Gp26 IInsuranBce Rp1A6 InvestmenLt TFebA/March/ARpril 2011 INTERNATIONAL FINANCE AND BUSINESS

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www.gibraltarinternational.com GIBRALTAR INTERNATIONAL 3 Feb/March/April 2011 EDITORIAL COMMENT Volume 17/ Number 1 Having the power to cut! ibraltar’s energy policy – prompted by EU demands - is to produce by around 2015 as much electricity as possible from sustainable Contents Gresources, whilst at the same time cutting demand for power. However, after two years of a five NEWS P6-10 year energy efficiency plan, very little seems to have been Six on QROPS free transfer list achieved! An updated plan is imminent. There is an urgency to Taxing times find solutions and to take action, given that The Rock’s Hotel ‘under-supply’ prompts fresh competition fuel costs already are comparatively high and oil prices Very Low Risk Gibraltar destined to keep rising. The government has had little choice but to invest in MONEY P12 a £100m fossil fuel power station to replace three ageing generating plants in 2014, but by around 2040 when the Making money proving popular time comes for it to be decommissioned, world oil stocks will have declined and prices generally higher as a result. TAXATION P14 It is unrealistic for Gibraltar to even try to be a Laughing all the way to the bank significant producer of sustainable power, there being insufficient land for large scale solar or wind power INVESTMENT P16 equipment: last summer the government was keen on A Place for All Seasons utilising wave technology, a fledgling technology that has not been commercially adopted anywhere in the world. BANKING P18 Offshore wind turbines remain a possibility. Some believe it is received wisdom that Gibraltar Banks have essential role to play in supporting growth should be self sufficient in power generation, but that’s because few want to risk electricity supplies coming from PROFILE P22 or through . But thinking laterally, couldn’t a supply Gibtelecom’s chief executive Tim Bristow preparing for cable come instead from say, Portugal or even , new revenue streams from overseas and locally, just as telecommunications cables traverse the globe? Hopefully, the new government report will show the INSURANCE P26 way forward; the pace should not be set by individuals and private sector companies. An opportunity was missed to Insurers have Latin America and Spanish business incorporate large solar panels on the roof of the new captives in their sights airport terminal now nearing completion, but urgent efforts could be made for a solar retro fit! BUSINESS ROUND UP P28 And why not incentify individual homeowners and freeholders of apartment and office blocks with cash or tax rebates to install solar panels or heat exchangers instead of relying on goodwill and feelings of social responsibility to reduce demand? GIBRALTAR INTERNATIONAL MAGAZINE In large measure, the government is relying on a so far undelivered “concerted media campaign” and a range of Published by Gibraltar The publishers have tried to International Publications Ltd . ensure that all information is literature to reduce electricity demand. But it takes years 20 Engineer Lane accurate, but emphasise that to change attitudes and lifestyle choices. Suite 6/PMB 104 they cannot accept The government says it will lead by example through PO Box 561, Gibraltar responsibility for any errors or “cost-effective measures that yield the greatest energy omissions. The publishers Editor accept no responsibility for savings in the shortest time spans”. As Lester says [email protected] statements made by however, that may mean greater up-front costs to reap contributors or for any claim longer term reward. Use of low energy halogen light bulbs Sales made in an advertisement. [email protected] throughout government and public buildings would be a Gibraltar International good start – if we are serious about reducing demand! Design Magazine is available on Referring to investment for the future, Chief Minister [email protected] subscription, 4 issues posted ’s New Year message notes that “leadership to: UK £24 - EU £32 - UK Agent: Rest of World £44. is partly about vision; an understanding of what ensuring Tel: 0044 (0) 1993 703560 Gibraltar’s success in the future requires you to do now, © 2011 Gibraltar International and the foresight and courage to do it”. Energy policy is Publications Ltd. an area where any future government in this General No part of this publication may be reproduced without the written Election year can make meaningful Manifesto promises. permission of the publishers. Ray Spencer

