Gp12 IBudgeBt RAp22 Tax LTAAug/Sept/ORct 2013 INTERNATIONAL

F I N A N C E l I N V E S T M E N T l B U S I N E S S AIFMD A new dawn for the European Alternative Investment Funds Sector

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Aug/Sept/Oct 2013 EDITORIAL COMMENT Volume 19/ Number 3 Confidence Contents faces tests NEWS P6 here is undoubted confidence in Chief Minister Fabian Accelerating growth to bring “on target” economy Picardo and his team at being able to achieve the Airport leads the way in rate of tourism growth Manifesto commitment to grow Gibraltar’s Gross TDomestic Product (GDP) by over 10 per cent a year on FUNDS P10 average in each of their four years term of office to reach £1.65bn AIFMD - a new dawn for the European Alternative by 2014/15. Investment Funds Sector In year one, there was an 8 per cent improvement, leaving growth now averaging 10.5 per cent per annum to be achieved. BUDGET P12 Picardo says this is “despite the many suggestions from some Gibraltar Budget 2013 quarters that this was impossible”. The Chamber of Commerce eGAMING P14 called it a “stellar-like growth”, for example. Undaunted, Picardo Developments in gaming post KPMG Summit boasts the economy is “on target to deliver or exceed the ambitious target we set”. FUNDS P16 It’s somewhat surprising therefore, to find the government’s Auditing of funds ensures investor ‘fair deal’ first full year budget prediction for the current year of near static revenue, Import Duties and taxes – personal and corporate PROPERTY P18 combined – all are expected to be little more than in 2012-13. New office projects in sight to combat “low availability” Overall after a “modest” 5 per cent rise in expenditure, Picardo PENSIONS P19 “conservatively” expects a £17m surplus, sharply down on Growing appeal as a home for retirement schemes 2012-13. So where is the growth to come from? The government BANKING P21 believes its programme of investment in building around 1,000 Building reserves for expanding bank social homes and other commitments such as the planned new power station will be the drivers to enable GDP growth. But TAX P22 since most of that extra income will be in taxes from construction Leading the way on tax to gain “a level playing field” workers and some higher business profits, the Budget clearly doesn’t anticipate those effects working through in the current INVESTMENT P24 year. New countries being targeted for inward investment And there are uncertainties over European and global TERCENTENARY P27 economic fortunes, important since Gibraltar’s economy in large “Determination” marks tercentenary of peace Treaty part rests on a growing finance centre, tourism and on-line gaming, where the UK represents a significant threat to income BUSINESS ROUND UP P28 by proposing to tax bets at source. Only time will tell if Picardo’s confidence is well founded – GIBRALTAR INTERNATIONAL MAGAZINE but the previous administration used extensive construction work on the new airport terminal, for example, to fuel GDP Published by Gibraltar No part of this publication may be growth previously. International Publications Ltd . reproduced without the written The leadership on tax evasion and exchange of information G7 Cornwall's Centre permission of the publishers. is certainly more achievable – indeed it is already part-delivered. PMB 104 The publishers have tried to PO Box 561 ensure that all information is Gibraltar has a draconian approach to tax evasion and money Gibraltar accurate, but emphasise that they laundering, with Zero tolerance, as will be seen by the numerous cannot accept responsibility for bi-lateral, international and Euro-wide measures that have been any errors or omissions. The adopted by the territory or concluded progressively over a period Editorial enquiries publishers accept no responsibility from 2005, but rapidly in the past 18 months under Picardo. [email protected] for statements made by contributors or for any claim However, the true result for these efforts to ensure tax made in an advertisement. evaders have nowhere to hide will be in the additional income to Advertising enquiries [email protected] the Treasury, and other governments in the world stand to be far © 2013 Gibraltar International greater beneficiaries than Gibraltar, even if in the US there are Publications Ltd. Design claims the cost of administration of exchange under FATCA will [email protected] be as great as any extra income gained. Showing that exchange of information works is a necessary UK Agent: means of ‘encouraging’ individuals to ‘fess-up’, so it’s a pity that Tel: + 44 (0)1993 703560 Gibraltar, so far, has been reluctant to give any details of activity, other than a creditable response to the relatively few TIEA requests. All of this however, leaves Spain nowhere to go in its (false) claims that Gibraltar is a conduit or destination of evaded tax money from Spain. There’s one way for the Spanish to find out, of course: put it to the test and seek out tax information. Ray Spencer

4 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com NEWS Accelerating growth to bring “on target” economy £138.5m, Picardo assured in his Gibraltar’s economy is “on target to deliver or exceed the speech, had been kept under tight ambitious target” of £1.65bn by 2015/16 “despite the continued control to end the financial year European and global economic downturn”, Ray Spencer reports largely in line with the original budget. That was the confident prediction year, “directly attributable to a However, an increase of of Chief Minister Fabian Picardo reduction in PAYE collections around £7m over the original when delivering his first complete from a number of different sec - budget was required to meet year budget in June, confounding tors particularly the construction the recurrent costs of four “the many suggestions from some industry” as well as lower self- Government-owned companies, quarters that [achieving 50 per employed receipts. including the new Gibraltar Air cent growth in four years] was However Corporation Tax, Terminal. impossible”. a significant indicator of the Other areas of revenue each He delivered his forecast jurisdiction’s business health, year include housing and com - after saying that early estimates grew 8 per cent in 2012-13 mercial rents and general rates, point to 2012-13 GDP reaching to reach £64.7m. It was an airport departure tax, the Port £1.23bn - a rise of 7.8 per cent. unexpected result that the Chief Authority and tourism sites, for However, Picardo said growth Minister identified as “a signifi - example. would accelerate, in particular as cant increase”, particularly after The important gaming sec - a result of construction of around last year’s caution that “this tor, accounting for an estimated 1,000 affordable houses, and it increased revenue stream will 21.6 per cent of GDP, contributed would “comfortably surpass” his need to be closely monitored” to a total of £48.1m in gaming and promise of £1.65bn GDP at the see if it was sustainable. Gibraltar Income Tax and company tax and PAYE, 6 per end of this government’s first In the years to 2011 - when Corporation Tax for the financial cent above 2011-12. term of office. the Zero Rate Corporation Tax year 2012/13 reached £189.6m, However, gaming’s impor - Picardo acknowledged “yet was available to many compa - marginally above the £189.4m tance to Gibraltar can best be another year of economic prob - seen in the £17.2m (and growing lems throughout the rest of because some companies have Europe and most of the rest of not yet reported) Corporation the world”. National debt had We believe it is better to be prudent in Tax contribution in 2012-13, “spiralled out of control in each our estimate, given the prevailing economic which even at the presently of the countries where we have outlook around the world reduced published level repre - seen such economic tragedy play sents 27 per cent of total business out; reaching 88 per cent of GDP “ taxes. in Spain”, he noted. The recurrent budget surplus By contrast, Gibraltar’s gross nies, and local entities then for the previous financial year of £37.2m for the financial year public debt at £376m fell in paid significantly more than the and is forecast to be” only slightly 2012/13 was a substantial £20m 2012-13 by 27.5 per cent, more present 10 per cent - Gibraltar’s higher at £191m in the current greater than expected and is at an than twice the level predicted, and average income from business year. all-time record. However, all but net debt reduced to £291.3m and profits was only £26m, the Chief £2m of that surplus is being given is anticipated to decline this year Minister pointed out. Duties bring more to Gibraltar Community Care by a further £13.3m. The majority of Gibraltar’s Duties, the single most important Trust in line with the Alliance 18,000 registered companies “are area of government recurrent rev - Parties’ manifesto commitment to Revenue active companies” and some enue, rose 20 per cent to reach make this charity independent of ‘little different’ 4,000 are investment companies, £146m, although no increase is government grants. Revenue totaled some £487.4m – Picardo told the German anticipated in this year. The total In the current year after about £28m more than expected Frankfurter Allgemeine Zeitung income from duties (including taking account of a “modest” 5 – in 2012-13, but is “conserva - newspaper in a May interview. Stamp Duty) and fees, is expected per cent expenditure rise, a tively” budgeted to be little (He also then emphasised: “We to grow #1m to reach £152.5m. much-reduced £17m surplus is different in the current year. have no more mailboxes than any Departmental receipts and - projected. “We believe it is better Income Tax, the government’s other developed country in the fees at £130.6m - the third largest to be prudent in our estimate, second largest revenue area, fell world.”) area for government income - and by 5 per cent to £124.9m last The combined yield from Departmental Expenditure of Continued page 8

