p16 Legal p20 Regulation Nov/Dec/Jan 2009/10 INTERNATIONAL FINANCE AND BUSINESS

Gibraltar Day Tenth Anniversary

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www.gibraltarinternational.com GIBRALTAR INTERNATIONAL 3 Nov/Dec/Jan 2009/10 EDITORIAL COMMENT Volume 15 / Number 4 Low tax ‘heaven’ is the key

hat’s it then; the stage is Contents set. From now on there NEWS P6-8 is going to be an annual TIEAs little to do with crisis! or bi-annual conference for all in Gibraltar’s Ten down and still growing FinanceT Centre, judging by reactions New sea link follows air terminal to “The future – 2015” event in Innovative tax solutions needed October. So many good ideas came out of NEWS P10-12 the first event, which combined the More in-depth Campo study seven professional bodies in the Finance Centre Council Francis Cantos and Kerry Blight, its new chairman, that there is a Greater voice in Regulation determination to make it a regular fixture. With plain talking from the speakers – including the INVESTMENT P14 Financial Services Commission warning of higher charges Equities in, recession over and still greater oversight, countered by sector demands to ensure first that the FSC house was in order - no-one was LEGAL P16-19 left in any doubt that such an open forum was long Lawyers prosecute expansion overdue. Widening the legal spread A packed conference left many with standing room only and other leading lights in the business community REGULATION P20-21 absent. Being the first such event, there were clearly New EU rules give an ‘edge’ lessons to be learnt. The sheer volume of ‘fresh’ information imparted RECRUITMENT P23 between the professionals made obvious the potential for SRG & del Sol start up using the event as a showcase platform for interested GAMING P24-25 parties beyond Gibraltar. Underlying these points were the comments of several Euro Court rulings not enough in the finance centre on the contribution from deputy chief PEOPLE AND PLACES P26-27 minister, ; they described his words as ‘encouraging and informative’ even though, in effect, he INVESTMENT P29 largely replayed significant facts and figures supporting the Opportunity in Corporate Bonds progress of Gibraltar, that have been in the public domain for months! LAST WORD P31 Speakers repeatedly referred to the forthcoming Getting it half right corporation tax rate reduction - a low 10 per cent from 2011, down from 22 per cent now – as the key factor in driving significant further growth of Gibraltar within the EU. That and the switch in Gibraltar’s general perception- from being regarded as ‘tax haven hell’ to become ‘low GIBRALTAR INTERNATIONAL MAGAZINE tax heaven’ - which will certainly follow from adoption of Published by Gibraltar No part of this publication the raft of saviour OECD-inspired Tax Information International Publications Ltd. may be reproduced without Exchange Agreements! 1/5 Irish Town, Icom House, the written permission of the More the pity then that the Chief Minister, who Suite 6/PMB 104 publishers. The publishers doubles also as Financial Secretary, was kept away this PO Box 561, Gibraltar have tried to ensure that all time by other international commitments. information is accurate, but Editor emphasise that they cannot An invaluable future conference addition ought to be Ray Spencer accept responsibility for any ’s personal insight and aspirations for the [email protected] errors or omissions. The future, much as he did at the Finance Centre lunch on publishers accept no Gibraltar Day in a week after this year’s local Sales responsibility for statements conference. C.A. Tanner made by contributors or for The Finance Centre Council may be a useful sounding [email protected] any claim made in an advertisement. board and advisory forum for the government on fiscal Design and other developments. Bil Brooks Gibraltar International But delivering the message to a wider local forum will [email protected] Magazine is available on help reinforce the new-found feeling of strong subscription, 4 issues posted interdependence amongst the varying professional UK Agent: to: UK £24 - EU £32 - Tel: 0044 (0) 1993 703560 Rest of World £44. members in looking forward to 2015.

© 2009 Gibraltar International Publications Ltd.

4 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com NEWS NEWS

an ill-informed, populace agenda and …do incalculable TIEAs ‘very little to - and certainly uncalculated – damage to the long term eco- nomic interests of our coun- tries and financial services do with crisis’ centres”, Caruana said. In a summer report Angel Gibraltar fully expects to City of London as part of In addition, as part of the will be very well placed, Gurría, OECD Secretary- have signed at least 18 Gibraltar Day celebrations. Trilateral Forum of Dialogue, because we have gone straight General, asserted: “For Tax Information Exchange At that time (whenSpain, Gibraltar and the UK, to the relevant G20 jurisdic- decades it has been possible Agreements (TIEAs) shortly – Gibraltar International wentare negotiating a TIEA and on tions” – US, France, Germany for taxpayers to hide income significantly above the num- to press), he confirmed thatdouble taxation “preferably and the UK. and assets from the taxman by ber required by the ten TIEAs had been enactedby the end of this year”, The OECD says it will abusing bank secrecy and `OECD to be regarded as a including with Australia, Newaccording to a Ministerial look at the appropriateness of other impediments to infor- territory “fully committed to Zealand, Ireland, Germany,joint communiqué. agreements, how quickly they mation exchange. This will no international standards of Denmark, Austria, France, The objective is “to com- come into force and whether longer be possible.” information exchange” and , the US and the UK. bat money laundering, terror- they are being effectively Caruana however, told substantially implemented. Several others are ini-ist financing and fiscal or implemented? his London audience: Although “well on tar- tialled waiting completion. financial fraud.” As soon as However, Caruana was financial crisis”. and “in the aftermath, politi- Corporation tax level from “Frankly, if there were more get” to meet OECD criteria, Gibraltar is expected tothat TIEA is signed, Gibraltar scathing on “the new criteria, Recognising that greater cians are going into hyper 2011. Regulatory sovereignty powerful voices available to “we have not rushed for num- move to the ‘white’ list of ter-will - under Spanish - be invented at the G20 requiring tax transparency is important, reform mode”. It was right, of countries should not be the smaller international bers as some other countries ritories that have adoptedremoved automatically from an arbitrary number of TIEAs he asked: “What is it about in order to avoid a repetition, undermined more than strictly finance centres to counteract, have done”, Chief Minister standards of transparency andits list of ‘tax havens’. …we must beware pretexts the absence of TIEAs in the consideration be given to necessary, by “others on more or at least to contribute, to Peter Caruana emphasised to exchange of information But as Caruana pointed being relied on to achieve last 15 years that has con- how regulation and banking distant shores who for G20 deliberations, some of a packed Finance Centre when the OECD reviewsout, when the OECD came to things that have very little tributed to the collapse of should be done better. decades had agendas to halt these things would be much lunch at Drapers Hall in the progress on 20 November. its second stage review, “We to do with the global large banks in America and But Caruana said: “It is the advancement and predom- more constructive.” the need for banks in Europe vital we do not allow the inance of the City of London Nevertheless, Gibraltar to be rescued and propped up reforms that inevitably will and other British and non- would be “adopting whatever by their governments?” follow to undermine the British financial services consensus emerges in regula- He felt “it an example of sovereignty of countries to set centres”. tion and tax transparency” to Ten down and still growing the aftermath of the [world their own tax systems and There was “a great risk remain in the mainstream of The tenth anniversary of ness professionals, but also a economic] crisis being used to levels.” that politicians across Europe, international consensus in Gibraltar Day (October) cross-section of advance long-standing and Gibraltar was phasing particularly those facing elec- order to continue to prosper celebrations in London this living in the UK. extraneous agendas.” out zero rate tax and imple- tions soon, will succumb to and to attract large interna- year saw a series of record The problem now is “that The world had changed menting a single 10 per cent the temptation to respond to tional service providers. achievements that went to we are growing each year and reinforce the fact that the new venues probably will be occasion had become “the needed in future”, says most important annual show- Poggio, who co-ordinates and case event” for the territory. implements the day-long cele- Innovative ‘made-in-Gibraltar’ tures will be the norm”, and Around 1,000 people bration. more High Net Worth attended an evening Guildhall According to Finance tax solutions needed Individuals (Category 2 and 270 people Centre director, Jimmy status) and also international were at the Finance Tipping, the 270 places avail- Gibraltar in 2015 will be a on future challenges and plexity, looking for invest- companies will choose The Centre lunch briefing with able at the Drapers Hall lunch much enlarged financial cen- opportunities. ment solutions supported by Rock for their base. Gibraltar’s Chief Minister, was “heavily oversub- tre, substantially driven by the But the on-going imple- sophisticated tax advice”, Gibraltar had 330 people Peter Caruana. Both occa- scribed”, despite having advantages of having the mentation of Tax Infor- suggested Carlos Martins, with HNW status, James sions were filled to capacity increased capacity by 50 on promised low 10 per cent cor- mation Exchange Agreements head of Credit Suisse Tipping, Director of the and had “sizeable waiting last year. “When we began porate tax from 2011 – and, if (TIEAs) by OECD countries, (Gibraltar) institutional desk. Finance Centre, reported, lists” for invitations. this aspect of Gibraltar Day businesses produce as expect- “inevitably will lead to inten- Several speakers con- compared with around 200 a “The day has achieved eight years ago we hosted 120 ed, sufficient extra revenue, it sified global tax competi- firmed that meant account- decade ago, when there were what we first set out to do in people”, he notes. will ensure lower personal tion”, as one speaker put it, ants, lawyers and bankers minimal residency require- promoting the sophistication Designed to allow taxes as well. with people looking in the working together closely to ments compared to now, and of Gibraltar Inc”, explains Gibraltar businesses to nur- That was the overriding future for “safe havens rather produce innovative, ‘made-in- yet “in the last nine months , director of ture UK business prospects, as message coming from the than tax havens”. Gibraltar’ tax solutions. we have seen for the first time Gibraltar’s London Office, by well as allow UK sister busi- seven key industry associa- Companies and individu- Albert De Las Heras, the inclusion of Ultra-HNW attracting not only senior gov- ness offices to appreciate bet- tions that make up the present als increasingly will be “look- deputy manager for Jyske individuals and this will create offer, the event’s underlying The Sunset ceremony fea- ernment, military and busi- ter what The Rock has to £170m Gibraltar finance ing to book assets in a num- Bank’s local private banking a momentum.” purpose is to cement relation- tured 90 musicians in four centre, at the first joint con- ber of jurisdictions – multi- operation, pointed out that He considered it would ships with the City of military bands, including the ference to share information shoring – and, given the com- “only tax-compliant struc- London. . Continued P8

