20131021 gibraltar by new statesman

Small place, big market

Gibraltar: SteppingStone to Europe

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01 Gibraltar Cover:Statesman supplements 15/10/2013 11:55

2 | NEW STATESMAN | 18-24 OCTOBER 2013

FACTS & FIGURES

Tax information exchange agreements

Ranked in toparea for growth

Growth per annum

Vessels pass through thestrait of Gibraltar annually

Gross income insurance

GDP Forcast

Shipping is 25%of the economy

Gibraltar economic facts

Source: Gibraltar Finance Centre

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18-24 OCTOBER 2013 | NEW STATESMAN | 3

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Small Rock, big business

The Chief Minister speaks P4

Business and nature P14

4 The Chief Minister’s storyGibraltar is looking forward and growing, says Fabian Picardo

8 The Rock is open for businessMany business sectors are thriving in Gibraltar, says Christian Hernandez

10 Financial state of the nationThe hard facts are laid out by the Gibraltar Finance Centre

12 Prosperity from going it aloneThe Rock is great, its neighbour should reciprocate, says William Dartmouth MEP

14 Business and ecologyThe environment is vital and can help businesses thrive, says Dr John Cortes

The paper in this magazineoriginates from timber that issourced from sustainableforests, responsibly managedto strict environmental, socialand economic standards. The manufacturing mills haveboth FSC and PEFCcertification and also ISO9001and ISO14001 accreditation.

Gibraltar is tiny. It is far from the UK, almost in Africa, but by dint of history – initially in the Treaty of Utrecht but through manysubsequent agreements, reluctant or otherwise– it has been British for 300 years. Strategicallyimportant during the Second World War, it has now become economically veryimportant to a lot of companies.

It has become an epicentre of the electronicgambling industry, with almost 30 companieslicensed to operate there. It is home to a largenumber of financial services and shippingcompanies. This has undoubtedly been

influenced by its low tax regime; but don’t fallfor the hype – it is a rigorously enforced regime,compliant with more European directives thanmany of its neighbours.

Its location means it is a natural gateway bothto Europe and to Africa. These may be amongthe factors apparently insulating it from theworld’s economic downturn, through which itcontinued to grow albeit at a slower rate thanbefore. It’s growing its software industry andangling its tourism to ensure longer visits frompeople at different times of the year. It’s tiny allright – but its prospects have never been so. l

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First published as a supplement to the New Statesman18-24 October 2013.© New Statesman Ltd. All rightsreserved. Registered as anewspaper in the UK and USA.

This supplement, and other policy reports, can be downloaded from the NS website at newstatesman.com/supplements

A centre for commerce P8

CONTENTS

ARTICLES

03 contents:Statesman supplements 15/10/2013 12:08


Recent blockades on its border havethrown the news spotlight on toGibraltar once more. The Spanish,to outsiders, seem to have an ex-cellent argument; just look at the

map and where the Rock is located – this isobviously Spanish territory. It’s an under-standable point of view.

History, however, can make a mockery ofcommon sense. If the territory is obviouslya part of Spain, then Spain, as it’s part of thesame land mass, is surely part of Portugal.Or the other way around. Or part of a singlecountry called “Europe”. And how comeEurope isn’t part of Asia, anyway? Coun-tries and their boundaries have for a longtime been defined by agreement and treatyfollowing conflict, Gibraltar among them.

This is why it is currently British and hasbeen for 300 years – in other words, longerthan America has been American. And thepeople are very pro-British – one way to en-sure a population is fiercely proud of its na-tionality is to challenge it. If self-determin-ism means anything, the Rock is British.

It’s important to understand this point ofview even if you don’t share it, to compre-hend the backdrop against which the HonFabian Picardo became Chief Minister ofGibraltar in December 2011. Heading up acoalition between the Liberals and theGibraltar Socialist Labour Party, which hadbeen in opposition for 16 years, he hasfound himself in the middle of the latest in along line of tense exchanges betweenGibraltar and its immediate neighbour.

Gibraltar: the Chief Minister’sstory

by Guy Clapperton

Recent border skirmishes with Spain have highlighted the tensions between theBritish territory’s history and geography. How-ever, Fabian Picardo believes the place is asound place to invest

INTERVIEW

Normally, however, the 30,000-strongpopulation conducts its business as usualand connects not only with Spain and theUK, but with Africa, visible on a clear dayfrom the top of the Rock.

For such a small place it attracts a lot of in-terest, the chief minister agrees. “Gibraltarrepresents added value as a place to do busi-ness within the European Union,” he ex-plains. “It’s a kind of stepping stone for peo-ple who are establishing themselves withinthe EU from outside, and it’s a great placefor headquarters if you are already within it.We apply all the standards you would ex-pect to see within the City of London to, forexample, the financial services that are pro-vided here, and in respect of gaming we areundoubtedly the most highly regulated ju-

4-7 Chief Minister:Statesman supplements 15/10/2013 12:48


risdiction in the world.” This might comeas a surprise to people who have boughtinto the classic caricature of Gibraltar assome sort of tax haven. The facts arestraightforward; tax is low (the jurisdic-tion’s Finance Centre outlines them onpage 10), but regulation of certain indus-tries and the imposition of these taxes isstrict. Contrary to the beliefs of some peo-ple in the UK and elsewhere, Gibraltardoesn’t cost us anything. There are Britishmilitary bases there, as there are in a num-ber of countries, but in every other sensethe Rock is financially self-sufficient.