4 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com NEWS Six on QROPS free transfer list Tired of waiting for established providers it has latest in Malta – “a move the QROPS, so agreement between HM vetted for standards of jurisdiction that has just transfers between any of the Revenue & Customs and the service and conditions in been accepted by HMRC Q-Wrap schemes is free Gibraltar Government over other jurisdictions, rather after two years of when many other suppliers acceptability of the than accept them in negotiation, so it must by charge up to £6,000! jurisdiction for UK pension Gibraltar at this stage. definition incorporate the Guernsey accounts for schemes to be relocated for “We are Gibraltar-based latest UK Revenue thinking around 90 per cent of non-residents, one local firm and feel sad that the territory on how QROPS should QROPS administration, “but has launched a pioneering is losing out on handling operate”, he explained. that is starting to change”, scheme giving a choice of potentially billions of pounds The new scheme had Erhardt noted, saying: “The management in at least six of investments that would also been prompted by number of enquiries received countries. come from the pension Erhardt’s concern at the lack about our QROPS has The move to create the schemes transferred by ex- of choice provided by many quadrupled and we have at multi-jurisdictional Q-Wrap patriots”, he said. QROPS UK and other Independent least a 50 per cent success scheme was prompted by provide benefits and greater Financial Advisors, who rate. “the significant loss of flexibility over UK-based tended to use only one or “It’s not just about being business resulting from our schemes. two schemes and the cheapest supplier, feeling unable to transfer jurisdictions for all their although our charges have personal pensions under the Remove clients that might not give been reduced; most High Net QROPS [Qualifying uncertainty the best, or most cost Worth Individuals are Recognised Overseas Pension “We have tried our hardest effective, solution. looking also for standards of schemes] arrangement, while to get a resolution of this “It’s crucial that a service and quality of there remains uncertainty matter to remove uncertainty, QROPS be held in a place advice.” over whether HMRC will but after voluntarily that works most efficiently If and when the disallow them if the funds suspending QROPS transfers with the taxation system of Gibraltar situation is sorted are administered in Gibraltar to Gibraltar, along with the country in which an out, then pension managers because no tax is paid locally other local pension individual lives and where will again promote QROPS on pension income”. providers, in mid-2009, we there is a double taxation in the jurisdiction. “As of STM Fidecs managing cannot wait around any agreement,” Erhardt now, most people who director for pensions, David longer”, Erhardt added. declared. wanted to transfer here are Erhardt, told Gibraltar The Fidecs schemes are If the place of residency, going to our Malta scheme, International that his firm in Jersey, Guernsey, Isle of taxation or legislation at least for the interim instead will use affiliated Man, New Zealand and relating to QROPS changes, period”, reported David companies and other Switzerland, as well as the it might also be desirable to Erhardt.

The exact effect on exempt - and for Taxing times Gibraltar’s revenue of more e-gaming businesses, so none than halving business tax at are expected to desert the Taking a leaf out of whereas in the UK Chancellor the same time as removing territory as a result. Gibraltar’s success with George Osborne wants to the previous privileged ‘zero’ Victor Chandlers told reducing company tax from change rules that had "driven rate for some relocating Gibraltar International it 22 per cent to a low headline business overseas", as well as companies – including some would be “too expensive” to rate of 10 per cent from lowering the large company private banks, insurers and e- vacate The Rock, and January, the UK coalition rate from 28 to 24 per cent gaming firms – is uncertain, PartyGaming - which is to government is aiming “to over five years! but the government is hoping join Austria’s bwin create the most competitive He made the point: for the move to be broadly imminently to create the corporate tax regime in the “Corporation tax rates are ‘tax neutral’. world’s largest on-line G20.” compared around the world, But exemptions and gaming business - said it The aim in Gibraltar is and low rates act as adverts other factors will cut the had “factored in” the to attract investment and for the countries that headline rate for insurers – increase to keep its Gibraltar companies to relocate, introduce them…” interest from premiums is tax headquarters.