6 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com www.gibraltarinternational.com GIBRALTAR INTERNATIONAL 7 NEWS New sea link as air terminal takes shape Gibraltar’s new £55m air the top deck in Barcelona, is aircraft, bookings for the and controlled by the terminal is taking shape, with ecpected to make four sched- Madrid route have been insuf- Gibraltar Government. work on the 20,000+sq m uled half hour trips each ficient to maintain a greater No detail on the terminal two-storey building scheduled day (except Sunday), plus service, but MH Bland has internal layout has been to be completed in the first potentially tourist trips in taken control of Andalus sales released, but it will be “an quarter of 2011. between taking advantage of locally and with the Gibraltar iconic” building containing “I believe this move is a a glass viewing panel in the Government began a joint retail outlets and bank positive development, espe- bottom. route marketing campaign in facilities. cially for the business commu- A dual carriageway road nity”, Joe Holliday, Minister will run beneath the terminal for Transport, told the and underneath the runway to Gibraltar 2015 Finance replace the cross-runway Council conference in road, because of disruption to October, where for the first traffic crossing the border Fabrice Corre time he revealed artists’ between and Gibraltar SG Private Banking impressions of the building by the present 34 flight exterior. rotations. From early December, There is talk too of mid-October with a high Despite difficult commer- The Rock is also set to have a joint ticketing with Andalus profile visit by Spanish cial circumstances for the new sea link with Algeciras airline, which operates from tourism journalists. airline industry worldwide, for the first time in 40 years Gibraltar, although now on And Transcoma may also the number of Gibraltar air when Transcoma, a Spanish a temporary reduced service; bring Ceuta in arrivals last year grew 2.2 transport and shipping group, the airline has halved its into the Madrid link further per cent to reach 183,663 introduces its catamaran Madrid service to one a day boosting the Gibraltar service passengers, and 2009 is service across the Bay of each morning and evening appeal. expected to be another Gibraltar. and ended its short-lived The new air terminal will record. Gibraltar now has Punta Europa II, a 22m Barcelona route (at least until have capacity of up to 1m flights to Gatwick, Heathrow, long vessel currently having next summer). passengers per year - a six- Luton and Manchester, as an-all weather roof fitted to Even with small, 50 - seat fold increase - and be owned well as to Madrid.

tributes towards the prosperi- takeInnovative another tax solutionsyear fromfor P7 ty and smooth running of the Gibraltar’s transition from global economy. on business development, Hudson said the GIA tax haven to international “Innovation, speed and given increasing demands - wish list for 2015 included, largely as a result of EU more entrepreneurs and cor- financial centre to be widely flexibility are facets that allow WE STAND BY YOU recognised as a reality, with a small jurisdiction like directives and initiatives porates, more innovation, and the benefits of sound regula- Gibraltar to compete and dis- – was a recurring theme, but she added pointedly, “regula- tion, tax transparency, low tinguish itself against a back- Penny Hudson, chairman tors who understand and cre- TO PRESERVE AND PROTECT YOUR WEALTH tax rates and stability of gov- drop of large and wealthier of the Gibraltar Insurance ate openings for new business, ernment. states which are inherently Association, pointed out: with equally appropriately FROM ONE GENERATION TO THE NEXT. This would attract more slower and more complex to “Gibraltar prides itself on a trained staff behind them and companies looking to relocate do business in”, he added. regulatory body that is acces- active oversight.” to a jurisdiction with a Gibraltar’s economy had sible and pro-active; this Attended by over 250 sound reputation within been “summarised as one that needs nurturing and protect- people from the sector, plus “A relationship based on trust grows day by day, generation by generation. We make a long-term commitment ing, especially, the larger we government representatives, the European Community, is running on all cylinders”, to our clients, creating personal solutions which evolve with their needs. All over the world, our experts are Tipping said, whilst reinforc- Holliday noted and added: “It get as a centre. the day-long meeting pro- ing government policy of is well set to move into a new And she flagged up: duced other common themes, there to assist our clients in preserving and protecting their wealth.” Fabrice Corre, Private Banker. “We are presently working including the need for finance “quality, not quantity to bring era of social and economic Contact: SG Hambros Bank (Gibraltar) Limited, Hambro House, 32 Line Wall Road, Gibraltar - Tel.: +350 2000 2000 about cautious, sustainable prosperity”. with the Financial Services centre sectors – accountancy, growth.” As a business location, Commission on Solvency II banking, insurance, funds & E-mail: [email protected] As Joe Holliday, Holliday said Gibraltar had [an EU Directive to ensure investment, legal, trust & Gibraltar’s deputy chief min- “a first rate professional financial soundness of insur- company – to maintain high www.sghambros.com ister, pointed out: “Small infrastructure that is fully ance companies], and we need operating standards to meet international finance centres compliant with European to find a measured under- increasing (largely European) like Gibraltar are a vital part standards of regulation”. standing, with sensible, equal legislation and localised of the machinery that con- The impact of regulation and fair timeframes and training. resource requirements on See also Regulation both sides”. pages 12 & 20 We stand by you

ISSUED BY SG HAMBROS BANK (GIBRALTAR) LIMITED, WHICH IS REGULATED BY THE GIBRALTAR FINANCIAL SERVICES COMMISSION 8 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com NEWS More in-depth cross-border economic study planned

A wide-ranging economic study of the Campo de had been “pretty straight- influence on Campo de Gibraltar area is being projected for next year as forward reporting of the facts Gibraltar – the Spanish hinter- and figures from the study land – was quite different from a means of producing reliable data to reinforce directly”, Edward Macquisten, the reality”. the message of business interdependence Chamber Chief Executive The Spanish Minister’s between Gibraltar and Spain with opportunities reported, and on some media concern in particular was the sites “there were various Gibraltar Finance Centre. The for both communities. reader comments, both for and expenditure of that sector against, but generally it was within the Gibraltar economy It would be a joint venture by pretty positive”. in 2006/7 at £296m, represent- the local Spanish private sector Haynes reminded the ed more than 15 per cent of or academic institutions, and taking a detailed survey” in launch press conference that GDP, but it became over 17 the Gibraltar Chamber of part made difficult a more the Gibraltar effect accounted per cent when Government Commerce. accurate assessment of the for only 0.42 per cent of and Ministry of Defence A £25,000 initial econom- effect on the 86,000 house- Andalucia’s GDP in 2007, but spending was excluded. ic impact study just published holds in the region, the with Gibraltar accounting for by the Chamber suggests that Chamber noted. one-in-six Campo jobs at that Gibraltar was responsible for a There appears to be no time, there has been “a signifi- 20 per cent of GDP net gain of some £420m - Campo-specific statistics on its cant acceleration since in While financial services repre- around 12 per cent of local economy, unlike in unemployment” so that The sented just 8.7 per cent of the the Campo’s gross domestic Gibraltar where for several Rock accounts for possibly a near-19,000 total (full time product in 2007. years Professor John Fletcher quarter of local jobs. equivalent) employees in The implication, given the of Bournemouth – a Conversely, “Gibraltar’s Gibraltar, their contribution to relative stability of Gibraltar’s specialist in economic impact GDP was the highest at economy, is that since the models – has produced reports £87,000 per person. Offshore recession the contribution is for the Government. finance centre activity has a even greater! direct and indirect effect on But figures designed to Gibraltar companies are “ incomes that increases, when demonstrate the interdepend- the engine of economic growth induced effects are taken into ence between Gibraltar and account, to become £142m – the neighbouring areas of and wealth creation for the around 20 per cent of total La Linea, Algeciras and Gibraltar GDP. Sotogrande have been extrapo- entire region prosperity since the frontier The Report says it “would lated on the Spanish side large- with Spain was opened [in not be unreasonable to ly by allocating a proportion ” assume” that financial services 1985] has only gone in one of the Andalucia Regional Although political sup- direction; it has benefited sub- also accounts for a fifth, or Input-Output model. port is seen as necessary for stantially,” he noted, adding: £84m, of the Campo economy. Attempts to also consider such a broad-based fresh “Gibraltar companies are the “This is considered to be a the effect on Campo property study, the Chamber feels it has engine of economic growth conservative estimate, because prices of demand from to be independently driven, and wealth creation for the the finance sector employs Gibraltar residents and says Andrew Haynes, a lawyer entire region.” higher income staff than the Gibraltar workers living in who presented the Gibraltar- The Chamber study had national average for Gibraltar Spain, which would not exist if funded study on behalf of the been prompted by Spain’s for- and a number of them are there was not a thriving Chamber. mer Director general of likely to have second homes in Gibraltar economy, were “I have been promoting Foreign Affairs and chief nego- Spain and more than propor- based on hypotheses. this idea for 15 years and it has tiator in the Tripartite Forum tionately make up the numbers not previously taken off, but I (involving UK, Spain and of Gibraltarians who make believe that if we now work Gibraltar), Snr Jose Maria excursions into the Campo de together as businesses to pro- Pons Irazabal, whose “percep- Gibraltar”, the Report asserts. Lack of data duce a study from the Campo tion about the workings of Reinforcing that point, The Chamber suggests perspective, it will have greater Gibraltar’s economy, its key Prof Fletcher’s report says Gibraltar’s effect on property credibility on both sides of the economic activities and in par- Gibraltar finance centre activi- added up to £5.4bn to Campo border and is more likely to ticular, Gibraltar’s economic ties are conducive to the asset values. happen”, he told Gibraltar But “the lack of data that International. are available without under- Media coverage in Spain Continued P12