Picardo is in no doubt that as a combina-tion it works. “It’s why we have attractedthe biggest names in online gaming. I like todescribe Gibraltar as the Silicon Valley of

online gaming and I believe all sectors hereare striving for that same level of excel-lence.” By this, he explains, he means an ex-cellent environment in which to do busi-ness, “and, to boot, in southern Europe, sobetter weather!”.

Gaming has certainly been an importantfacet of Gibraltarian business and it is in-structive to consider the other industries ithas brought through in its wake. “We’reseeing a software industry develop aroundthose who are established in gaming here,”he says. The gaming companies neededwebsite developers, then suddenly thosecompanies found they needed apps for thevarious different devices on which theirclients wished to play and the skills to ac-commodate these changes are migrating

towards the Rock. “We can also see an in-dustry building up throughout the finan-cial services industry based around soft-ware,” he adds. “We have a critical mass ofpeople with the software skills. Not asmuch as we’d like, but there is a body ofpeople gathering around the industries thatgive them work.” They have skills in thenew computer language, HTML5, and themove towards different devices for the endcustomer. “It reminds me of Silicon Valley.We may not produce a Microsoft or Appleevery year but there’s always a companydoing well and innovating.”

If London has its Silicon Roundabout,though, isn’t there a danger of simple band-

The Rock: a stepping stone for business



waggoning when it comes to encouragingtechnology firms to set up on the Rock? Picardo acknowledges the possibility, butpoints to the immediate and direct conse-quences of what is happening in Gibraltar.“In our economy, if I were to inject an extra£1m into the health service we would all seea huge change in the health services we re-ceived. That’s the sort of immediacy there isin an economy the size of Gibraltar,” hesays, and the impact of large amounts ofnew companies is evident very quickly inthe same way. “It’s possible to see whatsoftware companies around the financialservices and gaming industries are doingand how likely they are to achieve criticalmass and survive in the context of how theindustries they serve are doing.”

The economy was strong before remotegaming arrived, but its arrival meant theRock had to be ready for an increase in mod-ern business. “There has been investmentin Gibraltar airport, by the previous admin-istration and there are investments in infra-structure by the current government.These are not just in relation to broadbandavailability, but also in relation to power,port infrastructure – all these things are es-sential to run a proper diversified modernEuropean economy,” says Picardo. Not thathe feels the government should be in chargeof business. “The government has a role to

play in that, which we see as facilitatorrather than intervenor.”

So much for the sales pitch. What canpeople expect from Gibraltar when theyturn up with a view to setting up a businessor putting an existing company on to theRock? “We are governed by the rule of lawand this is very much part of what Gibraltarrepresents. The British way of doing thingsis hugely important in a place where peoplewant to establish themselves,” says Pi-cardo. “In a place where there is certainty,

where resolution of disputes is fair, equi-table and quick – in that context, what wedo from the point of view of taxation, whatwe do from the point of view of social in-surance, it’s a good place to have large num-bers of employees and to set up a corpora-tion.” Tax competition, he says, is a goodthing to offer positively.

He does not accept the commonly heldview that it’s some sort of tax dodger’shaven, though. “In response to the sugges-tion that Gibraltar is anything but an on-shore financial services centre, you just

have to look at the position of the UK,” hesays. “The difference between corporationtax in the UK and Gibraltar is smaller thanthe difference between corporation tax inthe UK and Spain, or the UK and Ger-many.” Gibraltar is not on any reasonablyestablished blacklist, he points out. “We areon the whitelist of the OECD, we’re on thewhitelist of the IMF, we’re signatories to sixinformation exchange agreements, wecomply with European Union rules onmoney laundering and on directives that af-fect financial services.”

In addition, Gibraltar complies with allEuropean directives and is ahead of manymember states in this respect, he adds – in-cluding Spain, which allows SICAVs – in-vestment vehicles allowing investors to pay1 percent tax. “I think often people have tolook beyond the rhetoric,” he says. It isworth noting, however, that Spain is farfrom the only country to allow SICAVs –the term itself is French, short for sociétéd'investissement à capital variable, they alsooperate in Luxembourg, Switzerland, Italy,Belgium, Malta, France and the Czech Re-public and there are restrictions.

So, people wanting simply to avoid taxshould also avoid Gibraltar? “Gibraltar iscompletely opposed to tax evasion and anymechanism somebody may want to put inplace to facilitate it,” says Picardo. “Youwould find it very difficult to find peoplewho were in Gibraltar to evade tax.”