6 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com NEWS

tal measures meant a greater Hotel ‘under-supply’ up-front investment, he said, whereas “building budget hotels means getting a budget prompts fresh competition building”! Mixed messages on the scope for increasing hotel occupancy Low carbon footprint are resulting from one chain’s plan to establish a new hotel in With that in mind the Lester Gibraltar, writes Ray Spencer . And expected price competition hotel will be designed as envi - could also reduce income for existing hoteliers! ronmentally friendly as possi - ble to minimise the building’s Simon Lester, chairman of Outline planning permis - carbon footprint. “It’s our Hertfordshire-based Lester sion was granted in greatest challenge; we are for Hotels Group, sees the November and detailed example, looking at the use of territory as ideal for his £25m approval is expected in March solar and external hot air for project, maintaining “hotel so that the roughly 2-year water heating, low-energy demand massively exceeds work programme can begin in LED lighting, possibly having supply”. With a home in late summer. only showers that use consid - Sotogrande, he knows The erably less water than baths, Rock well, pointing out that Next generation and salt water for toilets – there has been no new hotels “This will be a next genera - water is very expensive,” he built there for 32 years. tion hotel – a premium budg - Simon Lester, Lester Hotels explained. He told Gibraltar et, limited service, property – chairman All three of Gibraltar’s 4- International the territory had with an entry price per room Gibraltar Yacht Club site; star hotels have had aspira - also been chosen for the just below £100 at today’s delays in securing sufficient tions to develop their busi - Group’s ninth mid -market prices; for example, although finance for the £45m project nesses for at least three years, hotel and first outside of the 4-star standard rooms, there are understood to have been but none has been advanced, UK, because “the economy is won’t be 24 hour room serv - overcome and work is likely despite two projects having growing, new companies are ice, nor a swimming pool, but to start later this year. A planning permission. moving to Gibraltar every possibly a small spa and cer - Squarestone spokesman said A 25 per cent extension year and the new airport tainly a small gymnasium,” as Gibraltar International of the 151 room terminal will create more Lester explained. went to press that the compa - at “has been put traffic”. Known as a ‘tactical ny was “at a sensitive stage in on ice, because the market is negotiations”. not growing at present.” The government’s latest Funds available published figures for six Funding for the Lester project hotels and three holiday will be “a mix of private equi - apartment complexes, show ty and bank loans that have overall room occupancy levels been offered and agreed in falling over five years to end- principle subject to normal 2009 from 68.6 to 57.4 per caveats – I don’t foresee any cent, while the average stay problems, however”, said for all visitors, tourist and Artists impression of proposed Lester Hotel, next to the new multi-storey Lester, who has been 25 years business people, has remained car park. in hotel management and 12 fairly constant at 3 nights. Combining two sites on marketeer’, Lester’s approach years with his own company. 2010 results are expected in Devil’s Tower Road just to the runs in the face of reported Described also as a “seri - February. south of the airport runway, experience by existing hote - al entrepreneur”, Lester said Caleta General Manager the project consists of a liers that describe maintaining the mix of offices, hotel Franco Ostuni, explained: ground floor Hub of recep - occupancy levels last year as rooms and public facilities “The reality is that we are not tion, coffee shop, bistro and generally ‘tough’ with the would provide cross-over sup - running at 80 per cent occu - bar, three 1,000 m2 floors of price achieved per room being port when needed. He added: pancy, so there is not the pres - offices and 160 bedrooms on squeezed. “We are in this for the long sure” and with high building nine floors, including a top Squarestone, a UK prop - term as hotel operators, costs “the demand is not there level where each bedroom has erty developer, proposes to unlike developers who usually to justify the investment”. an adjoining lounge that build a 200-bedroom Hilton want to make a profit by sell - converts to a boardroom for to become the territory’s first ing as soon as they can.” executive meetings. 5-star hotel at the Royal Embracing environmen - Continued P20

8 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com NEWS Very Low Risk Gibraltar Insurance-rating and information experts A.M. Best have assessed Gibraltar as a country with very low levels of economic, political and financial system risk. This supports the strong position Gibraltar has secured during these times of financial insecurity and makes it a great place to do business, as Dustin Orfila from the InvestGibraltar Office explains.