6 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com NEWS

Continued from page 6 ic social insurance, water and firmed that there is no means in from tax increases there. electricity costs, extending rates place to measure whether that has Capital spending last year given the prevailing economic discount for new businesses been done. totaled £92m including comple - outlook around the world and and introducing a tax capital To encourage the use of tion of the new airport terminal. the potential effects of the reining allowance scheme for new office Gibraltar by yachts, pleasure craft For the current year £54m has so in of the Quantitative Easing pro - buildings (see page 18, ‘New and other seagoing vessels and for far been earmarked, but work is grammes of the US and UK office projects in sight’). local vessels, import duty on also expected to start on the exchequers”, Picardo explained. Import duty on a range of marine fuel was cut to zero. In territory’s largest capital project, a items has been reduced or elimi - sharp contrast, import duty on new natural gas-fired, duel fuel Civil Service pay rise nated repeating last year’s move diesel rose by a swingeing 42 per power station. It will replace the The surplus will be after award - to stimulate the retail sector, cent to 22p per litre after the gov - three ageing diesel powered ing Civil Servants a 2.9 per cent although having previously said ernment found importers and plants, and the cost is subject to pay rise from August, reducing that the government wanted suppliers profiting from higher tender submissions due by personal tax whilst increasing a to see the cuts passed on to fuel costs as well as reflecting August and therefore as yet, range of allowances, keeping stat - consumers, a spokesman has con - higher prices in Spain resulting uncosted.

are in hot pursuit of new airlines Airport leads the way in and new routes from European destinations”, he said repeating sentiments expressed 12 months rate of tourism growth earlier. It promises to be a busy Summer at Gibraltar Airport with more British Airways last winter scheduled one extra London than 1,800 flights and 300,444 seats available to five UK Heathrow service on Saturdays destinations until the end of October. And for the first time there and Sundays producing 5,202 are seven flight arrivals on Sundays, the most on any single day more passengers on that route compared with 2011, and That hopefully will mean more there’s been a 14 per cent air passengers in 2013 than the growth already in the current record 192,152 arriving last year. year, although the first three BA is maintaining the extra months of this year saw signifi - flights this summer and next cantly fewer people landing than winter, but Costa is arguing in the same period of 2012. for additional capacity from Confidence of air use Heathrow, where he believes growth is reflected in govern - there is still further potential. ment estimates of airport depar - Monarch flights from ture tax income of £1.8m and Manchester – four per week in aircraft landing fees of £585,000 summer - were showing 26 per for the current year, significantly cent growth this year, Costa said more than the forecast outturn and overall for winter there will for last year at £1.6m and be a total of four more services £430,000 respectively. And land frontier arrivals per cent last year. in operation than the same time But the 173 cruise ship calls from Spain were also marginally Air arrivals in Andulucia, in 2012. made last year to Gibraltar down in 2012 at 11.4m people, by contrast, were 6 per cent Gibraltar airport - where Cruise Terminal – 14 fewer but when cross-frontier workers down in 2012, including those service agreements cost £3m a than in 2011 – carried 291,620 are discounted – they fell by airports nearest to The Rock year to run the large new passengers, just 1 per cent down more than 15 per cent – the being Malaga (down 1.8 per terminal that opened fully in on a year earlier, although the number of people crossing the cent) and Jerez (a 13 per cent September 2012 - is also served number of ships this year is border rose by 1 per cent over reduction) and Gibraltar’s air - by easyJet from Gatwick and expected to bounce back to 2011. craft load factor last year at 87.2 Monarch from Luton and 2011 levels to carry more Tourism minister Neil per cent compares favourably Birmingham . passengers – 300,712. Cruise Costa told Parliament in his with the European airline Work is soon to start on Terminal arrival and departure June Budget statement that he average of 80.5 per cent. building covered walkways both taxes in the current year are esti - wanted to build further on air “We are working very hard landslide and airside to help pro - mated to produce £350,000, the routes, they having produced to encourage our existing airline tect passengers from bad weath - same as that for 2012-13, when the largest growth in visitor partners to add new routes from er; some covered stairs from air - it was expected to get £550,000. arrivals to Gibraltar – up 1.7 the UK and other countries and craft are also to be provided.

8 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com FUNDS AIFMD - a new dawn for the European Alternative Investment Funds Secto r Adrian Hogg is a director of the Grant Thornton Gibraltar is fully compliant in respect of EU investment Gibraltar Group of Companies. He is a former business and fund legislation. GFIA Chairman and a specialist in investment The Gibraltar Financial Services business with over a decades experience Commission is AIFMD ready and has published rules and involving various investment business guidance for AIFMD implemen - structures in Gibraltar and the Caribbean tation and the Gibraltar fund’s industry has been gearing up n 22 July 2013 the Directive on AIFMD applies to any now for two years. Alternative Investment Fund legal person appointed by or Gibraltar based investment OManagers (AIFMD) came into on behalf of the AIF whose regular firms that become licensed AIFMs will be force across the EU. AIFMD introduces business is managing one or more AIFs. able to market across the EU. With its harmonised requirements for entities AIFMD applies to non-EU fund man - experienced investor fund regime, involved in the management of agers that (a) manage one or more AIFs Gibraltar has the fastest AIFMD fund alternative investment funds (AIFs) that established in the EU and market to product to market. are managed and/or marketed to investors in the EU; or (b) market one or Although AIFMD implementation professional investors in the EU. more AIFs established outside the EU (a requirements are similar across the AIFMD encompasses all EU AIFs non-EU AIF) to investors in the EU. EU, it is expected that the cost of and their managers (AIFMs) ranging There are exemptions to the scope of implementation may vary from one EU from conventional “trading” funds the AIFMD, the main of which being the jurisdiction to another. Running costs are (trading equity, options, derivatives and de minimus test of a “small” AIF with likely to be lower for Gibraltar based such like) to alternative assets classes aggregate total assets of (a) less than investment management businesses such as real estate and private equity. €100 million (including leverage); or (b) compared to operations based in other AIFMD is wide reaching covering all less than €500 million (unleveraged) and EU jurisdictions which are already seeing possible strategies and legal forms of that does not have redemption rights costs increase as a result of AIFMD AIFMs and AIFs. during a period of five years following implementation. In order to obtain authorisation an the date of initial investment in the AIF. AIFM has to comply with the require - From the point of view of an AIFM they AIFMD passport ments of AIFMD, which range from must consider the de minimus test for all For those that market funds in the EU, capital requirements, calculation of assets AIFs under management (not each AIF in AIFMD provides the quandary of under management, method for calculat - isolation). whether or not to keep the fund in a ing the leverage, delegation of AIFM There are transitional provisions in domicile outside of the EU, re-domicile functions, specific provisions related to respect of AIFMD implementation. Most existing funds to the EU or to create new risk and liquidity management, risk and EU Member States are permitting a one funds in the EU. Re-domiciliation is often liquidity management, the appointment year transitional period for members the method of choice as it should be a of a depositary, transparency require - within the sector to become compliant seamless transition without triggering ments to rules regarding disclosure to with “best efforts” being permitted dur - a taxable event and it allows established investors and reporting to competent ing this transitional period (i.e. until 22 managers to maintain their track authorities. July 2014). record. AIFMD will open up opportunities The fundamental change in the Transitional provisions for those that operate within its alternative funds sector is that funds that With the advent of AIFMD, investment framework. In the fullness of time are marketed in the EU are domiciled in funds in the EU fall into one of the AIFMD should create a period of growth the EU. Such Gibraltar based funds can following two categories; they are either for the EU alternative investment fund benefit from the AIFMD passport which (a) UCITS (Undertakings for Collective sector allowing management and market - is not the case for non-EU funds who are Investment in Transferable Securities) or ing of AIFs across European borders for not able to passport throughout the EU (b) AIFs which can be in or out of scope. the first time. AIFMD should become be until 22 July 2015. With over €2 trillion within this newly the alternative investment fund sector’s We live in interesting times. It is a defined sector, AIFMD is a significant equivalent of the UCITS passport, open - new dawn for the European alternative piece of legislation that affects all ing up a wide marketplace and providing investment funds sector and Gibraltar is Member States as well as additional a badge of quality. compliant, competent and ready for the participants within the EU investment So how will AIFMD affect challenge. industry. Gibraltar? www.grantthornton.gi

