Oil and Gas People Exclusive: We find out what a Gibraltar Company is and why you should consider using one when contracting overseas
For years high-earning, ex-pat, offshore workers in the oil and gas industry have been contracting and invoicing through a tax efficient Gibraltar company. Oil and Gas People speaks to Octopus International Business Services Ltd to find out more.
Oil and Gas People: Hi, first things first, why Gibraltar for Oil and Gas Consultants?
Octopus: Gibraltar has very close ties to the UK, as a British Overseas territory, which makes Gibraltar a very strong and reputable place to set up a business.
Gibraltar has a large economy for such a small place, with its GDP per capita sitting at approximately $92,800 according to 2016 records. This figure also showed a 9.1% rise from previous figures, making it a prosperous economy where financial services and gaming sectors in particular are thriving.
Oil and Gas People: So for a prosperous economy, what are the VAT and Corporation tax rates in Gibraltar?
Octopus: Firstly, Gibraltar is not in the VAT Customs Area, therefore we do not have VAT in Gibraltar. That said, some businesses who wish to operate within the Customs Area have been known to voluntarily register their Gibraltar company with the VAT office in the EU country they wish to operate within. We have specialist advisers who can help with this, but most clients do not need or wish to register, so effectively there is no VAT.
As for corporation tax, most companies incorporated in Gibraltar, have one of the following corporate tax liabilities:
- -0% for companies which are incorporated in Gibraltar, but not physically trading, accruing income, or operating in Gibraltar. We used to refer to this type of company as “non-resident”.
- -Or alternatively a liability of 10% corporation tax of profits, payable annually for companies trading, accruing income or operating in Gibraltar. Known as “resident” companies.
So, the combination of no VAT and no or low corporation tax, plus ease of incorporation makes Gibraltar a very appealing place to set up a business.
Oil and Gas People: That sounds good, what other benefits are there?
Octopus:Unlike many jurisdictions, there is often no obligation to ‘pay up’ the Share capital of a Gibraltar Limited company when opening, or indeed during its lifetime. Meaning it is often cheaper and easier to open a Gibraltar company in comparison to many other parts of the world. This is favourable, mainly to services/consulting companies, who do not need or intend to input large amounts of capital into their start-up. Ideal for customers in the Oil and Gas industry.
Oil and Gas People: Which would appeal to many I’m sure! Would an individual have to travel to Gibraltar to get this all set up?
Octopus: No in a word. In most situations, there is no need to visit Gibraltar to be able to set up a company here. Our standard set up processes allow for individuals who are not based in or around Gibraltar and anticipate that most people would prefer not to travel. Our on-boarding processes are designed and developed to be able to carry out the standard company set up via email, telephone and occasionally skype video call if necessary, although clients are always very welcome to visit our offices if they wish.
The coffee is free!
Oil and Gas People: Fantastic! What about timescales, would it take quite a while to get everything set up?
Octopus: Actually, a standard incorporation in Gibraltar takes 3-5 working days. However, if you are looking to get things moving quickly, there is an option to submit an ‘urgent incorporation’ to the registry, which means the original certificate of incorporation is received within 24 hours of submission.Alternatively, if you are rushing to sign a new contract, we can offer you a recently formed non-trade company ‘off the shelf’, to speed up the process.
Clearly there is more to the setting up of a company than this, but the expedited services do often lead to much shorter timeframes where needed.
Oil and Gas People: That’s quick considering it is a different country!
Octopus: Yes but remember, Gibraltar, despite its location being physically tied to Spain, is an English territory and English-speaking country. This means that almost all business, authorities and official communication is done in English. It also means that company documents, legalisations and certifications are issued in English as standard, so translation fees may not be as high as some other jurisdictions.
Again, this can also make the set-up and maintenance of your company much easier, and more comfortable, as you are not relying on interpreters or translations, and can always pick up the phone and speak to an English speaker. Although Gibraltar is autonomous in terms of laws and regulations, they are often very similar to or based on UK laws. This usually makes it easier to find general information and guidance online, as well as being able to seek guidance on specific laws from Gibraltar / UK lawyers easily.
This can make many people feel more comfortable in setting up Gibraltar companies, as it is much more familiar to UK based individuals in particular, than many other jurisdictions.
Oil and Gas People: …and we have to ask, what about Brexit? Could this potentially affect Gibraltar companies?
Octopus:Despite not being in the customs union; with its close ties to the UK and physical border with Spain, Gibraltar is uniquely placed to profit from the many benefits of being in, and trading within the EU, while not always being impacted by some negatives which may be associated with the European Union.
Many people are seeing this as a positive with the potential disruption of Brexit, as it may not impact Gibraltar companies trading within Europe as much as some other localities. Authorities in Gibraltar are confident that Gibraltar will remain a bridge between businesses in the UK and the EU.
Oil and Gas People: So, it sounds like this might be of interest to our high earning offshore workers. So you and the team at Octopus can help people get set up with a Gibraltar Company, but then what?
Octopus: As a licensed Financial Services company, Octopus International Business Services Ltd can provide a wide range of services for your Gibraltar company, making it very simply to set up and maintain your own Limited company, through which you can carry out your engineering and consultancy work.
With services including incorporating the company, and assisting with opening a bank account, Octopus can assist you from the very beginning in the setting up and maintaining your Gibraltar company each year.
Oil and Gas People: That’s great, thank you so much for sharing this information with us and the Oil and Gas People network. What should someone do if they want to find out more?
Octopus International Business Services Ltd has been licensed as Company Managers by the Gibraltar Financial Services Commission since 2005 under number FSC0827B.