The global economy is still uine investor that chooses to (EEA), goods and services can licking the wounds inflicted make Gibraltar their place of be freely traded within the by the previous pecuniary business. European Union (EU). downturn and, though show - To confirm Gibraltar as a ing hints of a recovery, safe and secure location, the Political Risk: progress has become hesitant A.M. Best Company, a world - Very Low at best in the face of further wide insurance-rating and l Gibraltar is a self-govern - financial instability. Gibraltar, information agency with ing British overseas territory. in contrast, seems to be found more than 100 years of histo - The main - watching the latest crisis ry, gauged Gibraltar as very tains responsibility for unfold from the safety of its low risk. According to defence, foreign relations, sound and secure shores. The their Country’s Risk Report, internal security and financial economy of this modern, Gibraltar is rated as a CRT-1 stability. vibrant, low-tax jurisdiction country, with very low levels l Tensions between the has continued to flourish of economic, political and United Kingdom and Spain amid such troubled times, financial system risk. They over Gibraltar lasted for with steady 5% growth over have ranked it in this way, for many years, however, all the last two years. the following reasons: countries reached an agree - The Government attrib - ment in 2006 and a new con - utes Gibraltar’s successful Economic Risk: stitution went into effect in performance to its commit - Very Low Gibraltar in 2007. ment to policies that develop l Gibraltar’s economy is and sustain a robust environ - small and based on tourism, Financial System ment that promotes increased financial services and ship - Risk: Very Low levels of business activity and ping, with each sector con - l The Financial Services investor confidence. It also tributing more than 25% of Commission (FSC) regulates For more information on praises the private sector for gross domestic product all financial services in why assessors, entrepreneurs its entrepreneurial spirit, (GDP). Gibraltar, including insur - and businesses alike deem resourcefulness and compe - l The financial and other ance. Gibraltar a very low risk tence. The Government con - corporate sectors benefit from l Gibraltar is a financial cen - platform for success, please tinues to support innovation no capital gains tax. tre. Several British and inter - contact the InvestGibraltar and diversity by providing an Furthermore, as a member of national banks have opera - Office, Tel: +350 20052634, ‘open door’ policy to any gen - the European Economic Area tions based in Gibraltar. [email protected]

Energy Beyond 2040 Symposium Tidal Energy could be difficult due to the large space required and the costly The Energy Beyond 2040 Symposium, ‘How will we power Gibraltar expense of maintaining them.’ Dr. organised by the Gibraltar Group of beyond 2040?’ asked, Xavier Pons, chair - Burton believed that the answer lay in Professional Engineers, was held on man of the GCPE, in his opening com - diesel generators powered by renewable November 18th 2010. It focused on ments. sources, such as biodiesel, a fuel made renewable energy sources which could be Dr. Nigel Burton, president of from plants. used for Gibraltar’s electricity supply in the Institution of Engineering and During the symposium, Juan Gari of the future. Technology, in the UK, followed with, the Atlantis Resources Corporation, The Gibraltar Government is cur - ‘This could be a great challenge for explained a fascinating project of produc - rently building a new diesel power sta - Gibraltar, as it completely relies on oil for ing energy from underwater tidal tion and its operational lifespan will last its power supply, and using eco-sustain - turbines, as marine tides are certainly not approximately until the year 2040. able sources, such as: Solar, Wind and lacking in Gibraltar.

10 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com MONEY Making money proving popular For the second time in a decade, a £5 coin has been introduced as part of a general overhaul of Gibraltar’s currency that also sees the first £100 note in circulation, writes Ray Spencer