10 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com BUDGET

allowances are given for interest on mortgages of up to £350,000 (and even Gibraltar higher for pre 1 July 2008 loans). These allowances are often what determines which system applies to a taxpayer. Budget 2013 Social insurance Social insurance remains capped at a “A relatively uneventful budget”, maximum of £3,023 in total for an commented Neil Rumford , Head of Tax employee’s and employer’s contributions Services at Baker Tilly Gibraltar, “were it per annum. not for the pre-budget announcement that HEPPS & HNWI’s Ecofin (the European Council of Economic Concessions available to High Executives Possessing Specialist Skills and Finance Ministers of the 27 European and High Net Worth Individuals States) had endorsed Gibraltar’s tax (Category 2) are unchanged. system and that the Income Tax Act is Rates deemed compliant by the EU Code of Conduct Group” Adding to the 50% discount for businesses on their 1st year of trading Total taxable income Corporate tax Effective tax rate introduced last year, now there is a 2nd £25,000 The standard tax rate remains at 10%, 17% year discount of 25%. Discounts for £50,000 with no changes announced in the 22% early payment by most other businesses From £105,000 to £500,000 corporate tax system. Although not part 25% of 10% to 20% remain. £1,000,000 of the budget, I should mention the new 19% Class 1A of chargeable income Income above £1m is taxed at 5%. Construction of office introduced as from 1 July 2013. accommodation This is interest income on loans and Allowance based system The budget introduced a new Capital advances between companies, applied in A lowering of the “standard” rate gives Allowance deduction for the construc - respect of loans where the interest from the following: tion of office accommodation in any one company exceeds £100,000 per Gibraltar – 30% of construction costs in Taxable income band Rate applied annum (connected companies being 1st year following completion, with the First £4,000 15% treated as one company for determining remaining 70% over the next 7 years. £4,001 to £16,000 24% (2012/13 – 30%) the threshold). Over £16,000 40% Corporate tax receipts were up 13% Import and excise duties from last year; after some uncertainty Some allowances under this system Changes included: about how much the new tax were increased, including: system would be able to extract from Changes From To corporates, this provides some reassur - Personal allowance £3,000 (was £2,812) ↑ diesel fuel 15.5p/litre 22p/litre Spouse allowance £3,000 (was £2,632) ↑ cigarettes £1.00 £1.10 ance, though the dependence on the per packet per packet Nursery school (per child) £3,000 (was £2,000) finance and egaming sector is clear. ↓ marine fuel various 0% Parent of disabled person £5,000 (was £2,724) ↓ jewellery 6% 4.5% Personal tax Blind person’s allowance £3,000 (was £627) ↓ loose gemstones 12% 0% The two alternative systems remain, the Single parent allowance £3,000 (was £2,632) ↓ sunglasses & mobile phones 6% 3% system that benefits the taxpayer being Medical insurance – up to £2,000 (was £1,500) applied. The Low Income Earners Allowance In addition duty was decreased from Gross income based has increased again to £10,000; persons 12% to nil for sports equipment, items system earning up to this amount pay no tax. for outdoor games, educational items This system has few allowances, but To give budding philanthropists a boost, (including pens, pencils, crayons, stu - lower tax rates. New for 2013/14 are the limit on the Gift Aid scheme was dent’s paints), fishing rods, fish hooks, deductions of up to £5,000 for first-time lifted from £1,000 to £5,000. tackle, binoculars and camera cases. buyers’ expenditure on their new home Allowances relating to the owner - and £1,000 in respect of approved ship of main residential property in Stamp duty pension contributions. Gibraltar remain unchanged. A total of In was announced that the threshold for The system is designed so that no £15,500 of allowances are given in the nil rate of stamp duty has been taxpayer pays more than 25% overall – respect of first-time purchase (£4,000 of increased to £250,000. by way of example: which must be spread over 4 years), also www.bakertillygibraltar.gi

12 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com eGAMING Developments in gaming post KPMG Summit hole in the UK budget which, as By Archie Watt , Head of eGaming, KPMG Adam Craig (Group Director of Isle of Man and Gibraltar Tax, bwin.party) said at our summit, will ultimately end with ow that the dust has settled after free will shall see any of this VAT being levied on wagers. I have the third KPMG eGaming Summit sum. no doubt that this will end in court Nin Gibraltar I thought it an I and other commenta - and it remains to be seen whether or appropriate time to look at the themes tors have long speculated on not the finest legal minds in the land discussed and subsequent developments. the likely date for gaming to can get their heads around the Firstly, regulation. Several of the be licensed and taxed in concepts of player protection, strong speakers at the summit spoke about the the US, and the comparison anti-money laundering procedures, fragmented nature of European regulation with the prohibition era I made shortly after strict controls over player funds and close and that the “nirvana” of regulators talking the passing of UIGEA in 2006 remains scrutiny of individual wagers, all of which to each other to set and accept common valid. Alcohol was illegal at a federal level are already enshrined in the Gibraltar gam - standards was as out of reach in 2013, as it for thirteen years early in the 20th century ing regulations. had been in 2012, 2011, 2010... and processing gaming/gambling financial All this seems to imply that the news Regrettably this has been confirmed transactions has now been illegal (at a around the online gaming sector is negative over the past few months with some quite federal level) for almost seven years. while nothing can be further from the truth. astonishing developments taking place in However individual states have taken it William Hill Online continues to go from the EU. At the time of writing the most upon themselves to make intra-state online strength to strength and Ladbrokes has recent decision from Bulgaria to blacklist gaming legal, with New Jersey being one of signed a joint venture deal with Playtech Gibraltar-licensed operators such as Bet365, the highest profile early movers. which should see it experience the sort of Ladbrokes, Betfair, bwin.party and 888 on growth that WHO has been seeing for the the grounds that they did not have a license Atlantic City casinos past three or four years. Meanwhile, online to offer gaming services in Bulgaria must This is of relevance to operators licensed in bingo operators Tombola and Jackpot Joy rank as one of the least expected Gibraltar because the Atlantic City casinos continue to produce stellar results. developments for many a year. have been forced to “partner up” with online software providers ahead of the Equally committed USA regulations coming into force. With the One of the biggest events since April was of Blacklisting, of course, is not new; indeed 29th June deadline approaching, Trump course Bet365’s results announcement – many of the EU states have gone down this Casino signed with Betfair, Tropicana operating profits up over 50% to almost route at one stage or another. What marks Casino announced a link with Gamesys £180m, wagers hitting £20bn (up 57%) this occasion out, however, is that not only (owner of the Jackpot Joy brand), both of and all of this achieved from a purely online is there no guidance offered on how these sitting alongside 888’s long-standing presence licensed in Gibraltar. This result reputable companies can go about applying deal with Caesar’s and bwin.party’s tie up typifies the changes that have happened to for a licence but also virtually all of the with Boyd Gaming and MGM. the world in less than the past decade and companies named above actively block The jury remains out on what sort of this progress will continue – Minister Licudi Bulgarian nationals from playing on their boost to revenues this will give our committed his department to supporting the sites. Quite what is being achieved here is operators since many of the Atlantic City sector at KPMG’s summit. unclear to me, and I am sure that senior casinos are losing substantial sums of With the recent reshuffle of the Cabinet executives sitting in Europort, Waterport money each year – there are fewer than 10 and the appointment of Minister Albert etc, are scratching their heads, attempting to million people resident in New Jersey - but Isola as the new Minister for Gambling and understand why they should be on a if the legalisation of intra-state gaming Lotteries, I feel sure that he and his blacklist drawn up by a regulator from a presages legalisation at a federal level then colleagues are equally committed to seeing fellow EU member state. the investment being made will look very the sector continue to develop, diversify and Continuing with regulation, the other good value in due course. grow. part of the world that attracted much The KPMG 2013 Gibraltar eGaming discussion was the US. June saw bwin.party Point of Consumption Tax Summit Report, sponsored by Continent 8 agree to pay Kentucky $15m – in the State Finally, I turn to the Point of Consumption Technologies, is now available for review Governor’s words, as recompense for losses Tax issue. Regrettably the UK government or download from the KPMG Gibraltar incurred by Kentuckians, though I doubt appears determined to press on with this website, along with video material from the that any Kentucky resident who played on change to existing legislation. This has as its day. either of the bwin.party sites of their own sole purpose raising tax to fill a massive www.kpmg.com/gi