10 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com NEWS

Francis Cantos Bid for greater ‘voice’ in Francis Cantos, Gibraltar Government Media Director, died suddenly aged 57 when international regulation taking a short holiday in Sotogrande this summer. He was for 13 years the eyes Gibraltar - a financial services centre relatively unaffected by the current and ears of Chief Minister Peter Caruana, who world economic crisis - is bidding to make sure it has a role in shaping future described him as “a international regulation. consummate media professional and a personal friend.” Current UK efforts to resolve Killick emphasised that as “They should also do it Having previously served for issues by focusing on bankers’ a Regulator with a valid input, 12 years for us”, he emphasised. bonuses are wrong, doomed to Gibraltar needed to play a role as editor failure and “lack imagina- in the shaping of the future Killick pushed home his of the tion”, believes Marcus Killick, international regulatory envi- point by saying in respect of Gibraltar Gibraltar’s Financial Services ronment; “We must engage the new European Supervisory Chronicle, Commission’s Chief Executive and participate with our Authorities - where Gibraltar’s Francis was well Officer. fellow regulators”, ensuring exclusion was less clear cut – “we will, if Government so known and “Incentive induced short “our voice is heard in the respected wishes, push for participation term-ism clearly had a role to international regulatory com- across the play in the crisis, but this focus munity”. or, at least, observer status”. political is not the solution. There were Given that the proposals and social bigger issues at play in the appear to expect Gibraltar spectrum causes of the crisis than bonus- FSA must understand to contribute to those – within Gibraltar and in Spain and the UK – from es”, he told October meetings The new European Systemic Authorities’ budgets, “then we Risk Board, due to go live next should get no less”, he where numerous tributes of bankers, insurance and have been received. year and which will impact on maintained. funds industry leaders in Ray Spencer, Gibraltar Zurich and Geneva. the way Gibraltar and other But more positively, International Editor, says: Either jurisdictions will EU regulators operate, “will Gibraltar’s Regulator also had “Francis was a real not apply it in a uniform way only have one Competent just been asked to join the professional, and will be or star performers will simply Authority per Member State European Global Financial much missed. Although I knew him for only a move to non banking institu- on it”, Killick pointed out. Platform, set up to bring And he maintained: “This together high level EU officials comparatively short time, it tions - perhaps even part was clear that he loved means we must ensure the UK and finance sector representa- owned by banks - so reducing working in and for the media, the pool of talent available in FSA understands any issues we tives to exchange views on EU combining his interest in the banks themselves, he main- have, and that it represents issues of concern or relevance. politics. tained at the meetings organ- them. The FSA will be doing This included areas of “The government will find it ised by Gibraltar Finance that for the Competent banking, securities, insurance hard to find such a capable and knowledgeable Centre on Funds and Wealth Authorities that exist in the and accounting, he said. successor.” Management. UK, but who will not have see also ‘New EU rules direct participation. give an edge’, page 20 He is survived by his wife Pamela and two daughters.

Campo study from P10 misgivings and barriers that working on The Rock with pay into Gibraltar from the Campo Campo’s economic develop- have affected cross-border rela- of £57.39m. for bunkering during 2007, but ment, “because they add to the tions in the past, Chamber Gibraltarians living in if it was included it would add quality and range of activities director and head of RBS Spain but working in Gibraltar £300m to the impact of available in the region and International and NatWest in and others living on The Rock Gibraltar on the region! have a reputation for strong Gibraltar, Marvin Cartwright and crossing the border con- The Report concludes: regulation”. said. tribute nearly £30m to the “Both economies and societies Financial services brought In late 2007, there were Campo economy, the report would be the poorer without additionality rather than com- 2,748 Spanish workers crossing suggests. Those Gibraltarians the other, but together the petition for existing services in the frontier into Gibraltar and with second homes in Spain strengths of both economies the Campo, which largely is they earned almost £43m in added a further £33.5m to the have ensured that the entire around banking. that year, most being spent in local economy. Campo region [including The Report should help Andalucia. At the same time The total assessment Gibraltar] has developed to a stimulate positive debate and there were 2,689 other excludes some 1.5m tonnes of greater extent than would help to break down traditional nationalities living in Spain and petroleum products imported otherwise have been possible.”

12 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com INVESTMENT Equities are the place to be – recession is over! Despite uncertainty over how long the ‘bullish’ stocks moved from the bottom to the top of the trading range, but we see the Bull run and shares market will continue to rise, strategist continuing with brokers becoming more Henk Potts, Equity Strategist at Barclays Wealth, told optimistic. “Earnings upgrades have gone from Gibraltar clients and financial advisors that “equities 10 per cent in January to around 60 per are where you need your investments to be now”. cent now for corporate stocks”, and he believes it will lead to further gains into 2010, but at a slower pace. “It’s a better e emphasised in a strong- per cent from their peak and have risen result than you would have imagined, ly upbeat presentation 10 per cent since February. In the US, given that we have gone through the early in October: “Our peak-to-trough house prices fell a fright- most potentially damaging economic expectation is that world ening 45 per cent, but some of the latest crisis since World War 2,” he pointed recession is at an end; we surveys are more positive. “ out. haveH got through the worst and growth Potts says “we are certainly moving Barclays Wealth tended to look at will return to the major economies in this into world economic recovery phase” markets on an international basis and third quarter. and points to experience in the second there is a changing global dynamic taking In the latest investment seminars, quarter of this year when “the majority place. “Most people point to China – a Potts was adamant that “there are tangi- of major companies were achieving or major focus for us - and ble signs of the speed and advise investors to gain strength of world economic exposure to that part of the recovery.” The emerging economies benifit most from the world. China’s economic However, asked if a down- revival in world trade growth expectation for ward ‘blip’ was likely in the 2009 is just over 8 per cent; trend for equities, Potts con- in 2010, growth will be up ceded: “In the short term there 10 per cent. China is antici- will be some element of consol- pated to become the world’s idation coming through – second largest economy over rather than a blip, we prefer to the next two years”, he said. call it a pre-decline rally. Unlike in May, Potts “We would not be sur- now believes in switching to prised if we saw a 5-10 per cent investment in small capi- period of consolidation, but talised companies – those given the other factors we with a market value of don’t believe it is likely to be between US$250m to for long and we have a positive US$1bn, particularly in the US. A small three month view. This quarter’s results exceeding analysts’ expectations”. companies’ index there expects a 150 per will be the biggest determinate. Although revenues were sometimes dis- cent earnings growth in 2010 and 50 per “There is an increase in optimism appointing, “companies are leaner and cent more a year later, compared with the and decrease in pessimism”. Potts points meaner having adapted to the lower S&P Index of the biggest US companies, to the “explosive rally in financial demand environment by cutting costs, where a 20-25 per cent rise in earnings markets over the past five months – the and that should be good news in terms of performance is predicted. strongest rally seen in seven decades.” Corporate profitability”, he forecast. “We still advise portfolios to contain There are a number of reasons to be Nevertheless, earnings this year over- stock on the cyclical side of the economy optimistic; historically low interest rates, all are likely to fall about 10 per cent – -industrials, technology and, more selec- unprecedented levels of fiscal stimulus, a still better than analysts were expecting tive, the mining sector. We are cautious recovery in confidence with house at the start of this year. In the US, corpo- on consumer staples and utilities – these stabilisation of the financial sector on a rate earnings are down only 5.5 per cent, are highly valued already, and are ideal global basis. “but analysts are pencilling in a big for cautionary investment times. “In “The UK is a great example of rebound in 2010 – possibly by up to 25 terms of asset class, equities are where housing stability returning, admittedly per cent”. you need to be now”, he maintained. from a very low base. The latest surveys He emphasised: “It is still necessary see also “low inflation brings show a small rise in house price levels to be careful about buying into this equi- Bonds opportunity”, page 29 over the last year - they are only down 13 ty rally; in a very short time, we have

