Gibraltar Budget 2012 - Gibraltar International Finance Magazine

p10 QROPS p16 FundsAug/Sept/Oct 2012GIBRALTARINTERNATIONALF I N A N C E I N V E S T M E N T B U S I N E S Sl lGibraltarBudget 2012www.gibraltarinternational.com

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Aug/Sept/Oct 2012Volume 18/ Number 3ContentsBUDGET REPORTp6Not allowing ‘external forces’ to stifle economicgrowthBUDGETGibraltar budget 2012PENSIONS‘High moral ground’ sought for GibraltarQROPS rebirthp8p10BUSINESSp12Looking to the future:Why creating a business plan is good for businesseGamingPoint of Consumption TaxFUNDSGibraltar equipped to assist as Swiss fundlaws are tightenedGAMINGMore companies moving in despite UKgaming tax planBUSINESS ROUND UPBUDGET EXTRADTAs among moves to attract businessGIBRALTAR INTERNATIONAL MAGAZINEPublished by GibraltarInternational Publications Ltd.G7 Cornwall's CentrePMB 104PO Box 561GibraltarEditorial enquirieseditor@gibraltarinternational.comAdvertising enquiriessales@gibraltarinternational.comDesignbilgoker@gmail.comUK Agent:Tel: + 44 (0)1993 703560p14p16p26p28p30No part of this publication may bereproduced without the writtenpermission of the publishers.The publishers have tried toensure that all information isaccurate, but emphasise that theycannot accept responsibility forany errors or omissions. Thepublishers accept no responsibilityfor statements made bycontributors or for any claimmade in an advertisement.© 2012 Gibraltar InternationalPublications Ltd.EDITORIAL COMMENTAre ‘big ideas’ needed?Fabian Picardo’s first go at setting out his economic stallas Gibraltar’s Chief Minister, did not disappoint, butneither did it excite. The now commonplace warning ofoutside financial effects on the jurisdiction’s economy,particularly from a troubled Euroland, was there in his Budgetspeech, and he provided pointers that justify caution.Corporation Tax, a main source of revenue, may not holdup – there are early signs of weakening in this revenue stream- and import tax may not see growth, he reported.Finance and Gaming Minister, Gilbert Licudi, pointed to“a serious economic effect” on his e-gaming sector (thatcontributes over £45m to the economy), from UK plans for aconsumption tax on bets placed by its residents that will helplocal firms and harm Gibraltar’s.Yet Picardo, determined not to be ‘cowed’ by theseexternal effects, presented a budget “to deliver social justiceand to improve the quality of life of all our citizens [population29,000], whilst making Gibraltar a great place to do businesswith the rest of the world”.And to that end Picardo’s Socialist Liberal government hascut personal taxes, reduced import duties – some eliminatedaltogether – on a range of goods, announced greaterinvestment in people and facilities in the health and socialservices, raised Civil Service pay and minimum wages, whilstimproving prompt rates payment discounts and axing plannedelectricity price rises.Despite a perhaps predictable total disagreement betweengovernment and opposition over the level and calculation ofthe jurisdiction’s gross and net debt levels and interpretation ofrevenue surplus, there’s no denying Gibraltar’s economy seemson a sounder footing than almost all other EU countries.It would be churlish not to recognise that this basis forgoing forward was achieved under the previous government’s16-year tenure, even if some things might have been donedifferently, (examples being, building of the over-sized andcostly new airport terminal and the not building of a vitalpower station to replace three clapped out ones now).Peter Caruana, now Opposition Leader, claims to havecreated an environment to deliver “unprecedented prosperity,stability and progress” for Gibraltar.It is this inheritance that enables the present governmentto move forward and achieve its target 10.5 per cent averageyear-on-year growth in Gross Domestic Product (GDP) until2015. The question is how.After eight months in office, a youthful Fabian Picardohas given retailers some encouragement to stimulate trade –cutting import tax on a range of items that will appeal to crossbordertourists and residents – and business generally.But so far, there is no sign of the ‘big ideas’ that may benecessary to propel the economy forward. BRIC countries –Brazil, Russia, India and China – have been singled out asoffering good potential for Gibraltar’s finance centre. Moreon-line gaming companies – though only few because of toughregulatory and reputational requirements –are being attractedand they do generate good revenue for Gibraltar.Specialist areas such as the funds sector, private clientbusiness, overseas pensions and insurance all have newopportunities from recent and proposed law changes.Only time will tell whether all this is enough. But there isno doubting the enthusiasm with which this new governmentis facing up to the task.Ray Spencer4 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com

BUDGET REPORTNot allowing ‘external forces’to stifle economic growthGibraltar’s government is “on track” to deliver its predicted growth of50 per cent in the economy in the next four years, “despite thecontinuing European and economic recession”The territory’s nominal GrossDomestic Product (GDP)was forecast to have reached£1.14bn by end March 2012, arise of 8.3 per cent in a year forwhich the Socialist LiberalGovernment of Fabian Picardohad responsibility for just fourmonths since winning office.Once the effect of inflationhas been stripped out, theeconomy’s increase to £949m,amounts to 5.1 per cent forReal GDP – the measure usedby most European governments,and much more than forother territories.However, like his predecessor,Chief Minister Picardowarned in his Budget speechin July of external effects forwhich Gibraltar was notinsulated.“A collapse of the Euro, oreven the departure from theEuro of one or more countrieswould have seismic effects wellbeyond any one country or theeurozone”, he noted.Not immuneSterling was not immune to theproblems affecting the Euro:“when Sterling rises against aweaker Euro our exposure toexchange rate variancesbecomes marked”, Picardosaid.What might be good newsfor cross frontier workersexchanging Sterling wages toEuros, was not so good forretailers when goods rose incost for Euro purchasers, hepointed out.But Gibraltar should notbe “cowed” and apart fromreducing both national grossand net debt, he and his ministersannounced a series ofmeasures to assist the economyand improve the population’sfinancial position.Civil servants get a 2.7 percent pay rise this year and thepromise of a slightly larger onein 2013/14. “As the engine forgrowth for Gibraltar and facilitatorsof the private sector, thepublic sector needs to be adequatelyresourced and systemsof work in the public sectorneed to be brought up-to-datefor the benefit of everyone inour community”, the ChiefMinister asserted.Minimum wages rise 5.5per cent (to account for inflationsince last changed 18months ago) to £5.70 ph, pensioners’earned incomebecomes tax exempt (as areGibraltar pensions already),electricity and water chargesare held, and a large proportionof workers effectively will havelower income tax.Import duty cutsThere were cuts also in importduty “to stimulate the retailsector” and “make Gibraltar amore attractive destination forshopping” both for tourists andlocals, rather than use on-lineretailers, Picardo declared.Portable computers, TVs,Hi-fi equipment, DVDs andCDs have no duty (down frombetween 6 and 12 per cent previously),while the duty washalved for mobile ‘phones, perfumesand make-up, clothing,footwear, watches and jewellery.And he warned the governmentwill “be keeping aclose eye on how prices areaffected by these decreases tomonitor whether reductions areNew power station within four yearsA decision on what could be the largest singlecapital expenditure item in Gibraltar’s history –a new power supply to replace three aged,polluting and increasingly unreliable powerstations – is close, but the government will notbe rushed.Frequent power cuts in recent times areseen as potentially damaging to business,particularly the Finance Centre and e-gamingcommunity, which relies on round-the-clockavailability of service.New Chief Minister Fabian Picardo saw a£350m oil-fired power station planned by theprevious administration as too costly and notright for the jurisdiction.In his state-of-the-nation Budget address,he emphasised: “We are taking steps to ensurethe right combination of security of supply,reduction of polluting emissions, noisenuisance and technological future proofing.”A decision, that might involve wastemanagement and renewable energy solutions,is expected shortly and once taken thegovernment “will move very fast and we areaiming for implementation within this term ofoffice”.Pressure from environmental action groupsfor a speedy result was understandable; “butwe must make the right decision, not thefastest decision”, Picardo asserted.The Government’s choice of energysources would reflect its commitment toensure Gibraltar’s carbon and noise pollutionemissions are minimized.being passed on to customersand not pocketed by retailers”.But the duty on cigarettesin Gibraltar – one of the lowest-pricedtobacco locations inEurope - rises by 10p a packet,a move Picardo recognises as“sensitive, but it is the rightthing to do in support of ouragenda to stop smoking inenclosed public places”!However, computer softwarenow has no import duty“to promote Gibraltar as aplace to do high tech business”,nor is there duty on equipmentfor production of sound orvideo recordings in the music,television or cinema industry asa means of promoting “the useof Gibraltar as a jurisdictionfor the creation and ownershipof intellectual property”.And duty on importedyachts, pleasure craft and othersea going vessels has beenremoved for vessels over 18mlength and halved to 6 per centfor smaller ones in movesdesigned “to stimulate the useof Gibraltar by superyachts”.To encourage “responsiblebusiness who pay on time”, thediscount for early payment ofrates by offices, workshops,construction and manufacturingindustries is being doubledto 10 per cent, those forbars and restaurants raised furtherto 40 per cent untilautumn next year, and there isa 50 per cent rates cut for thefirst year trading of start-upbusinesses.Bigger budgetsurplusAn originally estimated budgetsurplus for 2011/12 of £21m isnow expected to be £58mgreater at £79m, but departmentalexpenditure, publicdebt charges and the costof government pensions alsorose, which together reducethe anticipated net surplus to£31m, Picardo reported.Continued on page 186 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com