As laid out clearly many times, theGibraltarians feel very strongly about theirright to be British. Nonetheless, one can’thelp wonder whether “British” is reallysuch a badge of quality for investors fromelsewhere. “The kitemark of the UK rule oflaw is so attractive,” argues Picardo. “It’swell known that people have come to Lon-don to sue in defamation actions, and incommercial actions.” This is not becausethe laws are skewed in favour of theclaimants, he believes, but because there is arecognition that the UK’s justice system isvery good indeed.

This has been replicated by Gibraltar for anumber of years. People who have donebusiness in other areas may find, he says,that foreign systems are less familiar andtake longer in dispute resolutions, share-holder disputes and so forth. “We do thatvery well in Gibraltar. We do ship arrestvery well because of our location and because we can apply the English rules for

Fabien Picardo, Chief Minister of Gibraltar

INTERVIEW

The kitemark of the UK ruleof law is attractive to many

businesses



the arrest of ships subject to the modifica-tions necessary for Gibraltar’s circum-stances.” Replicate that rigour across thesectors and Gibraltar is well known for itseven-handedness.

Unless you’re just across the border inSpain. It is indeed the case that many Span-ish people commute to Gibraltar every day;there is little or no issue on a personal level.In terms of leadership, recent times haveseen the Spanish authorities complain tothe UN about British dominion overGibraltar and, of course, the blockade.What would the chief minister say aboutsetting up in a territory in which, realisti-cally, this issue is going to flare up every fewyears? “It depends on which sector you’rein,” he says. “If you were thinking of open-ing up a small shop in our main street thatdepends on people crossing the frontier astourists to come and shop, you might takeone view.” Just about every other sector ofthe economy has been insulated, he says.“There has been a lot of noise from Madrid,but in terms of action there’s just been anannoyance as people wait for long periodsto cross from Gibraltar into Spain and viceversa.”

It would have more of an effect on peoplewanting to live in one territory and work onthe other, he suggests, but even they aren’tsuffering unduly. “In fact, most people wholive in Spain and work in Gibraltar haveknown this can be an issue, so people tendto park their cars in Spain and walk to work in Gibraltar.” Given the size of theRock, this is achievable for most people. It'san annoyance, he says, because life shouldbe easier.

Day to day, the Rock is up for business asusual and Picardo is considering which in-dustries are likely to be successful in the fu-ture as well as in the present. There is athriving retail sector on the main street andhe believes this will soon be backed by asubstantial online e-commerce market.“That is already developing very nicely. Ituses the internet as a portal for the sale –we’re looking at sale of actual goods fromGibraltar either to countries outside the EUor into the EU,” he says – and the point ofentry will be where the VAT is paid. Thiscould play well for the customer, who gets alower price; but didn’t some e-commercecompanies in the UK get a rough press forregistering in different places, such as Jer-sey, to avoid tax? “That is really down to theoperator. If the operator wants to have asuccessful business model, then it needs to

do it in a way that is fully compliant with allof the jurisdictions to which it wants to re-tail,” he says. “The lessons of the Jersey ex-perience have been learned by those peoplewanting to operate this kind of business.”

The other major industry on which theterritory is dependent is tourism. Ratherthan simply get tourists along to see theapes – which are great fun if you want asandwich or something stolen – the gov-ernment has started a programme of eventsthroughout the year to attract different au-diences. Ideally, they will be good for peo-ple who live on the Rock as well as visitors.The best example to date has been theTradewise Gibraltar Chess Tournament or-ganised by Brian Callaghan. This is now tenyears old and has been recognised in thepress, including the Telegraph, as thebiggest in the world. “What happens is thathotels are now full in January, when peoplewould not traditionally have come toGibraltar,” says Picardo.

The government now plans to developniche tourism to fuel the other fallowmonths of the year. A jazz festival is hap-pening this month, headlined by Jools Hol-land. A literary festival is also planned.Hopefully, tourists will now begin stayingfor more than a day. “It is absolutely truethat you could have done Gibraltar in aday,” Picardo believes. “The challenge to ushas been to add touristic strings to the bow,and that is what I believe you will start tosee very shortly.” The events will help; go-ing to a jazz festival on one day and seeingthe rest of the Rock on another, for exam-ple, will fuel businesses. The governmentdoesn’t see it as its job to come up with ideasfor these events, but will facilitate them.

There is also more to the territory itself

than a Rock and some macaques (althoughnobody should miss these). The proximityto and shared history with Africa as well asEurope has influenced the culture; there is adistinct gastronomy and much else. “I loveGibraltar’s beaches,” comments Picardo.“I’d like to spend as much of the 90-120days of sunshine we can enjoy at full-onsummer heat level for as long as I could, notjust for a day.”

He may be in the wrong job for spendingtime on the beach just at the moment.Meetings with people like the Prime Minis-ter and Foreign Secretary are reminders ofthe tensions in the background. There are,though, major areas in which Gibraltar isdoing well. The economy has stood up tothe financial crisis. Banks represented therehave not been lending any more than anybanks elsewhere and this has held upgrowth, but it has slowed rather thanstopped. In 2013, the government reportedgrowth of 7 per cent, and Picardo’s mani-festo in 2011 said Gibraltar would have aGDP of £1.65bn by the time of the next gen-eral election. “It doesn’t sound like much inglobal terms, but if you consider that wewere at £1.1bn when we drafted our mani-festo that’s important growth.” In terms ofthe budget, there has been a surplus duringevery year in which the rest of the world hasbeen in crisis. The most recent was £37m,the highest in Gibraltar’s history.