14 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com LEGAL LEGAL Gibraltar lawyers prosecuting expansion

Gibraltarians can trace their law firms back to 1892 – some prompted a dramatic fall in US passenger with 120 staff and 20 lawyers, they run numbers resulting in default on 300 years less than in – but as Ray Spencer finds, into hundreds of thousands of pounds. mortgages,” explained Melo Triay. “Today we have commercial pressures the professionals who account for around 12% of GDP Gibraltar’s English-based Admiralty and I am no longer able to spend time in , coupled with its strategic position in are expecting to expand their businesses on the back of Court”, he observes, adding: “The profes- the Mediterranean, makes it a favourite sion is a lot more competitive and complex arrest port, with a speedy and efficient sys- the jurisdiction’s growing appeal. and clients are more demanding, especially tem and relatively low Court and other on the commercial side, wanting advice by costs. ibraltar’s barristers and solic- were probably the smallest law practice in return. However, lawyers see the biggest itors are taking the opportu- Gibraltar, residing in quaint Victorian “It is not possible to serve commercial James Levy, senior partner, Hassans: “generally opportunity is in the continuing growth of nity to ramp up the skills and premises.” run firm Triay & Triay. The 104-years old clients properly and have a litigation prac- Gibraltar lawyers cost 30-40% less than UK” Gibraltar’s finance centre, virtually professional training locally Four years later, when Hassans took firm started by the late Arthur C Carrara tice, in one generation there has been a unaffected by the worldwide economic to take full advantage of the on a third person, Tony Provasoli – now a QC and subsequently taken over by Melo’s huge change.” it differs significantly, making it difficult recession. big influx of corporate and financial busi- financial services expert – the practice sup- grandfather, P S C Triay QC, promotes Pay can be significantly below the UK. G for ‘outsiders’ to quickly practice. ness expected as a result of the introduction plied him with a collapsible playing card itself on “integrity – professional ethics are A trainee solicitor locally would be on Melo Triay’s firm remains one of the Offshoots established in 2011 of a new low tax regime. table as work station in the the firm’s bedrock.” about £17,000, but in England it is at least strongest in Gibraltar’s banking scene, as Triay’s wealth management off-shoot, was The close interaction between lawyers, reception area. “I consider that we are £30,000 and when qualified after two well as general financial industry, private established in 1974, under the trading accountants, company administrators, David Dumas, chief liti- lawyers first and foremost, giving years the solicitor would earn some client business and property/conveyancing. name of T&T Management Services, to local regulators and the Finance Centre has gation partner and Chairman clients the best possible objective £60,000, probably double that of Strongly involved in litigation work combine the skills of asset managers, been a key factor in the success of of the Bar Council, was num- advice; the business side comes Gibraltar. generally, Triay claims still to be the largest independent financial advisors, lawyers Gibraltar’s economy in recent years. ber 44 on the Bar list when he second”, Triay reflects. Favourite arrest port firm in Admiralty cases with a 70-plus per and accountants. Totus (who replaced In the last decade, the number of joined as 1 of 5 lawyers at “This traditional approach Yet there is no shortage of youngsters cent share of work. Instructions come T&T Management Services) provides a lawyers in Gibraltar practices has more Hassans in 1981. could have impacted financially wanting to enter the profession, and the direct, or from UK shipping law firms and wide variety of services and was formed to than doubled to reach some 200. The 30 “It was then said, there but the client comes first”, he number grows annually. This year, the advisors to banks, although Triay also has provide trust and company services to firms have an estimated collective turnover were too many lawyers in the asserts. Government has provided 150 scholarships for more than five years been “chasing Triay & Triay private clients, but widened of around £95m, including several off- jurisdiction. But the frontier “James Levy took the legal to study law in the UK, where just about all assets in Gibraltar for the US Securities & its activity to include IFA work through an shoot and associated enterprises in the opened a year or so later, and profession by storm, and Gibraltar’s lawyers have trained. Exchange Commission”. association from 2005 with UK-licensed territory and abroad. life – and business - took changed Hassans from a sleepy Although based substantially on Triay’s largest Admiralty case involved 20Twenty. With only 30,000 inhabitants in off”, Dumas reflects. practice into a commercial busi- , adopted wholesale in 1962, arresting a fleet of seven cruise Totus has offices in the UK and now Gibraltar – people know each other well Levy, described as “a ness”, recalls , senior Peter Isola, senior partner, Gibraltar’s law has been substantially liners –each worth £200m - in 2001 in the Spain and claims to be the largest trust and, as throughout Gibraltar history, poli- huge dynamo of work andIsolas, whose 1892 document partner of the third largest firm is pictured above altered, and in one major area – property – aftermath of America’s 9/11 attack that tics, family ties and the people you know, commitment” is credited by many of his and great, great nephew of the firm’s Continued page 19 can make the legal and peers with “being significant- founder Horace Parodi in 1892. business process smoother ly responsible for the growth Levy seems proud to admit commer- and quicker than in many of the economy, particularly cialisation of Gibraltar law. “I looked at other locations. the finance sector”. what successful UK firms were doing and Widening the legal spread However, in gearing Yet all of the major firms moulded mine on it; specifically, the way up for the expanding claim to have been involved we charge, time management and looking No English law firms have Gibraltar Among Marrache’s most prominentvariously reported as planning offices also world, significant differ- in preparing aspects of new beyond our boundaries for work. offices, unlike in many other UK territories, work in recent times has been advisingin New York and Hong Kong, although no ences have emerged in the finance centre legislation, to but Triay Stagneto Neish, a 13 lawyer prac- shareholder in the £28m sale of Westprogress has been made on these. approach to law and to have strong litigation teams, tice, took over the local business of interna- Cornwall Pasty Company shares, and New offices are not the only way to the development of law. give tax advice, and to be Commercial pressures tional firm Denton Wilde Sapte in early advising on establishment of a $1.5bnpick up international work. A year ago, 43 Undoubtedly, the involved in company, trusts “People expect to be charged and pay, as 2006. Experienced Investor Fund in Gibraltar. years old Rafael Benzaquen set up as sole largest firm by far is and funds formation. they do everywhere else in the world, but However, Gibraltar law firms have Spanish operations, initially largelypractitioner heavily utilising internet tech- Hassans. It has 70 quali- Within ten years of we are middle of the road when it comes to opened offices abroad. fuelled by the residential property market,nology to build a client base requiring, fied lawyers (24 as part- Levy’s arrival and subsequent cost here in Gibraltar.” Indeed, 26 year old Marrache & Co, have been launched by Isolas, Triay andamongst other things, advice on EU law. ‘Melo’ Triay, managing partner, ners) and a staff total of Triay & Triay: “we are lawyers first commercial drive, Hassans Indeed, he maintains the cost of which employs around 100 people and has Triay, Marrache & Co, and Hassans. Building on his seven years experience 245 – more than twice as manyand foremost” as the sec- had overtaken the Triay firm as largest in Gibraltar lawyers generally is 30-40 per 54 lawyers, now positions itself as the only Cruz & Co, a law practice formed inas head of the Government’s legislation ond largest firm. Gibraltar. cent below that charged in the UK, because truly ‘international’ firm having also 1996 by Nick Cruz after six years withunit, Benzaquen plans to expand early next But as James Levy, senior partner, “Other firms have taken a strong com- overhead costs on The Rock are cheaper. opened offices in Lisbon (2004), Isolas, joined up with Spanish firm Balmsyear, and he specialises in putting together recalls: “In 1976 when I joined Sir Joshua mercial approach”, notes Melo Triay, man- Nevertheless, 50-years old Peter Isola Luxembourg and Prague (2005), as well as Abogados, to form Balms & Cruz Moroccoprivate equity investment funds in support Hassan [then Gibraltar’s chief minister], we aging partner with the traditional, family- says: “When I began in practice in 1982 the being the first Gibraltar firm to open in in January 2007. of Mediterranean projects in luxury total of our overheads was £29,000; now London 14 years ago. And Marrache in recent years has beenmarkets.