BUDGETGibraltar budget 2012Despite the current worldwideeconomic problems and the fact thatthis is the first budget for the newGovernment, there were relatively fewsignificant changes announced in thebudget. Neil Rumford, Director, Head ofTax, Baker Tilly (Gibraltar) Ltd, reportsCorporate taxAs expected, there was no change to corporationtax. The standard rate remains at10%, and there were no measures tochange the way in which the tax is applied.There are a number of changes initiated bythe previous government which were notmentioned in the budget speech, althoughwe understand these are still in the pipeline.These include widening the definition ofwhich travelling and entertaining expensesare deductible and updating legislation onthe allocation of expenses between taxableand non-taxable income.The Chief Minister commented thatrevenue from corporate tax had increasedsignificantly, but sounded a note of caution,saying that this needs to be monitored veryclosely. Given the change from the old tothe new system of tax collection, with anelement of catching up in terms ofpayments, this seems sensible.Personal taxThe two alternative systems of personal taxremain, with the system that benefits thetaxpayer being applied.Gross Income Based SystemLittle change was made here; only theintroduction of allowances for mortgageinterest of up to £1,000, and of allowancesof up to £5,000 for certain expenditure onthe frontage of buildings. Under thissystem no taxpayer pays an effective (i.e.overall) rate of tax of more than 25%.Effective tax payable can be shown by wayof example:Total taxable income £17,00040,000From 105,000 to 500,0001,000,000Effective tax rate %12%20%25%19%Income above £1m is taxed at 5%.Allowance Based SystemThe “reduced rate” which applies to thefirst £4,000 of income, has been loweredfrom 17% to 15%. The “low incomeearners’ allowance” of £8,000 has beenincreased to £9,000. To smooth the taximpact of moving from income of £9,000(nil tax payable) to income of between£9,000 and £19,500, tapering relief hasbeen introduced. It is not yet clear howthis differs from the additional allowancesthat already applied to persons with earnedincome of less than £19,500.The following changes were also made:l Mortgage interest relief increased tocover interest on capital of up to £350,000(previously £300,000) on loans for residentialproperty occupied by the taxpayer;l Medical insurance – increased from£1,120 to £1,500 on eligible premiums;l Nursery school allowance – increasedfrom £1,023 to £2,000;l Income from approved occupationalpension schemes are now exempt (previouslythese were zero-rated, so the pensionincome increased the tax rate applied toother income);l The cap on contributions to approvedpersonal pension schemes and retirementannuity contracts has been removed,although the maximum tax relief on suchcontributions remains at the previous level;l A significant increase in tax relief fordisabled individuals.As most taxpayers use the GrossIncome, and not the Allowance Basedsystem, the above changes are of limitedoverall impact.Individuals enjoying special concessionsConcessions available for qualifying HighNet Worth Individuals (Category 2status) and High Executives PossessingSpecialist Skills (HEPPS) remainunchanged.Social insuranceThere was no change to social insurancecontributions; these remain capped at amaximum of £3,023 for employers’ andemployees’ contributions in total.Import dutiesReductions were made to import duties asfollows:Portable computers, softwareand memory cardsPerfumes, beauty products,watches, clothing and footwearTV’s, hi-fi and other electricalaudio or visual equipmentJewellery and mobile phonesDVD’s and CD’sFrom 6%to 0%From 6%to 3%From 6%to 0%From12% to 6%From12% to 0%Import duty on cigarettes wasincreased by approximately 10p perpacket.RatesMore discounts were announced for theearly payment of rates for business – generallyfrom 5% to 10%, a first-year 50%discount for new start-ups, and increaseddiscounts for bars, restaurants and casinosin connection with their co-operation in thesmoking ban in such establishments.Income, expenditureand public debtThe budget surplus for 2011/12 wasreported as being £31m (it would havebeen higher were adjustments in respect ofprevious years excluded).Gross Public Debt is forecast to fallfrom £518m to £450m by 31 March 2013,representing a fall from 46% to 40% as apercentage of estimated GDP for 2011/12.Estimated Net Public Debt was notdisclosed in the budget speech; this is significantlyless than gross debt, due to depositsin the Gibraltar Savings Bank (which areincluded in gross debt) being backed bybank deposits made by Government.The fact that so few fundamentalchanges were made by the newGovernment hopefully indicates that thenew tax system applying in 2011 onwardswill prove to be viable for governmentfinances and continue to attract business toGibraltar.www.bakertillygibraltar.gi8 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com