14 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com FUNDS Auditing of funds ensures investor ‘fair deal’ To ensure good corporate governance and controls case and the auditor plays an important governance role in such cases. As such, the that give investors in funds a fair deal, Jon Tricker, a number one issue considered by auditors is partner at Deloitte Gibraltar, is advocating that funds likely to be the valuation of the fund’s should be regularly audited – even in situations investments”, Tricker suggests. Half of Gibraltar’s 95 or so where there may not be a statutory requirement or it Experienced Investor Funds (EIFs) have is difficult to assess been structured as Protected Cell Companies (PCCs). And since the he territory’s growing stake in the asset valuation, auditors law allowing EIFs was introduced funds sector - having positioned itself are concerned to ensure eight years ago, Gibraltar last year Tas a credible EU alternative to Dublin that investors have not introduced new Regulations that and Luxembourg for the establishment of been, and could not be, allow large funds to use reputable hedge funds – makes professional auditing prejudiced by incorrect and substantial administrators of funds even more desirable as part of net asset values.” based in jurisdictions of equivalent Gibraltar’s reputational advantage. To that end, audi - standing to Gibraltar “Events in Cyprus and the levy placed tors are interested to see The new Regulations also on deposits in Cypriot banks have sparked “evidence that net asset allow funds to re-domicile to fears of similar reactions in other Eurozone values have been sub - Gibraltar yet continue to use their countries requiring a bailout. jected to scrutiny by the existing reputable administrator, Gibraltar’s position outside the Directors, and to ensure representing a significant advan - Eurozone is therefore now a unique selling that the calculations are tage for funds moving to the EU point for the jurisdiction,” Tricker notes, performed consistently along with the implementation of “particularly in terms of the hedge funds in accordance with appropriate policies the Alternative Investment Funds Managers industry, in which Gibraltar’s key and in a framework of good corporate Directive (AFIM), in July. competitors are all in the Eurozone – governance and controls.” As the (then) Minister for Financial Dublin, Malta and Luxembourg.” Audit work has been the engine house Services, Gilbert Licudi, noted in his June “As is the case with any company, the of Deloitte Gibraltar since being established Budget address: “Gibraltar has set itself the statutory audit of an investment fund in 1991 by Joseph “Pepe” Caruana - whose objective of becoming a major player as an requires the auditor to reach an opinion on namesake and first cousin Peter was EU funds domicile and EU centre for hedge whether the annual financial statements of Gibraltar’s Chief Minister for 14 years until funds management operations particularly the fund give a true and fair view of the end-2011 – and Stephen Reyes. with the introduction of the AFIM company’s annual results and year-end Tricker, who with fellow Deloitte Directive.” position (amongst other things)”, says partner Daniel Delgardo and Caruana, are Tricker, who moved to Gibraltar in 2005 responsible for funds work, has specialised Gender gap rather than take up opportunities at the in funds auditing and maintains: “Probably Tricker is one of five Deloitte partners in Madrid or Seville offices. the biggest issue any fund faces lies in the Gibraltar, but Caruana is set on looking to valuation of its assets, particularly where the future and although none yet are female, Year-end differences some or all of the assets are not frequently “we have some aspiring people and I believe “In addition, the fund’s administrator pro - traded (meaning that fair values can not within two years we will have started to duces periodic net asset value calculations, easily be evidenced by the administrator fill the gender gap.” There is a near equal on the basis of which investors subscribe and auditor).” gender spread amongst the firm’s 50 staff. into and redeem out of funds”, he points Deloitte Gibraltar is unusual in that it out. Governance role is a stand-alone part of the network and But Tricker adds: “The year-end net In an ideal world, funds would be subject to regular review by Global head - asset value may well be different to the net structured in ways to ensure that possible quarters in New York on different aspects assets according to the annual financial disputes over valuation are not possible, he of its activity. The local office “has always statements as certain business assets may be states – for example a fund which only at least met the required standard, even valued or treated differently, depending on invests in one real estate development could though it is constantly being ratcheted up”, the policies of the fund. be set up so that investors are allowed in at says Caruana. “Whilst there is no requirement for the the start of the project, but no redemptions Ray Spencer auditor to give an opinion on the periodic are allowed until the project is complete. net asset values, or indeed the year-end net “In practice this is not always the www.deloitte.gi

16 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com PROPERTY PENSIONS Growing appeal as a home terms of their flexibility and tax efficiency”, New office projects in sight the Skandia report notes. “As more and more baby boomers are hitting retirement age and for retirement schemes are looking to move overseas and become to combat “low availability” ibraltar has rocketed ahead in Trust chairman and leader of the growing non-resident for UK tax purposes, the benefits popularity as a safe, compliant Gibraltar Association of Pension Fund offered by QROPS for these clients can be Gjurisdiction for Qualifying Recognised Administrators (GAPFA), predicted in March significant”, it confirms. The Gibraltar World Trade Centre (GWTC) project Overseas Pension Schemes (QROPS), more that there would be “100 transfers a month Boal & Co (Gibraltar), a subsidiary of may soon be resurrected, as one of very few than doubling its share of jurisdiction of from now on.” Skandia says: “Arguably the Boal the UK adviser to international pension planned new buildings to help meet a reported choice in just three months, according to a three jurisdictions named have benefited from schemes for many of the world’s leading survey of advisers in June. the demise of Guernsey as a recognised corporations, launched its Trafalgar Pension severe shortage of office space in the jurisdiction The survey showed that the top three jurisdiction for QROPS, as the tax benefits Scheme in June and became the ninth firm to jurisdictions international advisers preferred offered in Guernsey were previously more tax offer QROPS in the jurisdiction. he £30m GWTC plan by Fairhomes adjacent 4,000m2 Atlantic Suites building for QROPS, were Isle of Man with 32 per advantageous compared to most other The addition of a Gibraltar QROPS Group was to have been completed by (opened in 2010) should also then be cent of the 141 respondents, Gibraltar jurisdictions.” Malta has slipped to third restores the multi-jurisdictional aspect to Boal TDecember 2012 and would have available. However, a total of 42,650m2 of 26 per cent and Malta 22 per cent. place in the last three months. & Co’s QROPS range – it also has one in the provided 16,000m2 of offices over seven offices in five developments are being According to Skandia International, The But there is good news for all three Isle of Man - and “gives advisers the ability to floors on a car park site it owns at Marina planned or already have permission to Rock was favoured by just 11 per cent of jurisdictions; nearly half (48 per cent) of choose from the two most attractive QROPS Bay, adjacent to Ocean Village. But despite build. Artist’s impression of Mid Town’s project advisers in March and even fewer – 3.4 per advisers who recommend the use of QROPS jurisdictions today”, the firm states. superimposed on land it will occupy, with the £30m detailed planning consent being granted, Isola revealed that a new upmarket first block, Rock Tower (right), which may now cent - in June 2012. will increase their use of them over the next Managing Director Gary Boal said building work hasn’t yet started! office project of about 14,000m2, including progress. The survey findings give substance to 12 months and a further 41 per cent are “Several international finance centres had, Fairhomes also gained full planning some warehousing, a data centre and roof reports by STM Group in Gibraltar of “A looking to maintain their current use of over the years, sought to position themselves approval a year ago for a small 280m2 top garden with leisure amenities, on a site Director, told Gibraltar International : “We dramatic increase” in enquiries since the juris - QROPS over the next 12 months. for QROPS business… but we were two-storey office block on vacant land at situated near the North Mole and to be are aware that office space is becoming diction changed its laws last year requiring all “Despite a backdrop of changing impressed by the efforts put into QROPs the main entrance to Ocean Village. called NW1, is expected to be presented for more difficult to find here and we can see payments from imported pension schemes to reporting requirements for QROPS providers, development by the government of As Maggie Mifsud, BFA sales and outline planning approval in August. that Gibraltar’s economy is continuing to be subjected to a low 2.5 per cent tax and introduced as part of the [UK] Finance Bill Gibraltar.” Trafalgar’s external trustee is marketing director, who has been involved Rumours circulating in the jurisdiction grow. lump sum payments to over 55 year olds 2013, advisers continue to recognise the Capital Trustees Ltd, an established Gibraltar with sales and rental of Gibraltar commer - this summer suggest that a developer has limited to 30 per cent. Stephen Knight, Castle significant advantages QROPS can have in regulated fiduciary. cial property for more than 15 years, noted: offered to take over all or part of the Still attractive “There has been low availability of offices giant 38,000m2 MidTown mixed office, “With a substantial investment already here for some time; only small office spaces commercial and residential project that was in Gibraltar at Ocean Village and elsewhere, averaging 50 -150m2 remain, with very few proposed by Commercial Developments the World Trade Centre project remains possibilities of larger office space.” Investments (part of Montagu Group) at an attractive and is still one of our strong With rental rates of £25-30 per m2, estimated cost of £120m. considerations.” leases vary between three and 12 years Detailed planning consent given in But Marr declined to be more specific generally. Older premises may offer one- 2008 remains in force for Rock Tower, the “at this stage”. There is strong speculation year leases. She added: “If anyone is looking first of MidTown’s four blocks – a 13-storey that the time may now be considered right for 4-500m2 of office space it would have 10,000m2 office and car park estimated to for the WTC project to proceed, but been a little easier six or more months ago, cost £30m - on the site of a multi-storey car possibly on a different nearby site and on a but not so now.” park just outside Gibraltar’s city walls. smaller scale. Mifsud pointed out: “The scarcity of In another development, Forty7 on Developers will have been encouraged space for companies wanting to move to Line Wall Road opposite Kings Bastion by the June Budget tax breaks to stimulate Gibraltar or expand here does not help our leisure centre, owned by Boyd Group, (part office building. international efforts to attract enterprises to of Capital & Overseas Holdings), is up for Thirty per cent of construction costs on the jurisdiction.” sale and understood to be under offer after office buildings started on or before Most of the modern office blocks, such outline planning permission for 1,850m2 of end-March 2015 - including preliminary as NatWest House, Leon Place, Waterport offices was recently renewed. planning, design and associated costs, but Place, Regal House and Eurotowers are full. An application to convert a residence excluding land – can be deducted as a All of Ocean Village’s 4,500m2 of offices at 327 Main Street into 800m2 of offices capital allowance in the first year following are occupied with a waiting list for space. received outline planning approval in May. completion of the project, with the remain - Fairhomes, a 20-year old privately- der written down against tax over the Small spaces owned, Gibraltar-based global investment following seven years. Europort - with 16,500m2 of offices in four and development company headed by Greg blocks built in 1992 as part of a Danish Butcher, has assets in the UK, Germany, Reviewing space speculative venture – is expected to have a Singapore and the Netherlands, as well as The Gibraltar Socialist Labour Party minimal 700m2 available in September. on The Rock - where its portfolio and devel - coalition with the Liberal Party (GSLP) Managing Director Lawrence Isola, said a opment projects were valued in mid-2010 at pre-election manifesto headed ‘Adequate new 500m2 office suite with a 100m2 around €192m - plus extensive US interests. private roof terrace at the top of the Ben Marr, Fairhomes’ Financial Continued page 20