Picardo is very confident of his territory.“Gibraltar is continuing to do well. Taxesare continuing to come down, we are con-tinuing to have record surpluses, and everyyear is marked by an increase in GDPgrowth. We are continuing in the right di-rection of travel.”

A gamble with phone linesThe importance of remote gaming to Gibraltar has been stated often, and indeed theNew Statesman devoted a supplement to it as a subject in its own right two weeks ago. Itis worth reiterating how it came to be such a key industry. “The first remote gaming licence granted, in the days before the word ‘online’ surfed into our lives, was for Lad-brokes for telephone betting in the 1990s,” explains Picardo. “This was followed by Vic-tor Chandler just after the expiry of the initial period of exclusivity that the then gov-ernment had given to Ladbrokes.” Telephone morphed into online betting, followed bya huge explosion in such services around the world.

It may be seen as ironic, then, that Gibraltar has one of the lowest levels of licensees inthe world. “But they are the blue-chip entities in the worldwide market,” says Picardo.“Therefore the link with Gibraltar starts with the telephone and ends with some of themost resilient broadband available in the world, able to ensure the gambling industry isprovided for in a way that ensures that we do business here that does business with therest of the world.”



Unlike most of the world, Gibraltarhas bucked the economic trend ofthe past five years. Employment isclose to its all-time high, and,while the pace of economic

growth has slowed compared to the firstdecade of the century, this year the Rock’seconomy is forecast to knock out a cracking6 per cent increase. How has it pulled thisoff? By doing what it does best and focusingon niche business.

Gibraltar’s economic resilience has beenborn out of a survival instinct honed byyears of maltreatment. Three centuries ofantagonism from a large temperamentalneighbour has shaped Gibraltarians’ stub-born refusal to succumb to Spain’s inter-mittent campaigns of hectoring and bully-ing. The real economic transformation,though, has taken place in the past 30 yearsor so, when Spain re-opened the frontier asa prerequisite to its joining the EU . With anopen frontier, Gibraltar could once more,after a 16-year blockade, promote itself tothe millions of tourists visiting the Costadel Sol. And today Gibraltar is the singlemost popular tourist attraction for holiday-

makers on the Costa.Tourism was one for the first pillars of the

economy to be developed once the garrisonpacked its bags and left the Rock at the endof the 1980s. Tourists come in droves: eachyear about ten million of them, by car, by airand by sea.

Gibraltar’s position at the western end ofthe Mediterranean makes it an obvious portof call for visiting cruise ships. As well as thetourists, around 100,000 vessels a year pass

through the narrow 14-kilometre-wideStrait of Gibraltar and 10 per cent of themchoose the Rock to pick up the low-sulphurfuel needed to operate in the Europeanports. The advantage which Gibraltar offersvisiting vessels is that they do not need to diverge much from their plotted course.These merchant vessels call at Gibraltar’ssmall but bustling port to pick up fuel

The Rock is open forbusiness

There is bureaucracy butnot as much as you find in

larger territories

by Christian Hernandez, president, Gibraltar Chamber of Commerce

Gibraltar has no natural resources, a negligible localmarket of 30,000 people and imports everything. If it has any resource at all, it is the trading nous of its business community

COMMERCE

(bunkers), supplies and spare parts. Withits international airport a five-minute drivefrom the port, Gibraltar is one of the veryfew ports in the world where crew changesfor merchant ships can happen without avisa. Relief crews are flown out fromHeathrow or Gatwick to pick up the visit-ing vessel and then go on their way.

On land, the Rock’s business commu-nity has been hard at work developing theFinance Centre over the past 25 years. Beingsmall, Gibraltar can be nimble and legisla-tion is drafted in consultation with indus-try practitioners, regulators and the localgovernment. There is bureaucracy but notas much as you find in large jurisdictionslike the City of London, Frankfurt or NewYork. Ready access to the regulator or rele-vant civil servant is one of the benefits ofdoing business in Gibraltar. There are pro-tocols and processes that need to be ad-hered to. And for regulated activities such asfinancial services, the levels of disclosureand capital requirements are no less oner-ous that what one would find in the large fi-nancial capitals of the world. However, aseverything is so much smaller, relation-

8-9 Chamber Commerce:Statesman supplements 15/10/2013 12:30 Page 22


ships are forged more quickly and decisionscan be taken more swiftly. Word of mouthand personal reputation in the small com-munity often count just as much as formalqualifications. Easy personal contact is ahidden benefit of the Rock.

The introduction of the single Europeanpassport for insurance in 1998 enabled locally licensed insurers to offer their services across Europe. This led to signifi-cant growth in the number of insurancecompanies setting up in Gibraltar: licencesgranted have more than tripled in the past decade.