Photo’s by Jim WattPENSIONS‘High moral ground’ soughtfor Gibraltar QROPS rebirthby Ray SpencerSome Gibraltar trust fund administratorsare linking with counterparties inother jurisdictions – particularlyGuernsey – as a fast track means togain “potentially huge” new business for thefinance centre through attracting expatriatepensions to The Rock.And in a bid to take “the high moralground”, an Approved Code of Practice foradoption in late summer is being developedin conjunction with Gibraltar’s PensionsRegulator who will draw in part on the bestof what is being operated elsewhere, as wellas industry suggestions.For the past three years, the sectorvoluntarily halted acceptance of newpensions when the UK Inland Revenuequeried, amongst other things, Gibraltar’sapplication of Zero Rate tax.The moves follow recent amendmentsto the Gibraltar Tax Act that members ofthe Gibraltar Association of Pensions FundAdministrators (GAPFA) believe will at lastmake it possible to again attract transfers ofQualifying Recognised Overseas PensionsSchemes (QROPS) from the UK.Working partnershipsIn what is described as a ‘win-win’ situation,companies operating Gibraltar’s “fullycompliant” business model can develop newworking partnerships in jurisdictions wherepension schemes have been removedfrom the UK Inland Revenue’s (HMRC)‘recognised’ list.That was the view of Steven Knight,GAPFA chairman, at an industry seminar“QROPS – care, compliance and certainty”attended by more than 80 professionals inlate June.He argued that while large importedGilbert Licudi Marcus Killick Steven Knightpersonal pensions with assets of £500,000+were attractive business prospects forGibraltar’s fund administrators, a diminutionof equity values worldwide meantthe average of transfer values nowwas £180,000, according to the latestindependent research.“To cope with the sub-£200,000market, cost effective solutions are neededand other, more established jurisdictionssuch as Guernsey, (where 300+ pensionschemes were delisted in March fromHMRC’s ‘approved’ list), have contacts andprocessing abilities already in place”, Knightsaid.That could provide Gibraltar’s newfoundQROPS position - where distributionslimited to those over 55 years old, aretaxed at 2.5 per cent when at least 70 percent of the fund remains for future pensionprovision - with new and wider opportunitiesthrough working with others, ratherthan being in competition.As an example, his Castle Trust Grouphas established working relationships withtwo Guernsey-based QROPS providers witha “fully compliant QROPS solution on ahigh volume and economic marginplatform; that means Gibraltar assumes theultimate compliance responsibility, whileGuernsey provides the established backoffice and administration skills andprocedures.“Both jurisdictions gain income andprofitable on-going business”, Knightdeclared, “but Gibraltar providers retainultimate responsibility to ensure compliancewith HMRC rules and practice.”This approach is to cope with anexpected dramatic rise in applications totransfer overseas pensions to the territoryand is in addition to resources existinglocally and being further developed byindividual trust companies.But as Gibraltar International wasgoing to press and Gibraltar moved to builda reputable base for QROPS, Guernseyrevealed its latest plan to re-open forQROPS business by introducing a reported20 per cent tax on distributions to gainHMRC acceptance.Knight assured his seminar audience:“There will be no pension-busting, no noncompliantinvestments permitted as hasoccurred in some other jurisdictions withQROPS.”None of the 10 existing GibraltarQROPS were delisted by HMRC, but thenew Tax Act is retrospective to mid-2006 soany distributions made must pay the tax.Transfers out of pensions schemes can onlybe made to jurisdictions applying rules atleast as strong as those now applying inGibraltar.Financial Services Minister GilbertLicudi, opening the seminar, said it did nottake long from December for the newGovernment “to be persuaded that it wasthe right thing for Gibraltar.“It [the legislation enabling QROPS]clearly made sense for the professionals andfor Gibraltar generally – for the expansionof the industry and creation of jobs, and forthe revenue that will result from tax ondistributions.”International interestLicudi emphasised that it was important tolearn from what other jurisdictions haddone – from Guernsey for example. “Weare certainly excited about the prospects andthe business this signifies and expansion ofthe Finance Centre. We know we are ingood hands, with the expertise and professionalismwithin Gibraltar, and we alsoknow there is a lot of international interest”,he declared.But on whether Gibraltar’s law changeswould now satisfy HMRC, Licudi toldGibraltar International: “There have beendiscussions. We are very confident we havethe right things in place, but it is up to theindustry to get approval for each of theschemes.”GAPFA secretary Chris White, Partnerand Tax specialist at law-firm Hassans, wasContinued on page 2010 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com

BUSINESSLooking to the future:Why creating a business planis good for businessBy Paul Wharton, Head of Intermediariesand Corporates, Barclays (Gibraltar)Writing a business plan isone of the most importanttasks you will undertakewhen starting a business.It’s a dynamic document used to settargets and collate ideas, and can beused to ensure they are realistic andworkable. A good business plan willnot only help promote the business, itwill also act as a tool to attractfunding. Creating a business plan cansometimes be perceived as a difficulttask, but using a checklist to ensure allrequired information is included canmean the process is a relativelystraightforward one.Approaching the taskFirstly, get your ideas down on paper.Remember to be realistic, concise andclear. You will refer to your plan later onto monitor progress.Do your research. For example, whois your target audience and what will theythink of your product? Do you have aname for your business? Remember, thename you choose should reflect the imageyou want to project, as well as beingmemorable and original.If you hire employees, even part-time,it’s vital to familiarise yourself withemployment law and understand how tobuild a motivated and efficient workforce.The purpose of a business plan is tooutline the objective of the business, soinclude the following: What the businesswill do, the products or services it willprovide, your target audience, financialtargets and any potential threats to thebusiness.It’s important that your business planstands out from the crowd, especially ifyou’re hoping to use it to generate thesupport of an investor or lender; it shouldbe easy to read, concise, honest andrealistic. It’s vital to ensure there are nocontradictions. So make sure the figures inyour plan matchthose in yourfinancial forecast, ifthey don’t, the plancould lose credibility.The following headings will helpstructure your business plan:Table of contentsA table of contents lists the main areas ofthe business plan along with pagenumbers. Clarity is vital; a logical, wellstructureddocument is more likely toinspire confidence in potential investors.Executive summaryThe Executive Summary is a briefoverview of the plan and should be nomore than two pages. Being the firstsection the investor will read, it must beengaging and well written.When reading this section, investorswill want to know the answers to thefollowing questions:l What gives your product the edge overthe competition?l What experience do you and/or yourcolleagues have in the area you want towork in which will make the venturesuccessful?l Is your business idea viable and will itbe profitable?l How will investors get their moneyback or get a good return when you sellthe business or buy their shares?You should indicate the amount ofmoney you and your business partnerswill be investing, the amount of additionalfinance required and why. If you can talkabout how the investment will benefit thebusiness, so much the better.Aims and objectivesConsider what investors will want toknow about you and your business whenyou meet, and prepare accordingly.Essentially, they’ll want to know whatmotivates you, so consider how youwould answer these questions:l Why do you want to go into business?l What do you want to achieve?l Will the business supplement yourincome or replace it?Describing your businessWhen it comes to describing a business, Ifind it useful to do a SWOT analysiswhereby you consider the Strengths,Weaknesses, Opportunities and Threats toyour business. Doing this will deepen yourbusiness understanding and highlight areaswhich need addressing. Next, do a PESTanalysis, looking at the Political,Economic, Social and Technologicalaspects of the business. This will help youconsider the bigger picture and generatenew ideas.GibraltarIf you are considering starting a businessin Gibraltar, it is good to know that thejurisdiction offers the following:l Well regulated with a stable andpolitical economic environment whichbenefits from EU membership and accessto the EU financial services market. Italso has a stable currency with low levelsof corporation tax and minimalrestrictions in the movement of capital orrepatriation of dividends which benefitsfrom no VAT or capital gains tax.l An established finance centre boastingsome of Europe’s best professionals in theareas of legal, accountancy, banking andinsurance with a first classcommunications system and aninternational airport.Gibraltar offers all of the above andmuch more, making it an excitingprospect for potential business owners.Remember, the first step on the roadto success for any business is a goodbusiness plan. I wish you all the best inyour business endeavours.Paul Wharton is writing in his own capacityand none of the above is intended to expressthe views or opinions of Barclays Bank PLC.www.barclays.com/wealth12 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com