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Continued from page 18 undertaken in mid 2009 for clients of Brian Planning for Offices institutions - banks and building societies and Office Space’, noted that “the availability of Francis Associates (BFA), a leading survey - Building reserves whilst two failed to respond, two others said office space needs to be reviewed in order to ing practice, and it found that 99 per cent of 16,000m 2 - World Trade Centre* they did not offer mortgages. “Three said that be able to cope with the increase in business Gibraltar’s then 94,000m2 office space was 14,000m 2 – NW1*** for expanding bank their quota was already full up – and two of 2 that we hope to attract.” either sold or let. 10,000m - MidTown stage 1* eserves of the 211 years old State- During the 2012-13 financial year those said their quotas had been full since 2 In January, after a year in government Fairhomes, instead of progressing with 1,850m - Forty7** owned Gibraltar Savings Bank are reserves grew by over £2.6m and the December 2012”, he asserted. 800m 2 - 327 Main St.** the GSLP said the review was one of 100 GWTC, diverted a large part of its available being built up, in part to counter government expects a further £3.2m will be One was unable to lend on properties in 42,650m 2 - Total new office space R initial pledges that had been achieved. funds and human resources to several US criticism that it has an “unfair advantage” added this year through public savings a particular ex-MoD area “and one offered a * full consent ** outline consent granted or sought However, when Gibraltar International housing and commercial property projects Source: Gibraltar International research over commercial banks, because it is not debenture offers, deposits and Bonds, to bring 50 per cent loan to value only for private asked in March what had been found, the (particularly in Miami) that are now required to have its own capital. an accumulated total of more than £6.6m. customers with £150,000 invested with them government said: “The review of office believed to be at or near completion. To ensure a good financial return, And at the same time, the role of the “The development of the role of the beforehand”, Dr Garcia reported. space is on-going. The situation is being That means the company is again Fairhomes in 2010 wanted advance com - Bank is to be gradually extended to include Savings bank is an important element in the The government took seriously that fact monitored by the Lands Office …” considering what next to do – where it can mitment from prospective occupiers for a personal current accounts, debit cards and support we can provide to the local business that “We appear to have lending institutions When asked about the situation again get the best return for money it invests - and significant part of GWTC, which had been possibly, on-line services, help with home community and the efficiencies we can that do not want to lend.” He added: “It is three months later, no government response is believed not to be largely dependent on designed to include huge 3,000m2 single loans and small business development money. achieve in payments transactions”, Joe not appropriate that banks and building was available. borrowings, having a cash flow income floor plates. When the Bank’s £3m offices were Bossano, the Minister responsible for the societies, whose policy is largely determined The last full-scale review of offices was from sales and rental yields. Ray Spencer opened in January, the government said it Bank, told Parliament in early July. outside Gibraltar, should operate on the basis would begin wider operation by summer, There has been criticism that expanding of quotas given that local circumstances although no statements on this had yet been the role of the Bank puts the operations of which are different to those of Head Office.” But as he points out: “Interim office made by mid-July. other local retail banks and building societies It also emerged in July that the Bank - Innovative gamer solutions for start-up businesses like ours Unlike all other banks in Gibraltar, the “at risk by providing competition and taking through a new associated company, Credit are needed; it’s important to have incubator government institution is not subject to away their customers”. However, Dr Joseph Finance Co Ltd (CFC) - has provided a £30m beats office lottery space that enables young companies to scrutiny by the independent Financial Services Garcia, deputy Chief Minister, told MPs that loan “on very commercial terms” to Sunborn settle and find their feet in a quality space.” Commission, because it is argued all the the sale of Ministry of Defence properties, had (Gibraltar) Limited, secured by way of a Lottoland, offering players remote access to Modelled on a UK company Tipp24, Bank’s activities are guaranteed by the “drawn into sharp focus the difficulty mortgage over the luxury 5-star yacht hotel five of the largest lottery jackpots in the that targets the German lottery and has government, but it still must comply with encountered by a number of prospective that is set to open at Ocean Village in world with a record top prize of US$1.1bn gross Group revenue of €250m, Lottoland numerous EU and international laws includ - purchasers in obtaining mortgages”. September. CFC is said to have received an in May, has become Gibraltar’s newest and is already the second largest international ing anti-money laundering. He said one person saw nine lending investment injection of £303.76m. by far youngest e-gaming company. provider of its type in the world and has Lottoland was formed as a developed innovative products to expand Gibraltar enterprise only in May by the market, because it feels just about all Indian/Cambodian Rahul Das. In June, national lottery web sites with the exception Andrew Chapple, an e-gaming sector of the UK, “look as though they are spam, veteran formerly with William Hill, became scam or simply old-fashioned.” Director responsible for international “National lotteries are a dying product, expansion. mostly now played off-line by over 50 year The granting of the licence – previous - olds. The company’s innovative ‘double Space is a problem - Chapple ly only available to “the best in the world jackpot’ feature saw the chance in May for e-gaming companies” – marks an innova - we were only offered premises with six year players to win a world record top prize of tive diversification “to reflect the changing leases or longer, with a three year break $1.1bn if correctly selecting the US and dynamic nature of the industry”, clause, which was something we simply Powerball numbers, which would have explains Gilbert Licudi,[then] Minister for could not accept being a new company”, made the winner “one of the richest people Gaming, in this case through “the establish - Chapple says. and one of 800 billionaires worldwide.” ment of a company with a business model As an interim solution, the Lottoland “Perhaps, fortunately for us, no-one which runs in parallel to approved team of 10 people set up at a villa in nearby won that prize, but all winnings are backed lotteries.” Spain for two months to sort out licencing by European insurer Emirat of Germany But Lottoland, which offers players and administrative matters before taking up and international reinsurance companies,” from all over the world a legal way of an unexpected offer to share office space on Chapple assures. placing bets on the largest lotteries in Leisure Island with Ocean Village owner, Previous jackpot winners may have Europe and America, such as Euro Millions, Fairhomes, and getting flexible ISP broad - had to share their winnings with up to 300 Euro Jackpot, Mega Millions, Powerball band support from Sapphire Networks. others so Lottoland introduced a ground - and 6outof49 (the German national “We chose Gibraltar because its breaking ‘jackpot insurance’, to guarantee lottery), had great difficulty in finding legislative and tax advantages make it the payment of the full prize amount, regardless available offices with infrastructure solu - best destination we could find for a gaming of how many others have the same tions that might have meant not settling in company, and we are proud that such a numbers. Gibraltar. young company as ours could be supported By the year-end Lottoland aims to add “Finding an office with the possibility by the government and given a licence by between 15 and 30 staff; “we only recruit of fast internet connections proved a the Gambling Commissioner”, Chapple people who are smarter than ourselves”, challenge, not least, because in most cases adds. Chapple says.