16 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com www.gibraltarinternational.com GIBRALTAR INTERNATIONAL 17 LEGAL

Lawyers prosecuting expansion from page17

months later to ask us to represent their clients. “Gibraltar’s reputation is definitely spreading.” Litigation still is big business in Over a Million Years in the Making Gibraltar. “People are more aware of their rights, warranty work and commercial litigation all are being resolved in local courts, as with companies based here and involved in disputes between their

Three of the seven Renaissance passenger cruise liners lay berthed and arrested on Gibraltar Port’s people and a commercial operation both detached mole in 2001 located elsewhere”, says Dumas. Part of the reason he feels is that company linked to a law firm, bringing local courts have a shorter waiting time total Triay staffing to over 100 people. business, but - having the isthmus to link and are less expensive than in the UK This followed formation by the The Rock with mainland Spain - with- and can cut out one level of the profes- Isola brothers, Peter, Lawrence and out any physical limitation. sion, because of the fused barrister / Albert in 1989 of the Fiduciary Group, “Gibraltar has to change to deal lawyer system. with offices in London and Zurich, to with the changing off-shore world and However, having more lawyers still provide corporate and trust services companies seeking to relocate are look- means spreading the available work worldwide. ing to move to jurisdictions that are more thinly. “There has been a shift from being more sophisticated in the way they According to Dumas: “We have off-shore and a tax haven to an EU work. Gibraltar is moving that way.” reached saturation at the practicing financial centre – an essential step in that In the meantime, Hassans was Bar.” direction being with Gibraltar benefiting described this year by Legal 500 as being One possible solution is for more from the growth in insurance, funds and Gibraltar’s “most highly reputed law lawyers to go into commerce – becoming investment services and able to market firm” and Levy rated “Star Performer” in-house lawyers. “Clients can feel it their services throughout the EU”, Isola by Chambers and Legal 500 for a third beneficial to have people on hand who believes. successive year. He nevertheless, still have legal training and who are able to Today insurance, investment servic- gives up to 25 per cent of his time to pro give initial advice; lawyers too like to es, funds and e-gaming (where Peter bono work locally. deal with their own kind”, Dumas Isola was one of the pioneers) are still Hassans has been undertaking suggests. big growth areas, he notes, making for a Parliamentary drafting work for South Superintendent Jay Gomez of the more diverse Gibraltar economy, Africa, Kenya, Maldives and , as is one example. although Isola’s Private Client business well as Gibraltar, and Levy senses there This summer he became the first serving also continues to grow and remains a is “more large-scale off-shore work police officer to be Called to the Bar of significant part of Gibraltar’s business. around where we can compete, England & Wales and provides the force “But there will be a certain amount particularly with Jersey and Guernsey”. with its own in-house barrister. of pain, especially for companies that In September Levy and a team of only provide corporate services, such as three colleagues, shuttled between Gibraltar’s Law company formations, and do not have a London and Gibraltar to complete a ● a Separate and distinct jurisdiction number of strings to their bow”, he US$350m takeover of a UK public com- with own legislation maintains. pany in mining, giving strength to the ● only jurisdiction in “They need to move to added-value claim that local lawyers are frequently continental Europe (courts, statutes services on the corporate and trust side: regarded as effective as their English and principles of equity based on Visit Gibraltar, the vibrant city that combines the spirit of the broader offerings or merge with others”, counterparts and able to attract interna- English law), where there is a duty of is his analysis. tional business. confidentiality Mediterranean with British tradition. Experience the stunning And Hassans has just been retained ● most professionals trained in UK St. Michael’s Cave and learn about the myths and legends that by a large telecommunications company ● some 200 lawyers - one of Europe’s Oportunities open up wanting to become established in Spain, highest number of lawyers per capita surround the Rock. Whether you choose to take time out from Triay sees “a huge window of opportu- because the law firm could “provide a ● fused legal profession - barristers nity” opening up in just over a year’s bridge between Anglo Saxon and the hustle and bustle of Main Street, where you can enjoy VAT and solicitors enjoy same rights and time from the introduction of the 10 per Spanish cultures.” privileges on court appearances and free shopping, to relax in one of the many Al fresco bars or soak up cent corporation tax.” Levy notes: “On a number of occa- direct contact with clients the tranquillity of - there’s something to suit everyone. Hassans’ Levy, also enthused by the sions we have appeared in Court in forthcoming tax change, points out that Gibraltar for one party with English ● independent & growing judiciary “unlike Jersey, Gibraltar has an island- lawyers on the other side. These ● Law firms generate circa £95m pa For an information guide please call +44(0)207 836 0777, type economy and approach to attract lawyers have come back to us a few or visit www.visitgibraltar.gi

www.gibraltarinternational.com GIBRALTAR INTERNATIONAL 19 REGULATION REGULATION

Compensation Scheme is one of the only ones in the world that has its own insur- non-EU environment. ance cover to provide a high level of Opportunities arising Rather we have the benefit of the standards expected of us. protection for firms in the event one of reverse. The Directive, in whatever final Our track record may be excellent, their fellow industry members’ defaults. form it takes, will present Gibraltar’s but the eyes are still upon us. The fact that it was possible to renew fund industry with possibly unparalleled Just as the OECD has created its tax from new EU rules this cover in the teeth of the credit crisis opportunities. Inevitably, the Directive white, grey and black lists, so the is testimony to the way in which this will throw some kind of cordon around Financial Stability Board (FSB) will devel- sector operates. the EU. op one for jurisdictions that are Over the past three years, Gibraltar give ‘an edge’ Funds outside the Union will find it uncooperative in prudential supervision. has grown into a competitive funds more difficult - if not impossible - to Using as its basis the IMF assess- jurisdiction. finance sector. Given the nature and effectively sell within it. The competitive ments of individual jurisdictions, togeth- To date this has been primarily as a New financial products and services number of banks, and our risk based advantage of Gibraltar for those wishing er with whatever other methodology they result of the development of EIFs, follow- regulatory approach, we do not have to market alternative investment funds in choose, the FSB will first categorise, then are constantly being devised and ing introduction of the Collective sleepless nights as supervisors. the EU will be palpable. encourage, then criticise and finally ask delivered to consumers, often at Investment Schemes Act in 2005. Most of our banks have their head For example, at the very least, the for proactive countermeasures to be The number of such funds has con- offices and therefore, lead regulators, in non EU fund manager will have to show taken against the unwilling. breathtaking speed. Some, such as tinued to grow, despite recent market other jurisdictions. This has some weak- its home jurisdiction has equivalent From this we have nothing to fear, credit derivatives have proved to be upheavals. The investment types may nesses, as has been seen in the recent regulatory protection. What will be the being members of two of the internation- have changed, but growth has continued. toxic, but Marcus Killick, chief crisis with regulators being less than exact test; who will judge? How could al standard setters, IOSCO and the IAIS, jurisdictions such as Cayman, with their executive of Gibraltar’s Financial “joined up” with each other. and connected to Basel on the banking However, the introduction of EU previously highly successful bulk model, side and the FATF move against money Innovative opportunities for achieve this? Services Commission, argues this wide of supervisors to monitor funds laundering, via our membership of the does not mean innovation should be the largest banks will improve matters Given the global market of Cayman Offshore Group of Banking Supervisors. and the FSC will play its part in those Gibraltar’s ability to innovate within a and BVI funds, would they want to seek We also play a significant role in the shunned. colleges where appropriate. sound regulatory structure provides us equivalence and add cost burdens to Offshore Group of Insurance Supervisors with an opportunity to become a leading those funds, which are marketed in juris- and in 2007 the IMF reported that t has been said that six out of Government to develop new financial EU fund centres. Like so much in today’s dictions that do not require equivalence? “Gibraltar has a well regulated finance todays most “in demand” jobs did products, for example our ExperiencedInsurance growing world, it will be regulatory driven. Will they create two tiers of funds, centre”. We were more compliant with not exist ten years ago and that in Investor Funds (EIF) and Protected CellThe insurance sector - a blend of self UCITs III is the third incarnation EU marketed and non EU marketed? Do international standards than the majority the 21st century we will have to Companies (PCCs). managed firms and those managed in of the Undertakings in Collective they have the regulatory resources to of centres, both large and small reviewed train our children to do jobs that We have a very specific, Statutorywhole of in part by insurance managers - Investments in Transferable Securities demonstrate equivalence even if they since! Ido not yet exist, using technology that role to reduce systemic risk and protectcontinues to grow with significant Directive and was transposed in wanted to? No complacency Gibraltar via the CIS Act and, to date, Whilst the focus of the draft has not yet been invented. the reputation of Gibraltar. But ratherelements passporting into the UK and Yet despite this track record we cannot be there it has stayed. Gibraltar has not Directive is on the manager and not the What is true of is equally than act as a brake on growth, our objec-elsewhere. complacent. Like other regulators, we developed a UCITS fund industry in the fund itself, my view is that a number of true in the finance sector. tives require us to be a partner in it, Gibraltar has about 8 per cent of the have sought to learn from global supervi- way it has EIFs. existing alternative investment funds The truth is that it was not innova- complementing government and industryUK car insurance market and our life sory errors of recent years and we must But now with the new economic seeking to sell in Europe will move into tion that let us down - it was the failure in developing the finance sector. business is showing particular growth. ensure that the legislation under which environment and with UCITS IV in the the EU - just as some of those managers of senior management within financial The FSC covers the full gamut of As with the banks, the Government we operate is fit for purpose. We are wings, things are different. The changed currently operating out of London, but institutions and their regulators to financial and quasi financial areas, fromhas made it clear that we do not want statutorily required to advise government market conditions are making the switch aimed at the Far East or the Americas, understand it and the risks it brought. banking to insurance, funds to companybrass plates and that mind and manage- where we find it wanting. from unregulated, or under regulated, may move away. The benefits were easy to see - vastly management and, most recently, over-ment must be in the jurisdiction. Some changes as a result of the crisis hedge funds into retail UCITS funds far For those coming in and those set- improved short term profitability - but sight of auditors through Gibraltar’sOutsourcing, of course is permitted, but will be forced on us by international stan- more attractive. ting up, Gibraltar will provide one of the the medium and long term impacts were transposition of the Statutory Auditnot so that there is a lack of a real dards or the EU; some, such as increased The wider investor base is one rea- few natural platforms. Of course we will ignored by most. Directive. presence in Gibraltar. solvency requirements, are much needed son; the investor confidence in a UCITS have to be ready, again demonstrating the This is where we, as regulators, must This latest addition presents us with The issue of the EU is equally vital and overdue. wrapper provides another. importance of innovation. address the issue, because if our significant challenges. for insurance. We are commencing the Gibraltar has demonstrated its pow- Whereas for hedge funds, Cayman, approach was simply to stifle develop- immense task of getting ready for imple- ers of innovation and will continue to do BVI and the rest provided a fertile ment, then we will let down the market mentation of Solvency II: the legislative, so. It has demonstrated the partnership ground, they cannot compete in respect and its consumers. If financial innovation No sleepless nights over regulatory and supervisory requirements Supporting new laws of Government, industry and regulator, of the move to UCITS. had been disallowed in the past, we banks for this are enormous; greater than the Within the FSC, we will have to stand each complimentary of the others, each Nor can the : we are would still be in a barter economy or Our banking sector continues to thrive - Capital Requirements Directive, greater prepared to implement the regulations respecting the others’ roles. in the EU, they are not; we can launch a trading using coloured beads! dominated by UK and Swiss institutions than MiFID. and legislation that will be needed to It is a challenging, but exciting, UCITS platform they cannot. Part of the Financial Services - providing a range of services to the local As supervisors, if we get it late or facilitate all of this. Our supervision will future. Commission (FSC) mission is to and international community. The sector wrong, we threaten the viability of much However, we are a quality not a have to be visible, efficient and stand up quantity jurisdiction. We do not have the “enhance Gibraltar as a quality financial is small by many standards, with assets of the industry and we are working with, to outside scrutiny. Based on a speech at the Gibraltar hundreds of funds that, when the centre”. totalling about £11.5bn and; lending is and supporting, the Gibraltar Insurance Indeed, our ability to demonstrate Finance Centre’s October Alternative Investment Managers This is not a passive statement it is stable at £3.1bn. Association on this. the quality of our supervisory approach seminar in Geneva. an active obligation. And that inevitably Backed by the recently increased Our investment services sector is still Directive comes into force, would will never be greater. We will have to involves working with industry and deposit guarantee scheme, banks provide vibrant. The Gibraltar Investor inevitably move to a less regulated show we have the resources, the capabil- solid bedrock to other parts of the ity and the will to meet the international see also FSC bids for recognition, page 12

