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PROMOTION | ECONOMIC DEVELOPMENT Gibraltar International Business Hub G ibraltar has served as the gateway to the Mediterranean for centuries, and it is a preferred entry point to the European Union (EU). It provides access to a market of 520 million, and to North Africa—with Morocco less than 10 miles away—across its famous strait. A British Overseas Territory since 1713, Gibraltar not only benefits from a legal system inherited from the United Kingdom, but is home to a unique mix of cultures at a strategic meeting point of civilizations. The Rock, as it is commonly known, is an economic powerhouse in its own right, founded on financial services, e-commerce communications, maritime services and tourism. Gibraltar’s GDP grew by 35% in the last five years, ranking it among the top ten economies by GDP growth worldwide, and the government is looking beyond its traditional European markets to cultivate closer business relationships with Bermuda, Hong Kong, South Africa and the U.S. As part of their effort to increase links with potential international partners, Chief Minister Fabian Picardo and Deputy Chief Minister Dr. Joseph Garcia visited Washington, D.C., this March. While there, they met with representatives of the U.S. Department of Commerce and the American Chamber of Commerce, which collaborated to launch the Gibraltar-American Chamber of Commerce (AmCham) earlier in the month. Under Picardo’s pro-business leadership, Gibraltar is one of the simplest and safest places to establish and operate a company in Europe. More than 18,000 companies are currently registered, paying corporation tax rates of just 10%. But Gibraltar is no tax haven. Since 2009, it has figured on the Organization for Economic Cooperation and Development’s (OECD) white list of territories that follow international standards for exchanging fiscal information. This May, the U.S. and Gibraltar signed an intergovernmental agreement (IGA) to improve international tax compliance. Based on effective infrastructure for automatic information exchange, both governments will lend mutual assistance in tax matters, with the goal of implementing the U.S.’s Foreign Account Tax Compliance Act (FATCA). “Gibraltar is totally transparent, in terms of taxes, with the main economies around the world,” Chief Minister Picardo points out. “We have tax-information agreements with the U.S. and all other members of the EU. We have extended the OECD’s tax information and exchange information with all the signatories of the multilateral convention.” Some 30,000 residents live within Gibraltar’s tiny 2.5-square-mile territory, but the population swells by over a third every day as some 10,000 people cross the border to go to work. While the unemployment rate in the surrounding area of Spain is 35%, Gibraltar has a jobless rate of just 2.5%, in addition to a highly educated, skilled and multilingual workforce, making it a great place to live and do business. Gibraltar Section Project Manager: Maria Nadolu | For more information, contact: Gabriel Gutiérrez—[email protected] | Statistical data and photos: H.M. Government of Gibraltar ECONOMIC DEVELOPMENT | PROMOTION A Successful Formula for Investment Last June, in his second budget speech as Chief Minister, Picardo revealed that Gibraltar’s economy surpassed $2 billion, driven by strong growth in its financial services and online gaming industries. The winning combination of his government’s staunchly pro-business stance and a dynamic and diversified private sector is paying rich dividends to all stakeholders. “We have developed banking, insurance and online gaming extensively, so investment has come,” explains Deputy Chief Minister Joseph Garcia. “Some of the largest gaming companies in the world are based in Gibraltar. They are here because we have a system of regulation that is second to none. We have been very successful in attracting investment to the extent that we can choose who we let in. We want only the best.” Gibraltar Minister of Financial Services and Gaming Albert Isola is a busy man, but in the next few months he will truly have his work cut out for him. “There is a whole slew of legislation we are introducing to improve our financial services’ framework,” he says. “This is being done in partnership with the private sector—listening to what they need products to do, and ensuring they are OECD and EU compliant.” Gibraltar is “situated at one of the main crossroads of world trade,” says Manuel Tirado, Deputy Captain of the Gibraltar Port Authority. Minister for Tourism, Commercial Affairs, Public Transport and the Port Neil Costa believes that “it is the most competitive and reliable port in the Mediterranean. We are promoting the port as a maritime hub where customers receive cost-effective services from leading maritime industry operators.” He adds that with a new air terminal, Gibraltar has excellent air services, and is working hard to sustain and expand them. n Why Gibraltar? Prime location •D irect access to Europe and Africa, the Mediterranean Sea and the North Atlantic Ocean • Able to distribute competitively priced VATfree goods and services to the markets of the EU and Africa Booming economy • GDP: $2.07 billion; GDP growth: 7.8% • GDP per capita (PPP): $65,027 Low costs • A quality, low-tax jurisdiction with a profitoriented capital base • Benefits from EU membership • Corporate tax rate: 10% Demographics • Total population: 30,001 • Annual visitor arrivals: 11,787,015 Q&A With Gibraltar’s Honorable Chief Minister, Fabian Picardo Gibraltarian by birth, Fabian Picardo studied law at Ox ford Universit y before returning home to join a leading law firm. A founder of the Gibraltar National Party, he joined the Gibraltar Socialist Labour Party (GSLP) in 2003 and became a member of Parliament the same year. He assumed the party’s leadership in 2011, before leading the GSLP to election victory and his appointment as chief minister of a coalition government that December. Following the global financial crisis, we are starting to see trade and employment recovering. How has Gibraltar fared? In the years that the world was going through the worst of the crisis, Gibraltar was weathering the storm quite well. Growth in our economy is actually ahead of what you might find anywhere else in Europe, and of the type that you might see in some Asian economies. Of course, we are dealing with a small economy, so it is easier to weather a storm as long as we ensure that the robust parts of what makes Gibraltar tick remain strong, even in times of economic crisis. What have been your main challenges to date as chief minister? It was important that we change the government from one that was an obstacle to business to a fast-moving, dynamic institution that facilitates business and makes decisions like a private-sector body when it needs to. Our private-sector partners required us to produce better value for the money. I think taxpayers and the voters, who are the shareholders of Gibraltar, are entitled to demand the same of me and of my fellow ministers. That sounds like a private-sector mentality, no? We have an eye on the bottom line. We need to make it easy to do business. We need to make sure we maximize employment. We need an educated population. These are things you would be looking at if you were CEO of a multinational corporation, and they should also be things I look at as, in effect, the CEO and the Chairman of Gibraltar PLC—transparency and accountability to our shareholders, the electors of Gibraltar. How would you describe Gibraltar’s workforce? Gibraltar has fantastic human capital. In 1988, we made a groundbreaking decision to finance any university degree for every Gibraltarian. Our opponents said it would bankrupt Gibraltar, but it has produced the greatest bank of workers in Europe. We are able to turn our skills to any sector and provide a workforce for any international company that may want to come. And we are not afraid of competition; we have a job market open to the 520 million people in the EU and grant work permits very liberally. That has served Gibraltar well, because we have learned from those who come from outside, in terms of both work ethic and skills.