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a harmful tax jurisdiction under EU Code of with you – Gibraltar financial services laws Gibraltar had since January transposed Conduct criteria damaging the jurisdiction’s do not permit practitioners to be involved in the EU Directive that provided for tax Leading the way on tax to reputation. But the European Council of the evasion of taxes of other states and we information exchange to a TIEA-equivalent Economic and Finance Ministers of the 27 do not want the proceeds of tax evasion level with all 27 EU Member States, EU Member States (ECOFIN) voted by “a from any country, including Spain, to be including Spain. gain “a level playing field” crushing majority” to endorse Gibraltar’s sheltered either in or through Gibraltar. In addition, Gibraltar had transposed Income Tax Act as being compliant with the “In particular, we do not want to act as Council Directive 2010/24/EU which sets Gibraltar is “ahead of the curve” on global tax Picardo said pointedly. EU Code of Conduct for Business Taxation. the conduit or destination of evaded tax out the formal way in which countries The UK Treasury recognised Gibraltar’s As Picardo told Parliament, this money from Spain”, he adds whilst listing request and provide assistance in obtaining transparency and compliance and is positioning leading role on these issues in May by setting marked “a major milestone in the transfor - the many OECD, EU and bilateral evidence located in one country to assist in itself as leading the way on initiatives and action the jurisdiction apart from other Overseas mation of Gibraltar as a mainstream and tax information measures Gibraltar has criminal investigations or proceedings in plans to ensure “a level playing field” Territories “and specifically recognised our compliant tax jurisdiction”. The EU Code adopted. another country, including tax. repeated commitment to transparency and Group that “has become the yardstick by Picardo’s intervention with Spain – In November 2011 ahead of the G20 hief Minister Fabian Picardo, after our application of relevant EU standards of which harmful tax measures within the EU which, along with some other countries, has Summit, the Financial Stability Board that joining UK Prime Minister David transparency”, he said. and in the overseas territories of the EU Gibraltar on its tax ‘Black List’ – follows a monitors the global financial system put CCameron at No. 10 Downing Street “Gibraltar remains a benchmark juris - Member States are assessed” has “strong Spanish media report that revealed Snr Gibraltar among a top group of “jurisdic - for a meeting of Britain’s overseas territories diction on financial services regulation and political force” even though it is not a Montoro had set up a working group to tions already demonstrating sufficiently and Crown dependencies, proudly the United Kingdom continues to recognise legally binding instrument. “tighten the noose” around Gibraltar’s strong adherence to regulatory and proclaimed: “It is right that Gibraltar’s that”, Picardo told the Gibraltar Society of Days before the ECOFIN news, neck and to suppress the evasion of supervisory standards on co-operation and leadership on these issues be recognised Accountants annual dinner in early June Picardo issued a challenge to the Spanish hundreds of millions of euros of Spanish information exchange”. internationally”. Since February Gibraltar has been able Minister for Hacienda (Tax Authority), Snr taxes to, or through, Gibraltar. As Picardo forcefully told his In a letter to David Cameron just ahead to claim that it had transposed all its EU Cristobal Montoro, to work with the Under the previous governments of Parliament: “Those who persistently try to of June’s meeting, Picardo said: “We have Directive obligations into national law. Government of Gibraltar to ensure that both countries discussions had reached an denigrate us, those who with compulsive nothing to fear and all to gain from “We are compliant in all areas – not just, there is no Spanish tax evasion money in advanced stage to sign a bi-lateral Tax blindness seek to undermine the reputation international initiatives to stamp out tax but particularly, in Financial Services.” Gibraltar as he seemed to think. Information Exchange Agreement (TIEA) and credibility of our country, are fast evasion and we would be very pleased At every opportunity he lists the juris - In a letter to Snr Montoro, the Chief “until they came to a standstill for [Spanish] running out of credible options to do so.” indeed to finally see a level playing field of diction’s regulatory standards, preparedness Minister declares: “Let me be very clear political reasons”. Ray Spencer all other relevant jurisdiction.” for dealing with money laundering, tax His words mask a long standing frus - transparency and investigation, and provid - tration at Gibraltar being regarded by some on Mutual Administrative Assistance in Tax ing assistance and information to other - Spain, in particular - as a non-compliant Matters, which regulates information states. tax haven and place for individuals and exchange between states on tax matters. But it wasn’t until late-June, after the companies to avoid tax and official scrutiny. “Whilst it may therefore be true that Downing Street meeting, that Gibraltar was Gibraltar and UK officials are “at an some other Overseas Territories may not be finally able to hammer home its whiter- advanced stage” in working out how to as keen to have the Convention extended to than-white tax status. extend to The Rock the OECD Convention them, this is not relevant to Gibraltar”, Since 1997 Gibraltar had been listed as

[refused] requests accepted that the detail Auto tax information provided in the request was insufficient.” The majority of the total requests were leaves “no place to hide” from European countries, and now four Within three years, all tax information will be more TIEA information requests are being processed. exchanged between all countries across the world Gibraltar’s first TIEA was signed with automatically, rather than relying on formal requests the United States in March four years ago and “tax evaders then will have no place to hide” and now 20 of the 26 TIEA’s signed so far – including those with the UK, France, hat’s the view of Gibraltar, which is countries since 2009. Germany, Ireland, Portugal and South joining the UK and four other EU “A further three requests – all from one Africa, for example - are in force. Tcountries and the US in developing [unnamed] country - have been refused on “Gibraltar’s procedures for the systems and processes to ensure an the basis of not satisfying the necessary remaining six are all in place and we are acceptable common standard and format requirements of a TIEA,” James Tipping, awaiting confirmation from the six coun - for that tax information. Finance Centre Director said. tries in respect of their procedures so that But in the meantime, Gibraltar Finance TIEA requests must show evidence of they can come into force”, Tipping added. Centre has revealed exclusively to Gibraltar just cause and not simply be an information However, Gibraltar can also respond International that is has so far received and fishing exercise, as may have been the case through its Tax Office to information requests responded to 36 Tax Information Exchange in the refused cases. As Tipping went on to from any EU country under EU Directive Agreement (TIEA) requests from ten explain: “The country that sent the Continued page 25

