (and others) is set to be subject of an HM Treasury report into the challenges faced as it adheres to more stringent rules – and it will be interesting to see what the future holds.