eGamingPoint of Consumption TaxFollowing the recent publication ofKPMG’s Gibraltar eGaming SummitReport, Archie Watt, eGamingSpecialist at KPMG, looks at a keytopic highlighted at the Summit: theUK Government’s new Point ofConsumption Tax policy and itseffects on the sector.HM Treasury and HM Revenueand Customs’ industryconsultation windowconcerning the UKGovernment’s recently announced Pointof Consumption Tax on the onlinegaming industry closed on 28th June. Asummary of responses is due to be issued,after which draft legislation will beprepared before being exposed totechnical consultation prior to the policybeing implemented on 1st December,2014.At our April eGaming Summit, MariaBrennan, Branch Head of Gambling Taxesat HM Treasury, explained that thereasons for the UK’s proposed regime werethreefold - to promote fairness and a levelplaying field between UK and overseasoperators in terms of duty liability, toimprove the competitiveness of the UK taxsystem, and to ensure that remotegambling makes a fair contribution topublic finances. It is fair to say that it hasbeen met with significant concern fromregulatory authorities, governmentalbodies, operators and satellite industriesalike as to its repercussions. It is on theseissues that are likely to impact upon theoperations of the wider eGaming sector –not just the operators themselves - that Iwould like to focus.Critical partnersOne of the most pressing concerns raisedwas the importance of establishing theextent to which critical partners of theeGaming industry would be subject totaxation under the new regime. eGamingsupply often involves a number of criticalpartners – software providers and affiliates– though associated with the provision ofgambling, may not necessarily directlyprovide the facilities through which a UKcustomer may place a bet. Broadbandsuppliers for example, or those companiesassociated with data protection, storage ortransferral, could be construed asfacilitating the provision of online - yet towhat extent are they implicated from alegislative standpoint? And to what extent,as is envisaged, are they responsible asthird party suppliers for the conduct ofoperators who refuse to pay tax? Moreimportantly, how might this affect thefuture interactions of these companies withthe eGaming industry and how might this,in turn, affect European domesticeconomies?Mobile gamingAnother concern surrounds the topic ofboth identifying which customers residewithin the UK and non-residents gamblingwithin UK territory who are still subject totaxation. At the Summit, Andy Grimsleyof HMRC explained that the UKGovernment envisages that operators willbe given the responsibility of identifyingwhere in the world their customers wagerand explained that it would be for them todecide how this might best be achieved.However, with the rapid growth of mobilegaming, this represents an increasinglydifficult and very costly undertaking. Overthe past year, the number of bets madeover mobile has more than doubled to 44million, whilst £1billion was wagered overthe course of Euro 2012 alone. Onemethod would be to determine where inthe world the money was coming from butthis would implicate companies such asBarclaycard which facilitate transactionsincluding payment of winnings. Again, theextent to which these acquirers would beliable to taxation will need to be assessed,should they even be willing to offer theirservices in future.Unburdened by the traditionalconstraints of industry, the modernbusiness model for eGaming firms is oneof dispersion to places where potentialassets reside. Contrary to the benefitssuggested above the UK’s arguablyprotectionist principles could serve toencourage further fragmentation of theindustry and its supporting elements tojurisdictions further outside of the UK.This could result in the re-emergence ofunregulated, or worse, black marketschasing the price gap created by theproposed tax and levy charges. Theseoperators may have no intention ofentering into a system in which taxationand regulatory adherence is a concern,ultimately with negative consequences forplayers – which is surely not what the UKGovernment wants.Rapid falloutThe potential for rapid fallout even priorto implementation is, therefore, great andalthough these potential ramifications will,of course, be subject to in-depthconsultation; I would suggest that preemptivemeasures are taken in order toguard against or at least soften the impactof those taken by these industries. Whilst itis true that the proposed measures willimpact with disproportionate severity uponsmaller jurisdictions, like Gibraltar, manyof which have largely been responsible forthe squeezing out of such negativepractices as unregulated online gambling,the imperative to assess the likely impactof the proposed regime spans beyondsingle jurisdictions to a pan-European andincreasingly trans-global level. At KPMG,we are committed to helping those likelyto be affected by these changes, cutthrough the complexity of this increasinglyimportant debate, and are happy tosupport the Gibraltar Government in theirefforts to remove the misconceptions heldby the UK Government in this area andhelp design a taxation regime that is felt tobe fair by all parties concerned.To find out more or to view the KPMGGibraltar eGaming Summit Reportplease visit www.kpmg.com/gi14 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com