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Continued from page 22 the OECD to develop rapidly a multilateral But as the other UK Overseas New countries being targeted 2011/16, which the OECD confirmed is model which will make it easier for govern - Territories and Crown dependences agreed equivalent to a TIEA request. However, the ments to find and punish tax evaders”. to draw up action plans on producing a Gibraltar government would not say whether The OECD has called for a fixed set of register of beneficial ownership to enable for inward investment this process has yet been used. standards on IT and reporting require - tax authorities and law enforcement But now Gibraltar is seeking to join the ments, but some countries such as the US, agencies to discover who the real owners of Growing tourism and commercial initiatives with heritage and, as a list-topper, a quality shop - pilot multilateral automatic exchange of tax have States with independent tax laws. companies are, Gibraltar is standing back ping experience”; they were mostly in the information announced recently by the E5 Gibraltar has since the mid-90’s on decisions, including whether the list Israel, China, Russia and Morocco is now a prime “luxury bracket with most tourists having group of countries - UK, France, Germany, ensured financial institutions log beneficial should be publicly available and is objective as part of Gibraltar’s move to boost high levels of disposable income”. Italy, and Spain – although no timetable has ownership of bank accounts and trusts consulting its Finance Centre constituents. international investment beyond traditional markets In the meantime, the Gibraltar Tourist yet been set for implementation. as a result of adopting IMF anti-money Chief Minister Fabian Picardo is Board has identified Germany as a country And by the end of this year, Gibraltar laundering directives on an all-crimes basis. concerned that whatever plan is proposed isits to numerous countries by Spanish border – are now matched with a holding great potential in outbound tourism will be implementing the separate US and Tax Evasion is a crime in Gibraltar and to deliver such registers of ownership it government ministers and tourism similar number of Moroccan tourists. for Gibraltar, as is Russia as a result of the UK Foreign Account Tax Compliance Act carries a maximum sentence of seven years must meet the standard required by the rest Vand finance centre staff in the past Gibraltar amended its Immigration, Asylum Government introducing last year, a visa (FATCA) arrangements. imprisonment. The jurisdiction’s Financial of the world. He is quoted in the media as year have started to produce some results and Refugee Act in early March waiving waiver programme for Russian nationals The US FATCA, being used to prevent Intelligence Unit (FIU) maintains a database saying: “Whether or not the register is made already helping to boost the jurisdiction’s visa requirements for nationals of specified wishing to visit Gibraltar on an organised tax evasion, for example requires foreign of reports of any suspicious transactions public to all and sundry, I think it should economy. countries, including Morocco for tourism, day trip, which by mid-June had attracted banks to annually report to the Inland and any other financial intelligence arising certainly be accessible to the tax authorities However, hopes for investment from leisure or business purposes. more than 3300 Russians. Revenue Service any US account holders from them relating to tax evasion or money of the states with which we have agreements the US have yet to be achieved, despite high- At the end of a June visit to Gibraltar and must impose a 30 per cent tax on laundering and then information is sent for and to the relevant police or other profile visits by the Chief Minister Fabian by Israel’s Ambassador to London, Daniel payments or transfers to account holders action by local or foreign police, financial authorities that may be investigating crimes. Picardo involving President Barrack Obama Taub, having met ministers and business who refuse to co-operate. regulators and foreign FIU's. “I have absolutely no difficulty with and an appointment of a Washington-based leaders, he revealed an interest in develop - A closing G8 leaders’ joint communica - No figures could be obtained from the that. But to elevate the openness to general “representative” to promote Gibraltar. ing commercial links, particularly in tion on tax said the countries were commit - government on the scale of the IFU’s access to the public may be an issue that One outcome has been agreement for Information Technology. ted to “establish the automatic exchange of activity, but it is known that there is “loads requires more careful consideration”, he 60 Gibraltar graduates to be offered a 15 There were “remarkable similarities” information between tax authorities as the of information flowing in and out”, explained. week placement in the public and private between Gibraltar and Israel – “countries new global standard, and will work with according to an insider. Ray Spencer sector organisation in Washington over a that are small, very vibrant countries” - that three year period from August courtesy of had a varied, lively population with entre - The Washington Centre, an independent preneurial communities and, what he called non-profit organisation that aims to turn “challenging relationships with some of our “today’s students into tomorrow’s leaders.” neighbours.” In January, the government reported that one US business had visited and further Online technology synergy business projects, mainly in the area of UK - Israel trade had doubled in the past technology and renewable energy, were decade, he noted and now in Gibraltar “We being mooted. are seeing tremendous co-operation and Minister Neil Costa has affluent Chinese tourists in his sights synergy, particularly in online technology”, Strategic position he said. The fact that the US is establishing a fresh Both Joe Bossano, Minister for One reason for the Ambassador’s visit military infrastructure in Morocco could Enterprise, Training and Employment, and to Gibraltar was “identifying a number of mean Gibraltar’s strategic position in the his colleague Gilbert Licudi (then Minister potential partners with whom we can Mediterranean would generate business for the Finance Centre and Gaming), told deepen our trading and business relations opportunities. Gibraltar International early this year that and Gibraltar is an area that is very “That military infrastructure will need they were looking to quickly establish target interesting to us”. logistical backup, which Gibraltar is logical - areas for new business, primarily from the As the Gibraltar Chamber of ly placed to provide” - not at a military BRICS (Brazil, Russia, India, China and Commerce pointed out in its latest annual level, which was a matter for the US and its South Africa) countries. report: “The quest for greater economic allies, including Britain, but in the sense of After attending in April the key World self-sufficiency is a worthy goal set against supplies, Picardo revealed in early Summer. Travel Market Vision Conference and an economic outlook which remains Morocco had already been identified as China Outbound travel and Tourism uncertain elsewhere.” an important strategic partner and another Market events in Beijing. Neil Costa, The Chamber adds: “Bringing new ‘natural’ emerging market ripe for commer - Minister for Tourism, reported to investment to Gibraltar will be a key test for cial and tourism initiatives for Gibraltar Parliament that “Chinese tourists are the Government, which has set out its beyond the main north African cities of seeking new destinations to explore whilst economic stall by promising stellar-like Cassablanca, Marrakech and Rabat. in Europe” and Gibraltar can be marketed GDP [Gross Domestic Product] growth The 1,000 Moroccan’s working on The as an add-on. rates of 10 per cent or more in each of its Rock – down from a peak of 5,000 in the “Chinese visitors are not looking for four years of office.” early 70’s after General Franco closed the beach destinations but require history, Ray Spencer

24 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com TERCENTENARY

He added: “Gibraltar has transformed “Determination” marks itself into a thriving commercial port, tercentenary of peace Treaty financial centre and service economy with a GDP over £1bn a year. With our shared he 1713 Treaty of Utrecht – the hundred years on Europe commitment to working togeth - document that, among other things is a very different place. er we can build on this progress Tmarks Spain ceding Gibraltar to Britain “The fundamental and look forward to the future in perpetuity – is being widely commemorated democratic right of a peo - with confidence.” on The Rock this year in a series of events that ple to decide their own Over many years, Gibraltar, press home the belief that Gibraltarian’s have future, the right to self- backed by the UK, has the right to decide their own future. determination, is now an sought UN agreement that Against a background of growing stri - overriding principle of Gibraltarians have a right to self- dency by a Spanish government that wants to international law.” determination. In June, Picardo re-establish ‘ownership’ of The Rock, The Treaty helped to challenged the UN to spell out its Dr Joeseph Garcia (left) meets Gibraltar’s Chief Minister, made it clear in a end the War of Spanish Ashley Fox, Conservative MEP for requirements for removal of South West England and Gibraltar, mid-July Cadena Ser TV interview: “That we Succession that involved at the European Parliament. Gibraltar from the list of Non- don’t want to be Spanish doesn’t mean we competing nations, includ - Self-Governing Territories. In a don’t want peaceful relations.” But he also ing Great Britain, France, Spain, Portugal, thinly veiled reference to Spain, Picardo observed: “The Treaty of Utrecht is not rele - Savoy and the Dutch Republic, and Article X, declared: “Those who argue that Utrecht is a vant today. It is a fascist treaty that dates back which refers specifically to Gibraltar, was bar to self-determination should have the to a Europe of cannon and bloodshed.” signed on 13 July 1713. courage of their convictions and test this Dr Joseph Garcia, who is co-ordinating In a message on the Treaty’s anniversary, absurd proposition in the International Court commemorative – “not celebration” – events, British Minister for Europe, David Lidington, of Justice.” This year also marks the 40th underscored the Treaty as “outdated and said: “For over three hundred years the UK anniversary of Gibraltar’s entry into the irrelevant” added: “In 1713 territories and and Gibraltar have shared a proud and lasting European Economic Community (as it then countries were bandied about from one history. We should take pride in the fact that was), so the EU dimension was included in an monarch to another, regardless of the wishes the people of Gibraltar are and wish to remain exhibition at the European Parliament in of the people who lived in them. Three British.” Brussels in June to mark the Utrecht Treaty.