Separately, new legislation was enactedin 2005 in a bid to develop a specific niche inthe funds industry. Further amendmentswere made to update the legislation in 2012and the number of funds has quadrupled injust four years, according to the GIA, the lo-cal industry association.

Gibraltar is home to a growing number ofhedge funds and fund administrators.There has also been an increase in the num-ber of family offices run from Gibraltar. Thebeneficiaries may not live on the Rock allthe time, but the pool of professional ex-

pertise in terms of investment appraisal,fund management, tax and trust advisory ison a par with anything you would find in StJames’s or Georgetown.

It is Gibraltar’s finance sector which hasprobably seen the greatest change. Affectedas it is by legislation created elsewhere, par-ticularly in Brussels, Gibraltar has had con-stantly to adapt in order to compete. De-spite having undergone significant changein the past 15 years, perceptions trail the re-ality. Gibraltar is labelled (still!) as a taxhaven by those who want to follow a morepolitical agenda.

Single tax rateThe dual tax system, where offshore com-panies paid no tax and onshore companiesdid pay tax, ceased to exist at the end of2010. Gibraltar now has a single uniformcorporate tax rate for all companies tradingin the territory. Corporation tax is a com-petitive tax and governments set it at ratethey hope will attract companies on the onehand and also generate sufficient revenue tofulfil their commitments. Gibraltar’s cor-porate tax rate is levied at 10 per cent of prof-

Commerce on the Rock: a small territory, but a big opportunity

its. An added attraction is that Gibraltar isoutside the EU customs union so there is nosales tax (VAT). Neither is there capitalgains tax nor inheritance tax.

While each of these is likely to be attrac-tive both to individuals and to companiesalike, they are unlikely on their own to besufficient for anyone wishing to set up abusiness in Gibraltar.

Staffing can be an issue for start-ups andthe costs of transferring staff from else-where can be high. The online gaming in-dustry certainly found this when it firstcame here 15 years ago. Now the pool of tal-ent with the right experience is fairly stable,but it has taken time to develop.

One of the first contacts most new busi-nesses make is to the local Chamber ofCommerce. It is small but well plugged in tothe business community. Apart from prov-ing local statistical information, they areable to point new businesses in the right di-rection to go, what licence they need, andwhich government department to speak to.Once you are set up they will also lobby onyour behalf and keep you informed of whatis going on. Be sure to get in contact.

8-9 Chamber Commerce:Statesman supplements 15/10/2013 12:30 Page 23


Gibraltar is a self-governing and self-financing parliamentary democracy with-in the European Union. It is located at thesouthernmost tip of the Iberian Peninsula.It covers 6.5 square kilometres and has aland frontier with Spain. Gibraltar is a sep-arate and distinct legal jurisdiction.

The Rock has an extensive and diversi-fied service-based economy. The principalcontributors to its economic base are fi-nancial services, maritime services, e-gaming and tourism. It is forecast to growfrom £1.1bn to £1.65bn between 2011 and2015, and the government of Gibraltar hasmaintained a budget surplus throughoutthe recent economic slowdown that hasaffected much of the developed world.Gibraltar’s EU membership providespassporting rights in banking, investmentservices, insurance, insurance mediationand reinsurance across all 30 EU and Euro-pean Economic Area countries and accessto a market of 500 million people.

Gibraltar offers a competitive low taxrate within the EU. This, together with thefact that there is no tax on dividends, in-terest and royalties, no VAT and no capital

gains tax makes it a very favourable juris-diction in which to do business. It has be-come a catalyst for the development of thewider region.

The Chief Minister of Gibraltar, FabianPicardo, reported in the 2013 Budget thatGibraltar has GDP growth touching 7.8per cent per annum, is ranked in the top20 in global terms of GDP growth and isplaced in the top 10 ranking in terms ofGDP per capita. Financial services

Gibraltar’s insurance industry has ex-panded from just 12 licensed insurers in1993 to 56 licensed insurers writing newbusiness today. In 2011, the total gross pre-mium income that was written by insur-ance companies in Gibraltar was £3.2bn,and these companies held assets worthover £7.5bn. Gibraltar motor insurers cur-rently write 10 per cent of the total UKmotor market.

There are 16 banks and building soci-eties currently licensed in Gibraltar, em-ploying more than 500 people. They rangefrom large global institutions to specialistprivate and investment banks and build-ing societies. They are able to provide a full

Financial state of the nationby the Gibraltar Finance Centre team

Gibraltar’s location and its solid legislation make it wellplaced to be a centre for shipping, financial servicesand other industries. It has become a catalyst for the wider region

ECONOMY

breadth of solutions to their clients’ needsin all areas of banking.

Almost 100 experienced investor fundshave been established in Gibraltar sincethe Financial Services (Experienced In-vestor Funds) Regulations 2005 came intoeffect in August 2005. The governmentintroduced new Financial Services (Expe-rienced Investor Fund) Regulations in2012, which allow large funds to use rep-utable and substantial administratorsbased in jurisdictions of equivalent stand-ing to Gibraltar.