FUNDSGibraltar equipped to assist asSwiss fund laws are tightenedPeter Young& Anthony Jimenezreport on behalf of theGibraltar Funds andInvestment Association(GFIA)Gibraltar’s business ties withSwitzerland were celebratedlast year when the GibraltarFinance Centre invited gueststo join members of Gibraltar’scommercial and finance community atspecial “Gibraltar Day” conferences inZurich and Geneva. The guest speakerat both events was the then ChiefMinister of Gibraltar, the Hon. PeterCaruana QC, who, during his speeches,emphasised the benefits and solutionsthat Gibraltar can offer Swissbusinesses. One Gibraltar industrywhich has seen substantial utilisationby the Swiss in recent years isGibraltar’s booming funds sector;Gibraltar’s emergence as a fundsdomicile jurisdiction began in 2005when it unveiled its ExperiencedInvestor Fund (EIF) product. The EIFhas since proved a popular vehicleamongst Swiss managers for itsrobustness and flexibility. This year,Gibraltar’s EIF regime was updated toallow for foreign administration incertain circumstances and expansion ofthe definition of “experiencedinvestors” to include investors whoinvest a minimum of EUR 50,000provided they are professionallyadvised.In February 2012, members of theGibraltar Funds and InvestmentsAssociation (GFIA) attended the Fonds2012 exhibition at Kongresshaus, Zurichfor the second year in succession. Themain topic amongst attendees was theSwiss response to international pressure toamend its Collective Investment SchemesAct (CISA) in light of the evolving globallegislative framework governing funds andfund management. The consultationperiod for the draft CISA (D-CISA) tookplace between July 2011 and October2011 and is currently with the SwissParliament for review. Implementation isplanned for early 2013.Regulation in SwitzerlandSwitzerland, under its CISA, currentlyoperates a “light touch” regulatory systemfor Swiss managers managing non-Swissdomiciled funds. Only managers of Swisscollective investment schemes are currentlysubject to mandatory regulation by theSwiss Financial Market SupervisoryAuthority (FINMA). However, Swissmanagers of foreign collective investmentschemes may, under certain conditions,submit to voluntary supervision by selfregulatoryorganizations (SRO) which arein turn subject to regulation by FINMA.The main role of a SRO is to draftregulations governing the obligationsunder the Swiss anti-money laundering actand to ensure that institutions registeredwith them comply with these obligations.However, changes in how fundmanagers are regulated globally arecausing Switzerland to restructure itscurrent regime and embrace new ruleswith regards the management, safekeepingand distribution of collective investmentschemes. The aim of the D-CISA is tobring the Swiss fund management arena inline with new international regulatorystandards. At the forefront of changes toglobal regulation of fund management isthe introduction the AlternativeInvestment Managers Directive (AIFMD)in Europe. AIFMD, which came into forceon 21st July 2011 and is due to beimplemented by EU member states by July2013, provides that managers ofalternative investment funds (AIFs) will besubject to mandatory regulation, subjectto certain exceptions (such as thoserelating to the value of assets undermanagement). After September 2015under AIFMD, the management of AIFsmay only be delegated to alternativeinvestment fund managers (AIFMs)domiciled in third-party countries, such asSwitzerland, if these AIFMs are subject toregulation equivalent to that underAIFMD. The regulatory authority of thethird-party country responsible for theAIFM must also cooperate with theregulatory authority monitoring the AIF.Under the current provisions of the CISA,Swiss fund managers would most likelynot meet these requirements. If the law inSwitzerland is not amended, Swiss fundmanagers may not be able to managecertain collective investment schemesdomiciled in Europe.Proposed Changes underD-CISAThe D-CISA proposes that all Swiss fundmanagers, regardless of the domicile of thefunds they manage, be subject to licencingand regulation by FINMA. The D-CISAdid not initially offer any opt-out orexclusion provisions for smaller managers,even though AIFMD allows exemptionsfor fund managers managing less thanEUR 500m (for closed ended funds withno leverage) or EUR 100m (for openended funds or those which use leverage).However, due to some resistance on thispoint by the Swiss fund industry, the D-CISA was amended to allow forexemptions in certain circumstances,amongst them a partial exemption ofsmaller fund managers (the definition ofContinued on page 2416 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com

BUDGET REPORTContinued from page 6The extra income in part isthe result of the “unprecedentedlevel of Government’s owncapital expenditure, some ofwhich ends up back inGovernment’s own pocket byway of PAYE, Income Tax andImport Duties”.Company Tax, followingintroduction of a reduced flatrate 10 per cent CorporationTax, accounted for “a furtherlarge increase” in revenue.However, he cautioned:“This increased revenue streamwill need to be monitoredclosely … to see if the level ofsuch revenue during this firstyear of the change is indeedsustainable going forward”.New airport terminal’s spiraling costsFull operation of Gibraltar’s flagship airportterminal is imminent, the cost having spiraledto around €84m, compared with an originallyestimated £24m. The completed building hasbeen in government hands for three months.After several earlier expected launch datesit now seems probable that from August bothoutgoing and in-bound flights will use thebuilding that abuts the border with Spain anddwarfs the old terminal nearby.In early July, Dr Joseph Garcia, thejurisdiction’s deputy Chief Minister, toldParliament that “it was a serious error ofjudgement [by the previous administration] tooperate two terminals at the same time”, whichadded logistical problems and caused evengreater costs.Since taking the terminal over, the newBusiness tax fallingAlready this year’s business taxis anticipated to be downbecause of previous one-offpayments arising from thechange in tax systems – abolitionof Zero Rate Tax – andsome companies overstatingincome.Import duties in 2010/11were higher than expected andas a result “very little growthhas been built into these figuresas it may not be possible tosee even a repeat of thosenumbers, let alone growth”,Picardo suggested.In the current full year ofoffice, the government plans “asignificant increase in spending”on public services, wherethere is a clear need for furtherresources. However, a £17msurplus is still anticipated forthe current year – but almosthalf that of 2011/12.government has negotiated down interim oneyearService Level Agreements with five entitiesthat will cost Gibraltar more than £1m a year.Other contracts still needed to be agreed,and staffing costs added; however, when askedby Gibraltar International, no comparative figurewas available for the cost of operating the oldterminal.Building snagging and integration of ITsystems in the new terminal was in progress,including the check-in system, which wasexpected to be complete by mid-July when stafftraining was taking place, Garcia said in hisBudget speech.Visiting holidaymakers and business peoplehave been bemused by the experience oflanding in the new building and departing viathe small old one.As the Chief Ministerdeclared: “We could be lessprudent and we could takerecurrent [government-owned]company losses off the balancesheet and provide for a highersurplus by borrowing more -but we will not do that. We willnot fall into that trap!”More budget news, p 3018 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com

PENSIONSContinued from page 10said to have “established a good rapportwith HMRC”, but he warned delegates thatGibraltar providers should “not stray out ofthe agreed boundaries”.UK pension schemes, have the greatestinvestment flexibility, and represent a keytarget market, along with Ireland andpossibly also Luxembourg, according toNigel Sloam, who runs his own firm ofActuaries & Consultants with offices in theUK and Monaco.Investment penaltiesFund administrators must ensure individualsdo not receive personal loans from theirpersonal pension pot, he pointed out, norpurchase residential or tangible ‘moveable’property such as works of art, classic cars,fine wine etc., because those would attractup to 70 per cent tax penalties for being‘unauthorised’ investments. Buying gold,however, was OK!As Knight earlier assured, investmentcriteria is being incorporated into the seconddraft Code of Practice, including guidelineson aspects such as full up-front disclosure ofall costs and fees, penalty free transfers outand a disputes procedure.The Code, a blueprint to be reviewedannually and updated to ensure on-goingacceptance by HMRC, will provide“unparalleled best practice for QROPS tothe highest standards of any jurisdiction”,he said. A second version will be completeby end-August.Knight insisted: “Although this mightseem like a “belt ‘n’ braces” arrangement, itdoes give greater certainty for clients andtheir independent financial advisors.”Regulator Marcus Killick, who is chiefexecutive of the Financial ServicesCommission (FSC), admitted: “Pensionssupervision is not currently theCommission’s strongest area”; however,“we are building up an understanding andexpertise”. The FSC was now a Member ofthe International Association of PensionSupervisors, giving standing and access towider experience.And he later emphasised to GibraltarInternational: “We have only one chance toget this right. Gibraltar has adopted a virtuousapproach, by working with HMRC,unlike the experience in some otherjurisdictions.”Through supervision of Trustees,Killick will see if providers are following theGAPFA Code, “because if we have any[people with] QROPS here, those individualshave the same right of protection asanyone else who has their savings, depositor [insurance] policy in Gibraltar”, henoted.His remarks nevertheless, left somemulti-jurisdictional providers uncertain onwhether appropriate regulation and theindustry Code were coming too late.Business race riskKaren Griffin, a director and complianceofficer at Gibraltar trust and companyadministrator ECS International, explainedher concern was that in the race for newQROPS, there is a risk that non-compliantbusiness may be taken on unwittingly.Pentech’s Peter Davis, who providespensions technical and actuarial support forthe Sovereign Group worldwide from basesin the Isle of Man and Guernsey, concurred,suggesting “there is little relevant UKpensions experience in Gibraltar and, as aresult, some complex schemes with inherentContinued on page 2220 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com