www.gibraltarinternational.com GIBRALTAR INTERNATIONAL 27 BUSINESS BUSINESS

Isola takes the firm’s funds business, as Cornerstone treasury management. Leading for private finance & gaming helm well as extensive experience role from Scotland In his new role as Vice client work Albert Isola, a in all aspects of Richard Bolingbroke has been President of Treasury and Formerly Managing Director of leading Gibraltar property acquisition, appointed to head up the Investor Solutions at NatWest, he AIB Bank in the Isle of Man for barrister - and joint development and Treasury function at NatWest in will manage foreign exchange eight years, David MacGregor He moved to Gibraltar in senior partner with financing, having Gibraltar from being an associate risk solutions for clients in has been appointed Managing April with his wife Sonja and older brother Peter - been at the forefront in Corporate Risk Solutions with Gibraltar and Treasury is Director of the Fiduciary Group, says for the first time working in with the 120 years of Gibraltar’s RBS Global Banking Markets in described by the Bank as “One which provides offshore the financial services sector he old law firm, Isolas, residential and company and trust services and has been exposed to the has become Minister commercial property private client work from experience of work colleagues for Financial Services development boom Gibraltar since 1982. routinely speaking in Spanish, and Gaming, - two He is a Chartered banker Portuguese and English. of the three largest Business and has accumulated 30 years Private banking sectors of the survives cull experience in Retail, Commercial Two in Queen’s Birthday economy - following Jon Farley has been and Corporate banking with honours the ambience Minister Albert Isola, MP his election to appointed country ROUND UP international banks, including Former Chief Minister, Peter
  Parliament at a by-election in head for Gibraltar at Lloyds TSB RBS in the Isle of Caruana QC, has early July. Private Banking, under new Man. been made a Knight   He took on the government owner Union Bancaire Privee Edinburgh, where he managed of the cornerstones of our service MacGregor has Commander of the position following the death of (UBP) a Geneva-based Swiss the interest rate risk solutions for offering to corporate clients in broad experience in Most Distinguished Charles Bruzon, who had been private bank specialising in UK corporate clients in Scotland. Gibraltar”. wealth management Order of St. Michael Minister for housing and the investment, institutional asset Married with three children, Bolingbroke hopes to pursue and financial services and St. George elderly. As a result of a minor management and private wealth Bolingbroke joined RBS Group some of his sporting interests, generally and has (KCMG) for services reshuffle of Cabinet posts, Isola management. 13 years ago and has worked in including football, which he also held several non- to Gibraltar by Her gained his business portfolio The decision by UK part- managerial roles since 2004, played at a semi-professional executive Director Majesty the Queen relieving fellow barrister State owned Lloyds Banking including three years in level in England, golf, cycling roles within the trust in the June Birthday Gilbert Licudi of a demanding Group to sell its private banking commercial and product and cricket. and fund sector. Sir Peter Caruana Honours. remit that also included interests in early Summer raised telecommunications, justice and £100m and involved its branches education. in Geneva, Zurich, Monaco and During Licudi’s 18 month’s Gibraltar, as well as the Lloyds tenure four new online gaming TSB private bank in Geneva. companies were licensed, with 3 Farley, previously Director more in the pipeline creating of strategic markets for Lloyds over 400 jobs and in financial TSB International, is developing services, employment has the bank’s strategy in grown by more than the territory and will 200. Both sectors manage relationships account for 20 per cent with government and or more of Gibraltar’s regulatory bodies, Wedding! Conference! Banquet! Gross Domestic Product reporting to Richard (GDP). Musty, Director of Themed Event! Corporate Evening! A member of the Private Banking and Product Launch! Summer Ball! Gibraltar Socialist Lloyds TSB Christmas Party! Labour Party (GSLP) International. since 1986 and 3 years Jon Farley heads up With 15 years New Years Extravaganza! Lloyds TSB Private Whilst enjoying dinner you will not fail to see ‘The after being admitted to Banking Gibraltar international Khaima’, our brand new Moroccan style marquee and the Bar of England and banking experience, THE new venue in Gibraltar for company events, Gibraltar, 51 years old Isola first at Barclays and then from weddings, dinners and a host of other uses. We are became an opposition politician 2008 at Lloyds, Farley has since particularly proud to have already hosted, to some in 1996, but did not stand for worked in private banking in acclaim, a number of important Gibraltar events this election for a second term, citing Asia, Geneva and the US. summer and you too can use this superb venue summer his business needs and family The UK-based Lloyds’ also or winter. So, whether it be a summer wedding for 200 interests; he has a wife, Graziella decided to sell all its retail or a Christmas party venue for your company or and four children. banking operations in Spain, organisation Gibraltar now has a truly unique venue. Ask to see it for yourself or for a full info pack Isola established a including Lloyds Banking e-mail us at [email protected] reputation for dealing with the International Spain and Lloyds Rock Hotel, Europa Road, Gibraltar. Tel +350 200 73000 affairs of ultra High Net Worth Investment Espana, to local Individuals and for developing company Banco Sabadell.

28 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com www.gibraltarinternational.com GIBRALTAR INTERNATIONAL 29 BUSINESS CONTACTS

Sir Peter held office until Levy is senior partner at Gambling on having previously been an in- December 2011 when his Gibraltar law firm Hassans. e-commerce house lawyer for Electronic Professional Bodies based in Gibraltar Gibraltar Social Democrats Party He joined the practice in Having formed Ramparts Law a Money Solutions in Gibraltar for was narrowly defeated and has 1976 and, as Chambers & year ago, specialising in financial eight years and also at Association of Pension Fund Administrators (APFA) Gibraltar Federation of Small Business (GFSB) Steven Knight, Chairman, Tel: + (350) 200 40466 Stuart Rodriguez, Chairman, Tel: + (350) 200 47722 since said he intends leaving Partners Europe 2013 Report services and technology and e- PartyGaming, the world’s largest Email: [email protected] Email: [email protected] politics to concentrate on his says, he “Has been at the commerce/e-gaming, solicitor e-gaming operator. Howitt (37) is career as a Barrister. forefront of the Gibraltar legal Peter Howitt, has become the looking to expand the GBGA by Association of Trust & Company Managers (ATCOM) Gibraltar Funds & Investments Association (GFIA) Marc X. Ellul, Chairman, Tel: + (350) 200 70921 James Lasry, Chairman, Tel: + (350) 200 64740 He is credited with gaining market and offers an unrivalled first Chief Executive of the creating affiliate membership for Email: [email protected] Email: [email protected] agreement to the idea of experience across a broad range Gibraltar Betting and Gaming firms that provide added value as Tripartite Talks with Gibraltar of field”. Association (GBGA), which had suppliers, as well as developing Bar Council Gibraltar Insurance Association (GIA) David Dumas, Chairman, Tel: + (350) 200 59026 / 79075 Chris Johnson, Chairman, Tel: + (350) 58452000 being an equal partner with the previously operated as an his other current part-time e- Email: [email protected] [email protected] Email: [email protected] UK and Spain to advance issues informal grouping. commerce interest as founder affecting The Rock, but which His part-time co-ordination secretary of the Gibraltar Gibraltar Association of Compliance Officers (GACO) Gibraltar Insurance Institute (GII) Ivan Perez, Chairman, Tel: + (350) 200 73520 Peter Abbott, President, Tel: + (350) 200 74570 did not include sovereignty, as role for 23 licenced operators, Electronic Money Association Email: [email protected] Email: [email protected] well as promoting the including a growing number of (GEMA). jurisdiction as being an onshore business-to-business concerns, Gibraltar Bankers’ Association (GBA) Gibraltar Society of Accountants (GSA) Christian Garcia, President, Tel: + (350) 200 44144 Colin Vaughan, President, Tel: + (350) 200 73520 EU finance centre and not a tax provides the means for e-gaming Awards correction Email: [email protected] Email: [email protected] haven. companies to have their interests Whitmill Trust was chosen as Gibraltar Betting & Gaming Association (GBGA) Society of Trust & Estate Practitioners (STEP) At the same time, James effectively represented with ‘Jersey Fund Administrator of the Peter Howitt, Chairman, Tel: + (350) 200 61061 Peter Isola, Chairman, Tel: + (350) 2000 1892 Levy, also a practicing barrister government, the EU and Year’ in the Global Awards 2013 Email: [email protected] Email: [email protected] and founder of Gibraltar individual countries such as the by “Corporate Livewire”, an Gibraltar Chamber of Commerce (GCC) Gibraltar HR Forum Community Care Ltd, Gibraltar - James Levy (CBE) UK where planned new internet-based international news Christian Hernandez, President , Tel: + (350) 200 78376 Ruth Halsall, Chair, Tel: + (350) 200 43865 was made Commander of the legislation, if progressed at the source, and not by Jersey Finance Email: [email protected] Email: [email protected] Most Excellent Order of the Caruana and Levy were end of next year, could adversely as incorrectly suggested in an Gibraltar Finance Centre Council (GFCC) Gibraltar Electronic Money Association (GEMA) British Empire (CBE) for services among nine people in Gibraltar affect the Gibraltar sector. article on Funds in the previous Peter Montegriffo, Chairman, Tel: + (350) 200 79000 Dani Spier, Chairman, Tel: + (350) 200 79645 to the economy and to the to receive an honour from the He is well versed in issues May/June/July issue of Gibraltar Email: [email protected] Email: [email protected] community in Gibraltar. Queen this year. affecting remote gambling, International .

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