Tax information exchange agreementsIn line with the government of Gibraltar’scommitment to transparency and effec-tive exchange of information, Gibraltarhas to date negotiated and signed 26 tax in-formation exchange agreements withOECD and EU member states. Gibraltar ison the G20-instigated OECD “white list”,and is negotiating or concluding similaragreements with several other countries.

Gibraltar’s Financial Services Commis-sion (FSC) is an independent statutorycorporate body established by Gibraltar’s

10-11 Finance Centre:Statesman supplements 15/10/2013 12:31 Page 22


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parliament. The FSC is responsible for thelicensing and regulation of all financialservices activity in Gibraltar. This includesbanking, insurance, investment servicesand trust and company management. Fur-ther information can be found atwww.fsc.gi. The government of Gibraltartakes regulation and compliance very seri-ously, whether it is complying with all EUdirective obligations, the highest standardsof regulation in financial services or onlinegaming. Gibraltar is one of very few EU ju-risdictions to have no overdue transposi-tions of EU directives, despite Gibraltar’ssize and lesser resources compared withmost other EU jurisdictions. Gibraltar hascommitted to enter the US Foreign Ac-count Tax Compliance Act and to enter intosimilar arrangements with the UK in accor-dance with the same timescale.

Maritime servicesGibraltar forms the eastern shore of a baythat has been of commercial importancefrom mankind’s earliest days. The Phoeni-cians recognised the advantages of its pro-tective geographical features and founded

the colony of Melcarthos on the northshore during the ninth century BC. Ship-ping and port services are significant con-tributors to the economy. Each year,71,000 vessels pass through the Strait ofGibraltar. Today, the shipping industry ac-counts for around 25 per cent of Gibraltar’seconomy. Bunkering, a shipping term forship-to-ship transfer of fuel, remains along-standing and prominent sector.

Gibraltar is the largest bunkering port inthe Mediterranean and one of the largest inthe world, providing over 4.5 million tonsof fuel to vessels each year. The GibraltarShip Registry (GSR) is a member of the Cat-egory I Red Ensign Group of the UK and UKdependency registers. The advantages ofregistering a Gibraltar a ship in Gibraltar aremany, not least fiscal: membership of theRed Ensign Group; the GSR is also an EUMember States’ Register and its vessels areentitled to full EU cabotage privileges. TheGibraltar Yacht Registry is a reliable registerof yachts, independent of the commercialregistrations. Forming part of the GibraltarMaritime Administration, the high-qualityregistry offers a professional, efficient and

Gibraltarian coins: distinct but still British

cost-effective service, and is an ideal choicefor yacht owners who want the confidenceof belonging to a British Register and flyingthe Red Ensign

E-GibraltarThe government of Gibraltar has been de-veloping strategies to create a dynamic set-ting through which businesses can tradeelectronically, supported by a faster andmore reliable framework of communica-tions, infrastructure and legislation in or-der to assist the growth of electronic trade.Since manufacturing, packaging, deliveryand fulfilment, as well as other physicalactivities, can be outsourced to differentcountries, the use of Gibraltar as a soundlocation for e-business activities is by nomeans limited to electronically down-loadable goods, services or transactions.

E-gaming is a vibrant sector of the econ-omy that has helped to bring prosperity toGibraltar. E-gaming accounts for around20 per cent of GDP. Gibraltar is regarded asthe most important jurisdiction in inter-net gaming worldwide, the “Silicon Val-ley” of online gaming and 60 per cent ofthe UK’s remote gaming business takesplace from Gibraltar. E-gaming is tightlyregulated and Gibraltar standards arerecognised worldwide, covering money-laundering, technical and security stan-dards, as well as the controls required toensure player protection. Gibraltar willcontinue a selective approach to licensing,with a high bar to entry.

Tourism and transportEvery year, millions of visitors come toGibraltar by air, land and sea, meaning thattourism accounts for around 30 per cent ofGibraltar’s GDP. Total visitor arrivals inGibraltar reached 12 million in 2011.Gibraltar has been described as having aBritish work ethic with a Mediterraneanlifestyle. The region’s warm and sunny climate has undoubtedly played a majorpart in attracting businesses to the Rock,and the opportunity to pursue outdoorsports such as sailing and golf are com-pelling too. A new airport opened in 2012,with daily flights to an increasing numberof UK destinations.

Gibraltar’s expertise in financial serv-ices, e-gaming and maritime services, to-gether with its Mediterranean lifestyle,make it a very attractive commercialdomicile, and one that is expected to growand prosper over the coming years.

10-11 Finance Centre:Statesman supplements 15/10/2013 12:31 Page 23

12 | NEW STATESMAN | 18-24 FEBRUARY 2013

Since 2010 I have had the privilege

and honour to represent Gibral-tar in the European Parliament inBrussels as part of the SW Eng-land constituency. During that

time I have taken a close and keen interest inits welfare and security. Most recently I wason the Rock for its National Day celebratedannually on 10 September.

It is 300 years since Gibraltar became aBritish colony and it is now a British Over-seas Territory.