PENSIONSContinued from page 20and secure guarantees may be transferredinadvertently in the early stages.”He told Gibraltar International: “As anexample, the Malta Pensions Regulator haswarned that in reviewing their licenses forthis type of business local administratorsOn tax considerations alone, when benefitsare being drawn, Gibraltar is likely tobe more favourable for residents ofSwitzerland, Monaco, Dubai, CaymanIslands and Israel, when compared withmain rival territory, Malta.According to independent UK andMonaco actuary Nigel Sloam, if there wereno double taxation treaties (DTA’s), Maltawould deduct tax at source of up to 35 percent, clearly less favourable than Gibraltar’s2.5 per cent tax rate. And Guernsey is nowthinking of a flat 20 per cent taxation.“In this respect, The Isle of Man's andGuernsey's likely offerings will be taxed atlower rates to Malta - but higher than inGibraltar”, he told Gibraltar International.However, Gibraltar has no DTAs thatcan only outsource some of this responsibilityelsewhere for a maximum of 12months.” Firms would be closely reviewedto ensure that the sole responsibility andactivity was in Malta where responsibilityfor the QROPS was based.Davis admitted the ruling might also beGibraltar tax card is a winnermight benefit UK citizens.Sloam said: “We will not recommendGibraltar as being best in all cases - butequally Malta and The Isle of Man - orGuernsey if it re-enters the QROPS arena -would not be the most appropriate for allsituations.”Gibraltar Pensions Regulator, MarcusKillick warned: “The issue of tax is popular.The focus on tax loss – moving fromtax evasion to aggressive tax avoidance – isclearly in the hair sights of the UK andother European governments.“These people know – or think – theycan get the money by clawing it back fromjurisdictions such as ours through certaintypes of avoidance practices. These guyswould like to see blood on the streetsconnected with creating local employmentin Malta, but he remained uneasy thatGibraltar might not gain the same standingunless it also had a similar residentapproach to control and operation of thefull process, which the FSC says it isexploring.– on our streets.”It was important to ensure that thepensions product and service is fiscallycompliant. “This is not the time to get thissort of issue wrong. This is big money forgovernment”, Killick observed.However, tax advantage is not the onlyconsideration when choosing a home forQROPS.“Changing lifestyle, partial retirementand enhanced longevity dictate new patternsof income needs in later life,” Sloampointed out. “The territory chosen forQROPS provision will need to accommodatepension drawings selected to meetthese needs - and also the desire to leaveunutilised pension resources to selectedbeneficiaries. I believe that Gibraltar willhave a ‘best of breed’ offering in thisregard,” he added.22 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com

FUNDSContinued from page 16which is drawn from AIFMD) of collectiveinvestment schemes at the discretion of theFederal Council.Other changes underthe D-CISAAmongst other matters, the D-CISA alsointroduces new requirements relating tosafekeeping for Swiss custodian banks andalso relating to the distribution of fundswithin or from Switzerland. It isunderstood that all distributors of funds inSwitzerland will need to be authorised,which includes distributors of funds to“qualified investors”.How can Gibraltar help?For financial services purposes, Gibraltaris fully within the European Union. Weenvisage two ways in which Gibraltar canassist Swiss fund managers:Firstly, larger Swiss fund managers,who will have to comply with the D-CISAand be regulated by FINMA, will havesignificant regulatory constraints at leastequivalent to those which are currentlyimposed by Markets in FinancialInstruments Directive (MiFID) or will beimposed under AIFMD. However, aMiFID license (or its mutually exclusivecousin, an AIFM license) will bepassportable (on a regulator-to-regulatornotification basis) across EU memberstates unlike the Swiss equivalent. AGibraltar licensee will automatically beable to provide cross border services toAIFs (if an AIFM) or as currently underMiFID, by the simple checking of a box.There are a number of services providersalready in Gibraltar, who are accustomedto providing both the technical servicesand personnel in Gibraltar for Swiss basedmanagers to establish a MiFID licensedmanager in Gibraltar. Gibraltar isparticularly attractive because of the verylow Gibraltar corporate tax rate (10% ofaccounting profit, subject to all the usualdeductions) for business that arephysically based in Gibraltar.Secondly, Gibraltar will be interestingto Swiss fund managers with assets undermanagement at the smaller end of thescale, that are exempt from the newlicencing rules under D-CISA but who alsocannot comply with AIFMD. Theexemption rules in AIFMD should allowthem to manage European funds (whetheras the AIFM or otherwise) provided thefunds they manage have less than EUR100M (or EUR 500M, as the case may be)under management. In the two largestalternative funds jurisdictions,Luxembourg and Ireland, even prior tothe implementation of AIFMD, investmentmanagers based outside those countriesare coming under increasing scrutiny bythe Luxembourg and Irish regulatorswhere it is proposed they manage theLuxembourg or Irish EIF equivalent. TheGibraltar EIF regime simply requires theinvestment manager to be licensed in theplace where it is based. In addition, atpresent there is no requirement to have aGibraltar custodian bank, whereas theLuxembourg and Irish equivalents requirea local custodian. We anticipate that theserules are unlikely to be altered in Gibraltarby the introduction of AIFMD, where theEIF or its manager are not required tocomply with AIFMD, because the value ofassets under management are low enoughto fall within the exemption.www.gfia.gi24 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com