20 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com www.gibraltarinternational.com GIBRALTAR INTERNATIONAL 21 RECRUITMENT

Shorter list to fill the gap both to client companies and the job seekers – no-one wants to waste time The promise that “our job applicant financial recruitment consultancy. unnecessarily with interviews that are not ‘short list’ provided to employers will be A change of lifestyle and her hus- well-suited to their needs”, Pearson says. shorter than those provided by our com- band’s semi-retirement caused her to set- Along with Senior Consultant petitors” may sound an odd way to pro- tle in Marbella, but she soon got back to Thomas Pearson (no relation), who has mote the launch of the latest recruitment work, initially for another Gibraltar in-depth project IT background, she sees agency in Gibraltar, but managing direc- agency. “Quickly disillusioned”, she strong demand developing from tor Angelique Pearson thinks it makes determined to launch a business with her Gibraltar’s e-gaming companies and sense. proven professional formula of ensuring already counts one as a key client, along The Select Recruitment Gibraltar there are clear job profiles, short list with a large firm of lawyers. (SRG) agency based at Waterport, spe- applicant references are taken up in “From our soundings around the cialises in service for the Finance Centre, advance, and interviews with candidates Rock, there are several more large com- building on Pearson’s UK-wide experi- to ensure “a good fit”. panies moving here at the end of this ence where she set up, and for eight years “It sounds basic, but it’s essential to year; it’s a good time to launch our con- ran, the Select Group (now SF Group) do these things to provide a good service sultancy”, Pearson declares.

this part of the world, where legal and Moving times made easy social requirements are quite different Having moved home 15 times in his 20- world with the United Nations. and, potentially distracting”, explains year international marketing and general So they quickly spotted the absence Simon. Companies, which are charged a management career, Simon Robertson of relocation specialists in Gibraltar and fee by Del Sol Packaged (DSP), “get as a reckons to know a thing or two about the the Costa del Sol (where they had settled) result, fresh staff that are free to concen- problems and distractions of relocation. and saw the opportunity to draw on their trate on the job from day one without His Russian-born wife and business personal experiences to benefit local relocation distractions”, says Simon, who partner, Marina, similarly had to cope for employers and staff being recruited from also speaks , whilst Marina adds 15 years with uprooting at short notice outside of the region. other languages, including Spanish, on peacekeeping missions around the “It’s a big step for some moving to Portuguese and Italian. Specialist Tax Advice Tailored to your needs

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Merchant House, 22/24 , P.O. Box 758, Gibraltar © 2008 Deloitte Limited. Member of Deloitte Touche Tohmatsu GAMING GAMING

Bodner continued: “Online gaming which not only opens up the floodgates businesses, which is unlikely to lead to has become a market reality. There is to crime, but also passes up on consumer any significant rise in local sector urgent need to develop a legal frame- protection.” employment, which currently is estimat- Euro Court rulings work in tune with the times to warrant In the meantime, Victor Chandler, ed to stand at around 2,000 people. the interest of consumers, the state and which moved its gaming business from Ladbrokes was one of the first to operators.” Court rulings would not be the UK to Gibraltar a decade ago, has gain a Gibraltar gaming license, which it not enough for able to fill in for regulation in the become the first British bookmaker to has maintained throughout, enabling it medium and long term. obtain an online gambling licence in to threaten the UK government with a Gibraltar has long-been a fully regu- Madrid a market said to be worth some move of more of its on-line betting online gaming firms lated jurisdiction for gambling and has £250 million pa. and hopes to gain a operations to The Rock by the end of been developing Codes of Practice in similar licence in South Africa next year. this year unless betting taxes are Gibraltar’s sizeable on-line gaming community is to protect the profits of local companies support of legislation. The Generic Code Party Gaming, another Gibraltar reduced. and, as has been found in cases involv- was approved earlier this year and the firm, bought London-based Cashcade Betting tax rates in Gibraltar are a taking strong interest in the two latest cases of ing other European countries, that con- GRA is now consulting on an Anti for an initial £72m to increase its global low 1 per cent of turnover compared alleged illegal protectionism in Europe, following flicts with European law outlawing pro- Money Laundering Code for approval share of the US$ 1.5bn online bingo with 15 per cent in the UK based on bet- tectionism”, explained Gibraltar’s head next year. market. It will pay the bingo and casino ting profits. Gaming is taxed in unexpected support by the European Court of of gambling regulation, Phill Brear. The Generic Code includes the operator, known for its Foxy Bingo web- Gibraltar on a similar ‘profit’ basis as 1 Justice (ECJ) for Portugal’s monopoly over gambling “A State monopoly can only be jus- introduction of cyclical Regulatory site, up to £24m more depending on per cent of gross gaming yield, both tified if it is found to be acting in the Returns, the formalisation of site and profit performance. local taxes being capped at £425,000. within its territory. public interest”, he told Gibraltar premises visits, and – critically Expectations for continued e-gam- However, Gibraltar will introduce a - the bespoke examination of local ing growth remain high: 888 Holdings 10 per cent Corporation Tax for all n a preliminary judgement, the because all gaming activity is controlled International. Declaring that “it’s time for legisla- arrangements. another local operator, sees a 20 per cent companies from January 2011 and it is Court in September found that by Santa Casa da Misericordia de bwin’s other joint chief executive, rise in online gambling next year as con- unclear at present how the tax on gam- “the Portuguese legislation consti- Lisboa, a 500-years old charity. tors to act” bwin’s joint chief executive Manfred Bodner said in a statement: “A Norbert Teufelberger, insisted: “Only a sumer confidence returns, according to ing companies then will be handled. The tutes a restriction on the freedom Now Holland’s attempt to restrict e- regulated online gaming market with a Chief Executive Officer Gigi Levy government is expected to publish its to provide services”, but main- gaming operators from operating in legal vacuum has emerged in the European gaming sector, because of the diversified and attractive line-up of In common with other gaming firms proposals for implementation of the flat Itained “that restrictions on the freedom competition with its national operators games will provide adequate security in Gibraltar, an element of growth will rate tax for debate in Parliament early rapid pace of technological progress. to provide services may be justified by is being challenged at the ECJ by two against the risks of a black market, come from running operations for other next year. overriding reasons relating to the public gaming companies, Gibraltar-licensed “Among other things, this is borne interest”. Ladbrokes and the UK’s Betfair and a out by over a dozen preliminary ruling That meant bwin, which employs decision is expected in November. proceedings still pending before the ECJ over 200 people in Gibraltar, could not “The Dutch situation allows active as well as numerous infringement pro- promote its services in Portugal under a marketing of gaming products by the ceedings against EU Member States 4-year sponsorship deal with the nation- State monopoly and any restriction on which the European Commission has so al professional football league (LPFP) internet gambling seems to be designed far put on hold.”