It is interesting to note that most of theGibraltarians I have met do not look at the1713 Treaty of Utrecht as their surety, but atlater treaties confirming its relations withthe UK such as the Treaty of Seville in 1729in which the Treaty of Utrecht’s provisionsbanning residence for Muslims and Jewsfrom Gibraltar, mostly traders. This meas-ure was inserted at the insistence of theSpanish authorities and subsequently wasremoved. British Gibraltar has always beenwelcoming and open to business fromwherever it may originate.

Key to Gibraltar’s success has been thestability of parliamentary democracy, run-ning its own internal affairs, which isbacked by Britain internationally. Its legalsystem is based on English law.

The English language dominates and thestandard of education is high. Gibraltar isthus one of the world’s most favoured

places to do business. All this despite being one of the world’s smallest countries,just 6.5 square miles in size with around29,500 people living there, though nodoubt its balmy Mediterranean climate has helped.

The Gibraltarian people have shownsteadfastness, courage and determinationto run their own affairs as they see fit. Theyhave demonstrated that overwhelmingly atthe ballot box in two referendums. Whereelse in the free world would we find suchhigh turnouts, close to the whole votingpopulation, as well as unanimity?

That determination and certainty of purpose has applied equally to doing busi-ness. GDP per capita is staggeringly high,currently about number 17 in the world, un-employment is minimal, and the govern-ment is running a record budget surplus. Itis very attractive to overseas investors.

At one time, Gibraltar relied heavily onthe British armed forces, especially theRoyal Navy, for its income. Today, that is nolonger the case. Military income has beenlargely replaced with a wide range of busi-

Prosperity fromgoing it alone

GDP per capita isstaggeringly high and the

budget is in surplus

by William Dartmouth MEP

Gibraltar has high employment, a strong economy running a surplus when everyhere else seems to be suffering, and is self-sufficient. The author, a Ukip MEP, would like its neighbours to be more accommodating

EUROPE

ness interests from tourism, to financial series, shipping, telecommunications, e-commerce and e-gaming. This is a self-sufficient 21st-century economy. It is a great credit to the government and peopleof Gibraltar.

Furthermore, Gibraltar provides workfor many Spanish people from just acrossthe border in Cadiz province, which formspart of Andalusia. How tragic, therefore,that the Spanish government is rejectingthe hand that helps to feed it and is snipingat the freedoms, jobs and income Gibraltaroffers. Andalusia, and Cadiz in particular, isone of the most depressed parts of Europewith entrenched unemployment now atabout 35 per cent. That should provide anabundance of workers for Gibraltar’s vi-brant economy.

One of Gibraltar’s proudest boasts is thatthe British territory, alone among the coun-tries of the European Union, is 100 per centcompliant with all relevant laws, includingof course banking and financial trans-parency rules. It is also listed as fully com-pliant by the OECD, ensuring that it is agood, legal and entirely safe place to dobusiness. It is also great fun.

It is more than time that the Spanish gov-ernment saw sense and stopped its trivialsneering at the small British territory in or-der to distract the rest of the world fromSpain’s serious internal problems.

12 UKIP:Statesman supplements 15/10/2013 12:32 Page 4


There was one precise moment,some six million years ago, whensome movement or other of theearth’s crust caused a break in anatural dam that created one of the

planet’s biggest ever cascades, as the At-lantic broke into the basin that was to fill upto become the Mediterranean, just a fewkilometres south from where I’m writingthese lines. The Strait of Gibraltar had be-gun.

For anyone interested in the natural envi-ronment, Gibraltar’s geographical locationis ideal. At the extreme southern end of theIberian Peninsula, mere kilometres from

Africa, overlooking the Herculean Straits,themselves a passageway for migratorywhales and dolphins, turtles and tuna, it is afocus for tens of thousand of migratorybirds of many species.

Its cliffs and hillsides are home to uniquespecies of plants and invertebrates, withmore than 600 species of plants and 700species of beetles so far recorded: an im-pressive expression of biodiversity. This isall to be found in a small area - a peninsula ofjust around seven square kilometres.

While in recent months international at-tention has been focused mainly on Gibral-tar’s relationship with Spain, ironically,

Working with thefauna, flora andgeology on the Rock

by John Cortes MP

Gibraltar, with its fascinating, ancient past, is moving towards a strong and confident future

BUSINESS & ECOLOGY

some allege, rekindled by the laying of an artificial reef intended precisely to improvebiodiversity, what may have gone relativelyunnoticed is the commitment that HerMajesty’s Government of Gibraltar has notonly to protect and enhance the natural environment, but to take a leading role inwider environmental issues and work to-wards a green economy and a carbon-neutral community.

This was one of the key commitments ofthe Gibraltar Socialist Labour Party/Liberal Alliance that came to power just under two years ago after close on 16 yearsin opposition. tA

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13-15 Plants John Cortes:Statesman supplements 15/10/2013 12:33 Page 4


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So strong is this “green” commitment,that it went beyond our shores and at-tracted the attention of America’s formervice-president, Al Gore. He joined togetherwith one of Barack Obama’s environmentalteam and 2012 campaign managers, JuanVerde, and both became key speakers in amajor environmental conference and tradefair held in Gibraltar less than a year afterthe current government came into office.