eGamingeGamingMore companies moving indespite UK gaming tax planGibraltar’s gaming community is gambling on being able tochange the UK government’s mind over plans to impose a 15per cent remote gaming consumption tax that would raise£240m for the Treasury in 2015, the first full year of operation,writes Ray Spencer.An industry fighting fund has beenestablished and top Legal Counselretained to consider the value ofseeking a Judicial Review ifthe tax is introduced, butGibraltar’s Minister responsible forGambling, Gilbert Licudi, is hopeful that apolitical solution can be found to what hedescribes as “an entirely misconceivedscheme”.He maintains that “this is a politicalproposal and politicians…are not unknownto change their minds”. Licudi has plans forpolitical lobbying in the UK to begin inautumn when the results are expected of aTreasury consultation process into how thetax will operate.Clive Hawkswood, chief executive ofthe Remote Gambling Association, feels theUK will be “hard to turn around”. Fromspeaking to UK officials and politicians, hetold me “they also do not accept thatGibraltar, as opposed to the companiesbased there, will suffer materially”, becauseto get a licence no company needs to be inthe UK. “This reflects a worryingly simplisticview of the situation and is one thatGibraltar needs to address at governmentallevel”, Hawkswood pointed out.Minister Licudi is firm that “a UKlicensing and regulatory regime that is saidto be protecting UK customers, may haveprecisely the opposite effect by driving thosecustomers to unlicenced and unregulatedoperators based in less reputable jurisdictionswho will have no intention of payingthe proposed UK consumption tax”.A Gibraltar gaming sector insider toldGibraltar International: “Most of the suppliersto the gaming industry are UK or associatedUK firms, and it becomes totally unviableand preposterous to impose this [tax] interms of an EU single market. The UK hasthe strongest interest in remote gamblingwith so many associated businesses involvedwith it, yet its actions seem to want to closeit down.”Bizarre twistIn a bizarre twist, UK citizens betting with aUK licenced operator would pay the tax, butanyone from Africa, Australia, or China, forexample, is exempt.Contrary to UK Treasury assertions, noother European country is operating a placeof consumption tax. But like other EUStates, the UK wants to raise tax fromthe growing remote e-gaming sector bytightening regulation through licences.Companies based in Malta, Isle ofMan, Alderney and Gibraltar account foralmost all remote gaming business in theUK, with The Rock accounting for some 60per cent. However, those four jurisdictionshave only 6 per cent of existing UKe-gaming licences.The UK market is important, but itcould become much less so as other territoriesopen up. Some of Gibraltar’s 23licenced gaming operators gain almost all oftheir business from the UK, while othershave wider interests across Europe (wheregross gaming yield is estimated at €11bn)and elsewhere.Gibraltar-based bwinParty, the world’slargest on-line gaming company, and the888 on-line gaming company, along withWilliam Hill, Britain’s biggest bookmakerwith a significant Gibraltar stake, wereamong 59 operators to be granted Spanishlicences in June after agreeing to pay €70min self-assessed back taxes at the rate of 25percent of gross gaming revenue.Bwin previously secured 4 per cent ofits revenue in Spain and plans to broadenfurther its income base, with expectations ofbreaking into the presently closed USmarket.William Hill bought three firms offeringsports betting on mobile devices in Juneafter gaining a Nevada Gaming Commissionlicence, as a hoped-for prelude to an onlinegaming licence.Branching out in USMinister Licudi, attending an internationalgaming conference in San Francisco andmeetings in Nevada, in May, confirmed“there are a number of Gibraltar operatorsinterested in branching out by seeking alicence”.Two of four new Gibraltar e-gaminglicences being processed are believed to beNevada-based entities, underlining an“unprecedented interest” in establishingoperations on The Rock. Two Las Vegasgaming equipment-testing houses are alsosaid to be interested in Gibraltar.In the meantime the sector calls for“fair and transparent licensing conditionsfor EU operators,” led by Europe’s internalmarket services commissioner MichelBarnier, to warn in July that member countriesmust provide open cross-border accessto their gaming markets.“If blatant infringements persist, I willnot hesitate to propose to my colleagues thatthe appropriate proceedings be taken”,Barnier told the EU parliament in July andhe said on-going cases and complaints are tobe contacted by the Commission andreminded of the applicable rules.There’s broad industry agreement infavour of introducing EU-wide legislation togovern on-line gambling to protect consumersand tackle fraud and money launderingissues, but the European Gaming andBetting Association points to a growingfinancial burden, saying: “In France it costsa firm €8.7m to receive a licence. We can'tduplicate this 27 times.”l Gibraltar Gaming Commission (GGC)requests to discuss and establish with theUK “arrangements for the practical reportingand examination of any suspicious betsconnected with the Olympic Games havenot beensuccessful. But GGC says it still willevaluate and pass on to the UK as necessaryany suspicious betting offers to Gibraltaroperators.

BUSINESSBUSINESS the ambience FSCTo ensure it stays abreast ofviews concerning the directionand implementation ofregulation and supervision,Gibraltar’s Financial ServicesCommission (FSC) haslaunched its second financeservices sector panel.Following the successfulintroduction of an AuditorsPanel in 2010, the FSC hasbrought together directors,managers, depositories,administrators, lawyers andauditors for a Funds Panel in acomprehensive dialoguebetween regulator and industry.FSC chief executiveMarcus Killick expects “thefunds industry in Gibraltar willbe entering a new phase in itsgrowth” following recentregulatory changes in respect ofExperienced Investor Fundsand the upcoming AlternativeInvestment Fund ManagersDirective”.Mauritius.Whilst attending aconference in South Africa,arranged by the Society ofTrust and Estate Practitioners(STEP), which focused ontopics such as, trusts anddivorce, bad trust clauses, andMark Bridge (centre) receives hisprize From Yogesh Gokool (left),Afrasia Bank and Colin Grieve,South African ChiefRepresentative Officertax information exchange andthe future, which werepresented by internationalexperts and practitioners -Mark won the prize –sponsored by Afrasia Bank - ina lucky draw, on the lastevening of the conference.Commenting on theconference and prize, MarkManagement, SecretaryMoe Cohen, Benady Cohen &Co Ltd, TreasurerJoey Garcia, Isolas, Chairmanof Technical CommitteeAdrian Hogg, Grant Thornton,Deputy Chairman of TechnicalCommitteeBenjy Cuby, Finsbury Trust &Corporate Services, Chairmanof the Marketing CommitteeYan Delgado, Hyperion WealthManagement, DeputyChairman of the MarketingCommitteeClark Elder, KPMG, Chairmanof the Training CommitteeCarlos Martins, SG Hambros,Deputy Chairman of theTraining CommitteeJordan Ramagge, Credit Suisse,Executive Committee Member“We have a pivotal yearahead of us in putting thenew Financial Services(Experienced Investor Funds)Regulations 2012 to good use,assisting the Government ofGibraltar in implementing theAlternative Investments FundManagers Directive intoGibraltar legislation andworking with the regulatorand local and internationalpartners.” Lasry commentedFunds Conferencein MonacoThe Minister for Gibraltar’sFinancial Services, GilbertLicudi QC, in June, addresseda funds conference held inMonaco, that was organised bythe Global AlternativeInvestment Management(GAIM). Mr. Licudi spoke onthe re-domiciliation of funds tothe European Union, withparticular emphasis on recentchanges to funds legislation inGibraltar, which will facilitatethe establishment of largefunds and the re-domiciliationto Gibraltar of funds basedoutside of the European Union.He went on to say, “TheGAIM conference is animportant conference for theglobal funds industry.”Also attending theconference was James Tipping,Gibraltar Finance CentreThe Minister for Financial Services, GilbertLicudi (centre) and other representativesfrom Gibraltar, at the Gibraltar standDirector and variousrepresentatives of the Gibraltarfunds industry.KPMG Charity SkydiveMembers of KPMG (Gibraltar)recently took part in a CharitySkydive Event that raised£3,002 for their chosen charity,the Gibraltar DisabilitySociety.The team that tookpart in the jump wereAbby Stolworthy, CherylSchofield, MonikaSamtani and Karl Sene.KPMG Director,Michael Harvey,commented: “I wouldlike to thank everyonewho supported the event andfor the generous donations to atruly worthwhile charity.”BusinessROUND UPWedding! Conference! Banquet!Themed Event! Corporate Evening!Product Launch! Summer Ball!Christmas Party!New Years Extravaganza!Whilst enjoying dinner you will not fail to see ‘TheKhaima’, our brand new Moroccan style marquee andTHE new venue in Gibraltar for company events,weddings, dinners and a host of other uses. We areparticularly proud to have already hosted, to someacclaim, a number of important Gibraltar events thissummer and you too can use this superb venue summeror winter. So, whether it be a summer wedding for 200or a Christmas party venue for your company ororganisation Gibraltar now has a truly unique venue.Ask to see it for yourself or for a full info packe-mail us at Khaima@rockhotel.giRock Hotel, Europa Road, Gibraltar. Tel +350 200 73000The FSC is also taking theviews of trust and companyadministrators and others onthe appropriate degree ofregulation for QualifyingRecognised Overseas Pensions(QROPS).“We must be careful notto kill off the QROPS industryby over-regulation; on theother hand, by having anunder-regulated sector here, wecould deter people wishing touse the jurisdiction,” Killickdeclared.Gibraltar BusinessmanWins Dream Trip atBusiness ConferenceDirector and General Managerof Europa Trust Company Ltd,Mark Bridge, was the luckyprize-winner of a trip tosaid, “the quality of thespeakers and theirpresentations were excellent –the developments in theindustry are fast moving andfar reaching.”The delighted prize-winnerwent on to say, “I was hopingfor the Champaign or iPad, Inever expected this fantasticprize.”GFIAThe Gibraltar Funds &Investments Association (GFIA)is proud to announce, thatfollowing its AGM in June, ithas elected a new ExecutiveCommittee, as follows:James Lasry, HassansInternational Law Firm,ChairmanJoanne Sene, Armor Portfolio28 GIBRALTAR INTERNATIONAL www.gibraltarinternational.comwww.gibraltarinternational.com GIBRALTAR INTERNATIONAL 29