keeping your assets confidential Regulation’s contribution work incredibly hard keeping pace with proposals and developments in the PROFESSIONAL OFFSHORE AND ONSHORE COMPANY MANAGEMENT SERVICES industry, as well as ensuring consumer to success earns award interests across the world are properly WORLDWIDE FROM GIBRALTAR The Gambling Division of the Gibraltar recognised and protected. We are fortu- Regulatory Authority (GRA) has been nate to be in a position where we have awarded the prestigious ‘Regulator of top class operators and a regulator to the Year’ award by the management of match.” the World Online Gambling Law Phill Brear, the GRA’s head of gam- trust and company formation & management Report (WOGLR) magazine at its bling regulation received the award and yacht & marine registration annual conference in the UK. later added: “What we have in WOGLR is a UK based legal and Gibraltar is unique in the world in terms administrative & company secretarial services political commentary magazine with an of its quality and transparency, and we editorial panel of lawyers reaching from aim to keep it that way by working with Australia to Canada and the rest of the Government and the industry to keep world. our high standards.” “The responsibilities of regulators continued success and the success of the His team monitors the operations are rarely recognised, yet Gibraltar jurisdiction”, said managing editor, and arrangements of the gambling THE EUROPA GROUP hosts some of the largest and most Lindsey Greig. industry in Gibraltar, including online dynamic on-line operators in the world, Paul Canessa, Chief Executive of operators, the casino, betting shops and Watergardens 6, Suite 24, Gibraltar and their regulator is clearly making the GRA said: “We have a small team in gaming machines, to ensure they com- [email protected] a significant contribution to their the Gambling Division and I know they ply with relevant laws and regulations. www.europa.gi Financial Services Commission Licence No00108B Gibraltar Registration No 10511 Tel: +350 200 79013

24 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com www.gibraltarinternational.com GIBRALTAR INTERNATIONAL 25 PEOPLE AND PLACES PEOPLE AND PLACES An oasis... TV man arrives Stepping up Responsible for internal and Peter Isola, senior partner for member in his own right of the external communications for through GB Airways [now the past two years of contribute enormously to Colonial, ECS and Castle Trust Gibraltar Society of Chartered Jyske Bank group since 2004, sold to easyjet] he made a Gibraltar’s oldest law firm maintaining Gibraltar as a & Management Services are and Certified including the launch of a state major contribution to aviation, Isolas & Isolas, has been harmonious, diverse founder members of the Accountants, of the art TV station with the global travel industry and elected chairman of the Society and tolerant society”, Association. Gomez will continue daily broadcasts in English and Gibraltar tourism in particular. of Trust & Estate Practitioners she added at the third Erhardt said the firms are to be involved in Danish, 41 years old Lars His Bland Group was (STEP). ceremony of its type keen to maintain the financial services Aarup Jensen, has been described as “instrumental in Recognised as an expert in reputation of Gibraltar as one Excellentheld on The result Rock. appointed managing director financial services, corporate matters. in a busy world Gibraltar surviving the Spanish of the leading financial centres, Two students have of Jyske Bank (Gibraltar). and trust law, Isola is also Blight has economic blockade”, by which has seen “a rapid each been awarded Having started in the Gibraltar’s contributor to worked in Gibraltar bedrooms providing sea and air services increase in the demand for Kerry Blight £1,000 from the branch of the bank’s Head Tottel Publishing’s Planning for 18 years and has 104 Bedrooms and suites in a colonial to to relieve siege pension schemes and related Partners of office in Silkeborg, and Administration of served on the style all with a sea view conditions, carrying Moroccan services”. PricewaterhouseCoopers Denmark, he worked Offshore and Onshore Trusts Council as a workers to Gibraltar and He added: “We are keen Gibraltar (“PwC”) under its conference facilities in Corporate and its International Gibraltar Bankers’ Association supplying fresh fruit to ensure that we fully comply four years old Student Full upgraded conference facilities Banking for a decade Succession Laws. representative. In his new role, available for board meetings, training and vegetables. with all necessary standards Scholarship scheme designed to and had key account He is a past President of he plans to help ensure that courses and presentations At the same and regulations, both locally encourage and reward responsibility for Gibraltar Chamber of developments in the local time, he built a and internationally. We need to academic excellence. Internet some of the biggest Commerce. finance industry benefit not partnership with self-regulate where necessary Rebecca Gray and FREE Wireless broadband available corporations in just international customers, British Airways, and liaise with Government Christopher Torrilla have both throughout the hotel and an internet Scandinavia before but also the local corporate room for our guests to use maintaining the link bodies both inside and outside just started at Imperial , taking up and retail markets. with the UK Experienced Gibraltar in a seamless way.” London reading biology and weddings management of a Lars Aarup Jensen throughout those landing medicine respectively and will The Rock is an ideal wedding venue combined IT and difficult times for Rocio Fernandez has also receive a similar sum for whether it be a small intimate wedding communications operation become the British or large family gathering. We are also a Gibraltar. Around each of the next two academic developing the Group’s recognised venue for civil marriages Canepa and Xiberras were Airways airport years. Both students had websites and intranet. and ceremonies can now be conducted both recognised for public manager for gained four A level grades at in various parts of the hotel Jensen holds a diploma in service and services to politics, Gibraltar after a year ‘A’ Level. Business Administration and Swimming Pool the former having at one time in a similar position PwC Senior Partner, Colin Accounting from the Aarhus with BA in Alicante, About Outdoor swimming pool with pool been Chief Minister and Vaughan said that with over School of Business in Denmark side bar and pool side menu. We Leader of the Opposition, and where she developed 100 Partners and staff in and is married with three Rocio Fernandez welcome private pool membership, the latter also an Opposition collaborative and Gibraltar, the firm is a our lido club, with private pool hire young children. Leader strongly promoting professional relationships with significant employer of for parties and barbecues At the same time, Blight follows&“The Finance Industry is a Integration with Spain. key agencies and service graduates and annually recruits Nicholas Wright, has become Gomez major contributor to the Restaurant providers. graduates on training manager of business Leaving money Kerry Blight, former managing Gibraltar economy. It employs The restaurant has stunning views Her appointment comes as contracts. development at Jyske Bank laundering behind director of Royal Bank of thousands directly and over the bay. Our “house” menu is BA moved its Gibraltar route The firm also held its excellent value for three courses having worked for the Bank Mark Jason Bridge has been International in indirectly, and supports both from London Gatwick to third and most successful including an aperitif Manzanilla, since 1990 and until recently appointed General Manager of Gibraltar, has been elected international and local olives and coffee. A full á la carte Heathrow and she will be annual “PwC Experience” day served as an officer in the Europa Trust, succeeding Chairman of the Finance customers with their financial menu along with a superb eclectic looking to build on the seminar on how all staff could wine list is also available Royal Gibraltar Regiment’s Jessica Mila Schutzman, who Centre Council, the needs”, Blight said. experience gained at Alicante contribute to achieving territorial element. after four years returned for representative body that and a number of other competitive distinctiveness, wisteria terrace personal reasons to her native advises government on the airports. We’re British using “10 small things” in The Wisteria Terrace for lunches, . sector’s progress and needs. dinner, barbecues, afternoon teas, Over 100 people have been everyday behaviour to Offering on-shore and off- He took over from Emilio evening drinks and informal dining presented with a certificate improve client perceptions. shore company services Gomez, who held the position Exceptional services Working for confirming their British Having previously Barbary bar worldwide, Europa promoted since February 2005 and The Medallion of Honour has pensions Citizenship having sworn an focussed on business Barbary Bar and terrace for a 34 years old Bridge from being served as sector representative been bestowed on four David Erhardt, Pensions oath of allegiance at a development and interaction relaxing drink and for the wine Legal Advisor & Money from the Council’s inception buff, a choice of nine wines by Gibraltarians - Jose Netto, Director of STM Fidecs Life, Gibraltar ceremony led by with PwC’s international Laundering Reporting Officer. 13 years ago. “I felt that the the glass , Joeseph Health & Pensions, has been Deputy Governor, Lesley network, “this year we’ve In South Africa he was a time had come to let someone Gaggero and Maurice Xiberras elected chairman of the new Pallett. concentrated on our people in Lounges private practice attorney, else get involved on a full time - for the “exceptional” service Association of Pension Fund She said that “gaining Gibraltar, asking them to think Take a good old fashioned English before re-qualifying in 2004 as basis”, said Gomez, who has and contribution they had Administrators (APFA) in British Citizenship is a about their roles in the tea in one of the spacious lounges a solicitor in the UK, where he been central to liaison with each made to the interests of Gibraltar that provides a significant moment in your practice, how challenging they worked for the Official Government, on key taxation Gibraltar. forum to promote best practice lives which should be found their work and what it Receiver, the litigation teams issues. Gaggero’s was singled out amongst local firms involved in celebrated” and reminded the meant to work for PwC”, of two London boroughs and However, as for services to aviation, pension scheme administration new citizens that they had explained partner, Chris for more than three years, the representative of an insurance Europa Road, Gibraltar shipping, business and and operation. responsibilities as well as Pitaluga. Financial Services company on the Gibraltar Tel: +350 200 73000 commerce. He headed the Hassans, Capurro acquiring certain rights. Compensation Scheme. Insurance Association and a Fax: +350 200 73513 Bland Group for 60 years and Insurance, London and “I am sure all of you will E-mail: [email protected] www.rockhotelgibraltar.com

