There are many reasons that you may want to consider setting up an offshore company. In many cases, setting up an offshore company allows a business to legally avoid paying exorbitant corporate tax rates that can be higher than 25%, and legally avoid providing financial information for shareholders and directors. Businesses complete less paperwork when operating in Gibraltar. Most businesses find they can operate at a lower cost requiring them to have less available capital. For these reasons and many others, Gibraltar can be the perfect location to create an offshore company.
Tax Advantages
Business people who set up offshore companies in Gibraltar do not pay capital gains tax. This can be a huge advantage because they do not pay as much tax on investments. They also pay no capital gains tax on real property, like buildings, mines, private roads, and machinery.
Coupled with the fact that these businesses also do not have to pay European Harmonisation taxes, including Value-Added Taxes (VAT), often allows companies to be more competitive in the marketplace by passing savings on to their customers.
Furthermore, setting up a company in Gibraltar often lowers the amount of corporation tax that must be paid. If the money is earned in Gibraltar, then the business may have to pay 10% on that money. Money, however, that is not earned in Gibraltar is not subject to this tax.
Some people can become very depressed when they work all day and then have to pay high personal income taxes. If you live in the United Kingdom that rate can be up to 45%, which is one of the highest tax brackets in the world. Setting up a company in Gibraltar allows an individual to lower that amount by 20% in most cases. Furthermore, most individuals are assessed personal income taxes on the first £80,000 of their income, which leads to large savings for many individuals who are amassing a large fortune.
The reason why many people work from early in the morning until long after sunset is to amass wealth they can pass on to their families. The great news for these individuals is that setting up an offshore company in Gibraltar protects the wealth from estate duty that can be as high as 40%.
Why Set Up a Company in Gibraltar?
Some tax benefits may be available in other countries as well, so business owners often ask why they should set up a company in Gibraltar. One answer is that businesses in Gibraltar face no more regulatory requirements when conducting banking, insurance, and investment activities, since Gibraltar is a member of the European Union and the European Economic Area. Gibraltar has an extremely stable economy whose residents support the government’s non-colonial relationship with the United Kingdom. Businesses benefit from the stability of the country, which has led the country to be placed on the Organisation for Economic Co-operation and Development’s white list. The country is recognised by the International Monetary Fund and the Financial Action Task Force on Money Laundering.