One of the biggest challenges, aside fromthe restoration of marine habitats, overex-ploited and damaged in the recent past, isthe replacing of three aged diesel powerplants with state-of-the-art alternatives in-cluding renewable energy sources. Renew-able technologies are welcome in Gibraltar,and the government is currently engagingwith established and new providers and facilitating the opportunity of developingthese on the Rock.

Gibraltar is changing. It has taken off on ahuge leap from what some would describeas a 1980s time-warp into the seconddecade of the 21st century. The governmentis putting the management of waste andsewage plants out to tender, with environ-

mental considerations and non-pollutingtechnology being the top criteria for selection; recycling is being increased(would you believe cardboard and plasticcould not be recycled in Gibraltar until thepresent government introduced it in De-

cember 2012?); the government fleet of vehicles, including public transport, is be-ing replaced with hybrid and electric tech-nology; and there are financial incentives to import “green” products.

The government has introduced a greenprocurement policy, which follows EUGreen Public Procurement policy, withweighting in the tender process being in-creased for environmental performance;The plan includes LEDs and solar-poweredlights replacing other lighting devices inpublic areas, with financial incentives byway of soft loans to private estates to intro-

duce these. Solar thermal installations arebeing placed in public buildings, includinghospitals, and photovoltaic arrays to allowsolar power rather than the more carbon-negative alternatives are in the planningstages – on rooftops and other built-up sites– in order to protect green areas.

Land is a commodity in short supply inGibraltar, but amazingly, development andthe environment are progressing hand inhand, not least thanks to the new, open andpublic planning process. This has resultedin new housing, car parking, luxury flats,sewage treatment and waste disposalworks, and a power station, progressing atthe same time as an expansion of protectednatural areas, growth of beaches, enhancedvisitor facilities in the Upper Rock NatureReserve, and a new, wooded city park withfountains and bandstand adjacent to thetown centre. And Gibraltar’s social needsare being met – a new hospital ward wasplanned and opened within three monthsof the election, and new homes and a daycentre for dementia and the frail elderly areunder construction.

In addition, government support for

The black kite: regularly migrates over the Rock to winter in North Africa

BUSINESS & ECOLOGY

Our ecological commitmentattracted the attention

of Al Gore

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conservation and research into natural his-tory and heritage are taking Gibraltar to theforefront of many academic disciplines.The famous Barbary macaques, apart frombeing a major tourist attraction, form part ofan ecological research project which isamong the most extensive on non-humanprimates. Spectacular bird migration too,attracts researchers as well as tourists. Ar-chaeology and palaeontological research areregularly presenting new discoveries on thehuman history and notably on the ecologyof the Neanderthals.

Monitoring in caves is providing new in-formation on the history of the earth’s cli-mate and on ancient landscapes. And thegovernment in Gibraltar is supporting the2015 United Kingdom bid for designationof the Gorham’s Cave complex, carved intothe sea cliffs on the secluded south-easterncoast of the Rock, as a Unesco World Her-itage Site. Interest from universities, museums and other academic institutionsaround the world is significant, and is being encouraged.

On the legislative side, all current Euro-pean directives have been transposed into

Gibraltar law – another achievement of thepresent administration – and this of courseincludes all the environmental ones. In ad-dition, the use of ISO14001 and Eco-Man-agement and Audit Scheme standards arebeing encouraged, and increasingly the

public sector is requiring these types ofqualifications in the tender process. Theseall provide a number of important safe-guards, by ensuring good environmentalquality for residents and visitors and ensur-ing the highest standards from businesses,in matters environmental – as well as inmatters financial.

Much of the Gibraltar government’s en-vironmental programme is set out in a brief,but punchy and comprehensive Environ-mental Action and Management Plan. Thissets clear targets and commits the govern-ment to engage with the private sector

through the Gibraltar Federation of SmallBusinesses and the Chamber of Commerce.The idea is to encourage them to showcasetheir application of green practices andproducts, and provide for the establish-ment of a green business network, andgreen business certification, standards andawards.

Gibraltar is vibrant in its environmentalsurge, and ready to welcome investors including those who either bring greentechnology, green services, or have soundgreen credentials.

The Rock has a status and an image thatfar exceeds what one might expect from itsphysical size, though not from its imposinggeology. Coupled with a hugely pleasantenvironment, a diversity of activity – inwhich solid academic standing meets considerable commercial success – and with aunique history and a social resilience thathave seen it survive sieges in four successivecenturies, the jurisdiction looks to the future with confidence and with growingregional importance. As it has been sinceprehistory, it is the perfect setting – for somany things

Gibraltar will establishgreen awards for

businesses

A greater flamingo flies towards the Rock

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“My Government and the British people stand with you.

Our relationship is solid and sure.”Rt. Hon David Cameron MP, Gibraltar Day address, 2013

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