26 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com www.gibraltarinternational.com GIBRALTAR INTERNATIONAL 27 INVESTMENT Low inflation brings opportunity in corporate bonds good part of 2010. Recent economic indicators confirmed stabilization of The labour market confirms the the global economy, but the big question according to picture - wage increases have slowed to a halt in most places, and given mounting Ib Fredslund Madsen, chief economist at Danish unemployment, this development is Jyske Bank, is what follows when the stock unlikely to change soon. All things considered, there is no replenishment and stimulus effects fade out? reason to fear inflation for the next 1-2 years, and a better risk/return ratio for he prospects of growth in bonds than for equities can be expected. financial markets for the Yet we switched out of developed- short term are mainly driven for the short term helps to support market bonds into high-yield Bonds by the dynamics of stock demand (the scrap bonus offered to US immediately after Lehman’s collapse in replenishment and the big car owners being the most obvious the autumn of 2008. We saw near- monetaryT and fiscal stimuli. example) and the notorious effect of collapse in the market for corporate However, there still is a big risk that companies stepping up production for bonds, and this illiquidity prompted us to demand is unable to then act as a growth the short term to replenish stocks. adopt a very cautious approach to high- engine. For this to lead to a lasting upturn, it yield bonds. The big uncertainty over what the is necessary that demand also shows Since then, the market has been future will bring in itself is enough for us signs of lasting improvement, and con- improving, and systemic risks have been to maintain a defensive portfolio. Seeing cerns over that remain. Encouraging thrust into the background. no reason to fear inflation at present in signs on the production side, have not view of the deflationary forces which been matched on the demand side in the continue to persist, we still prefer bonds Western world to equities on the strength of a risk/return In the US, we can expect to seeMove to normalisation consideration. continuing negative growth in householdThis provides an opportunity to take the Yet we can take advantage of the debt in view of rising unemployment, thenext step towards normalisation of our normalisation process in the credit mar- falling rate of wage increases, and aportfolio, by raising the proportion of kets to raise the allocation of high-yield heavy fall in asset values. high-yield bonds to neutral and reducing bonds to neutral, and lower the alloca- The supply and demand for loans aredeveloped-market bonds, preferring cor- tion of developed-market bonds – in falling, since banks continue to tightenporate bonds to emerging-market bonds favour mainly of corporate bonds. their lending conditions and overall con-among high-yield assets, despite their The economic indicators point to sumer spending is expected to remainimpressive performance. positive growth in Q3; the US will prob- weak for a long time yet. Corporate bonds are an asset class ably follow Germany, France and others All things considered, the upturnoffering fair risk-adjusted returns both at and leave recession behind. should be regarded as somewhat luke-the end of a recession and the beginning Global business confidence paints warm - and a return to recession cannotof an upturn. almost the same picture after a plunge in be ruled out! Equities and emerging-market the wake of Lehman’s failure, recent A defensive portfolio allocationbonds, for instance, depend more on the months have seen solid increases. might best be retained. economy confirming that the upturn is Financial markets seem to anticipate getting a firm hold. This asset class still an early return to growth, and risky No early inflation holds value, although the credit spreads assets have continued to perform well. While indicating that strong weight have already narrowed considerably. However, bond yields have not risen, should be given to interest-bearing instru- Increasing the proportion of corpo- despite fair price rises of equities. ments in a portfolio, it might mean the rate bonds in a portfolio adds value opposite, if there is a fear of inflation. strategically in the long run - and given Yet deflationary, rather than continued uncertainty on economic inflationary, forces dominate. There are development, this may also be seen as a Stabilised faster simply such big idle resources in the protective hedge against the possibility of The economy has stabilised much faster economy that we cannot imagine infla- economic growth actually materialising than expected, but it matters not whether tion to be a problem in the foreseeable faster than expected. the recession has technically ended or future, expansionary monetary policy not; more on whether we are in for an notwithstanding. There is a close historical correlation early return to potential growth. Based on a recent Jyske Bank between capacity utilisation and changes So far, the stabilisation of growth has presentation to business professionals been driven mainly by two factors: in inflation 18 months later, and this points to lower inflation for a in Gibraltar on “the big picture”. monetary and fiscal-policy easing, which see also “Equities Place to be” page 14

www.gibraltarinternational.com GIBRALTAR INTERNATIONAL 29 BAR RESTAURANT LAST WORD 14 On the Quay sounds a bit like going to work. Modern Mediterranean Maybe the solution can be found by dining Getting it half right dividing in two the things I do at work - Restaurant the things I like doing and the things I do Tony Tanner has been thinking that he might like to not. I know this is selfish but at my age take semi-retirement, but what does he imagine maybe that is allowed. So if I was lucky enough to semi- semi-retirement will be? retire and on the work front had only to do the things I enjoy, I still have to here are a lot of questions I end but not quite! When I retire I want decide what to do with the retired half. keep asking myself and need to feel I made it to the final, that I won The danger is if I don’t have a plan I’ll to sort out first. I know the and therefore there is no further to go. slip into doing the jobs-around-the- dictionary explanation of Semi can also be a prefix for almost. I do house syndrome. semi is half but which half? not want to be an almost man, I want to Agatha Christie’s Hercule Poirot InT my life to date I recall two semis: 1) be the full product. frequently referrers to ‘using the little being a semi-professional musician and Colleagues who have retired tell me grey cells’. I believe that retirement time 2) the first house I bought was semi- they are so busy they do not know how should be spent keeping the brain work- detached. they ever had time to work. They tell me ing and if you do that the body will fol- Business lunches So why was I only a semi-profes- they are doing all the jobs around the low. sional musician and not a full profes- house that their wife has been demand- I like writing so maybe I should a speciality sional? Was it because I was not good ing for years - and they are playing golf start that book which is said to be inside Unit 14, Queensway Quay enough to be a full time professional five days a week. all of us - you may not think that is such Gibraltar 54 Irish Town, Gibraltar (maybe) or was it because I liked my a good idea after reading this. Or maybe open:10am-late music, but wanted to develop in business I could launch a web-site called “ face- Opening hours closed Sundays + Saturday lunch as well. Probably the latter but you can back”. Retirement would be a great time 12.30pm-11.00pm, last orders 10.45pm never be sure. “retirement time should to meet up with all those friends I have Tel: +(350) 200 51738 Business has also been good to me lost touch with over the years. Tel: +(350) 200 43731 ROJO CAFE to reserve a table so it did not matter which I chose, but if be spent keeping the My older sister has just got her I get semi-retirement wrong that will degree from the Open University, having probably be for the rest of my life! brain working and the married young, she now has the time to I purchased a semi-detached house, body will follow fill in the gaps she felt existed in her life. because I could not afford the other half I do not want to do a degree, but retire- and I was delighted to have a semi, ment as a time in life to fill in the gaps because that was more than the terraced My problem is I do not like doing makes a lot of sense. house I had lived in as a child. So in that jobs around the house and would” rather I’ve been fortunate enough in busi- case, semi was the full circle. work to earn the money to pay other ness to have gone half (or should I say Other everyday semis include semi- people to do them. If I was semi-retired semi) way round the world. Yes, there skimmed milk - but the half that has would the half that was retired be are places I would like to visit and cer- been taken away is the rich part. I cer- expected to do these jobs? tainly will include them on the itinerary. tainly do not want the rich part, or to be That is not what I have in mind. I However the most important thing more precise, the semi rich part, to be like my golf, but I will never be a Tiger is for my tomb stone not to read: “Here taken away when I retire. Woods. Also would I want to play with lies a semi man”. I need the years left to Semi-final - almost made it to the the same people five days a week - that complete the circle!

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