BUDGET EXTRADTAs among moves to attract businessWithin the next nine months, the Gibraltar Government expects toreport progress with negotiation of Double Tax Agreements (DTAs)with “relevant countries”.A DTA working group is studyingthe mechanics to make itpossible, Finance Minister GilbertLicudi told Parliament.At the same time, of20 Tax Information ExchangeAgreements (TIEAs) so far signedwith EU/OECD countries, 18 arein force leaving Gibraltar waitingfor reciprocal notification fromBelgium and South Africa.“It is becoming increasinglyapparent that Gibraltar’s futurein financial services restswith high-end, high-value-addedprivate client business, insurance(captive and retail), investmentmanagement and funds”.According to Licudi, thataccounts for a fifth of Gibraltar’seconomy, “Gibraltar derives itssuccess from the fact that it doesextremely well in a number ofspecialist areas”.With some 90 ExperiencedInvestor Funds - half areProtected Cell Companies - therehas been changes in the law tomake the sector more efficientand expand its appeal by allowinglarge funds to use reputableand substantial administratorsbased in jurisdictions of equivalentstanding to Gibraltar.Having amended rules toattract certain overseas pensionschemes (see QROPS rebirth,p10) and Gibraltar already beinga mainstream player in insurance,Licudi revealed in the parliamentaryBudget debate that legislationwas to be amended to allow“new private client structures,such as purpose trusts, the extensionof the perpetuity period,private trust companies andfoundations”.These were some of the earlyefforts by the government toattract more business to the jurisdictionas a means of helping togrow the economy by an average10.5 per cent a year for each ofthe next four years.He repeated a manifestocommitment “to explore newemerging markets like the BRICcountries (Brazil, Russia, India,and China), which are enjoyingmassive economic growth”.Gibraltar could offer an alternativeentry point into the EU andbroaden its established marketbase of the UK and Switzerland.“Things will not happen bythemselves”, Licudi declared, butgave no details of how or whenany drive for business mightoccur.In the meantime, there was a“serious economic threat” toe-gaming companies from a UKplan to tax bets at source, which“seeks to put UK operators in aposition of distinct advantage tothose operators based in otherjurisdictions like Gibraltar”. (seeMore companies moving in, p26)Internet gaming accounts for20 per cent of Gibraltar’s economyand contributes £18m a yearin Corporation Tax. Licudi, whois also Minister responsible forGambling, demonstrated “theimportance of key incomestreams this sector generates” byrevealing that £10.7m a year wasreceived in remote gaming tax,and £16m in PAYE from the2,245 employed in the sector.Association of Pension Fund Administrators (APFA)Steven Knight, Chairman, Tel: + (350) 200 40466Email: steven.knight@castletrustgroup.comAssociation of Trust & Company Managers (ATCOM)Marc X. Ellul, Chairman, Tel: + (350) 200 70921Email: marc@ellul.giBar CouncilDavid Dumas, Chairman, Tel: + (350) 200 59026 / 79075Email: barcouncil@gibtelecom.net david.dumas@hassans.giGibraltar Association of Compliance Officers (GACO)Ivan Perez, Chairman, Tel: + (350) 200 73520Email: comunications@gaco.giGibraltar Bankers’ Association (GBA)Emma Perez, President, Tel: + (350) 2000 2000Email: emma.perez@sghambros.comGibraltar Betting & Gaming Association (GBGA)Freddie Ballester, Chairman, Tel: + (350) 200 40595Email: freddieb@PartyGaming.comGibraltar Chamber of Commerce (GCC)Nicholas Russo, President, Tel: + (350) 200 78376Email: info@gibraltarchamberofcommerce.comGibraltar Finance Centre Council (GFCC)Kerry Blight, Chairman, Tel: + (350) 2000 4000Email: kerry.blight@credit-suisse.comCONTACTSProfessional Bodies based in GibraltarGibraltar Federation of Small Business (GFSB)Stuart Rodriguez, Chairman, Tel: + (350) 200 47722Email: gfsb@gfsb.giGibraltar Funds & Investments Association (GFIA)Adrian Hogg, Chairman, Tel: + (350) 200 45502Email: adrian.hogg@gi.gt.comGibraltar Insurance Association (GIA)Chris Johnson, Chairman, Tel: + (350) 58452000Email: chairman@gia.giGibraltar Insurance Institute (GII)Derren Vincent, President, Tel: + (350) 200 51801Email: vincentd@willis.comGibraltar Society of Accountants (GSA)Freddie White, President, Tel: + (350) 200 45502Email: freddie.white@gi.gt.comSociety of Trust & Estate Practitioners (STEP)Peter Isola, Chairman, Tel: + (350) 2000 1892Email: peter.isola@isolas.giGibraltar HR ForumRuth Halsall, Chair, Tel: + (350) 200 43865Email: hrforumgib@gmail.com30 GIBRALTAR INTERNATIONAL www.gibraltarinternational.comwww.gibraltarinternational.com GIBRALTAR INTERNATIONAL 31