Although the first £5 coin 1914 - the present series approved of the description of proved unpopular and was having been in issue for six Her Majesty on coinage as quietly withdrawn from use, years. “Queen of” the issuing coun - the Finance Ministry Treasury The turnover of Gibraltar try in her Realm. Department suspects that it currency notes - that is the One side of the coin will today be “more useful and issue and redemption of cur - depicts the effigy of Her durable than the equivalent rency notes by the banks - is Majesty with the words value paper note”. around £35m a year. “The “Elizabeth II Queen of Nevertheless, the £5 currency notes issued for cir - Gibraltar” and the year; the denomination note is the most culation and their denomina - other side depicts the Rock of popular and remains in this tions is driven by demand; the Gibraltar with the words latest series of paper money £100 note will provide further “Gibraltar” above it. that also includes replacements choice in the denominations The 4,600 new £5 coins for the existing £10, £20 and available”, the Treasury says. introduced last summer are £50 notes at an estimated cost The value of notes in cir - described by the Treasury as in 2010/11 of £670,000. culation currently stands at “much more attractive and The £10 and £50 currency around £24m with each easier to carry, being much notes were released last sum - pound backed by a correspon - smaller and lighter than the mer, but the new £5, £20 and ding deposit in the Bank of previous £5 coins”. £100 notes will appear in April England (BOE) earning inter - The fact that it is the first 2011. est related to the BOE Base coin to depict Her Majesty as Gibraltar currency is pro - Rate. Currently that produces ‘Queen of Gibraltar’ should duced under contract by two praised this latest series of around £30,000 pa, and is also make it popular and UK firms, Tower Mint and notes for their overall security described as “an important attractive to collectors. The Westminster Mint. and practicality features. source of income for the UK has a commemorative £5 The moves have been They incorporate tactile Government”. coin, but none in general prompted on grounds both of features for the blind and visu - The Queen is described circulation, as yet. practicality – the notes are ally impaired and have espe - on the new non-tarnishing £5 A new booklet on the cur - described as having “a more cially reinforced corners to coin as “Queen of Gibraltar”. rency notes and their themes is modern look and the quality of ensure durability. But the It is the first time that available at the government the paper enhanced to ensure security features also become Buckingham Palace has web site www.gibraltar.gov.gi. greater durability” – and also visible under light and water - there are updated security fea - marks are used. tures with the latest technolog - The reverse of each of the Fifteen for Sterling ical developments. banknotes carries images of Gibraltar currency has been described as ‘Sterling’ currency since It was a timely move in Gibraltar through the ages. 1995 when the term was added after the value on notes in the “AA” respect of the notes. In mid- The £5 note shows the series, one of ten so far introduced over the past 96 years. August, the Royal Gibraltar ; the £10 note The first currency was introduced in August 1914 when there were three series of paper money in circulation with pre-decimal val - Police issued a warning that has a scene from the Great ues from two shillings to £50. they had identified “a recent Siege of 1779-1783 and the Gibraltar’s notes and coins are legal tender only within the increase of counterfeit bank £20 note depicts HMS Victory territory, although in practice banks and others in the UK accept the notes”; in particular, counter - returning to Gibraltar in 1805. territory’s notes, sometimes discounting the value by a few pence feit The £50 shows Casemates as a form of ‘handling’ charge for the currency to be returned £10 notes, of both the old and Square as it is today, while the periodically to Gibraltar. new denomination! £100 note depicts the Kings “Every so often there is an exercise involving local banks and major businesses to get UK currency out of circulation, but there is Copies of the new notes, Bastion Leisure Centre. nothing similar planned at present”, a Finance Ministry spokesman according to an RGP Whenever there is a explained. spokesman, were “poor quali - decline in stock levels, the Despite being part of the EU, the UK and Gibraltar with it, did not ty” and did not include the government re-prints or prints become part of the European Monetary Union and adopt the Euro latest holographs. Currency new sets of currency notes – from 2002 . printer de la Rue reportedly there has been ten series since

12 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com TAXATION Laughing all the way to the bank can be conducted in anonymity through Monies hoarded away in your tax adviser. offshore or overseas bank By coming forward under the LDF, accounts prior to September 1st UK taxpayers are able to take advantage of a number of special terms including a 2009 may well qualify for 10% fixed penalty on underpaid liabili - inclusion under the UK tax ties, no penalty where an innocent error has been made, recovery of UK taxes disclosure facility known as the limited to accounting periods commenc - ‘LDF’, writes Sean Wakeman , ing on or after 1 April 1999 and a guarantee from HMRC that a full, Tax Investigations Partner, Crowe accurate and unprompted disclosure will Clark Whitehill LLP not lead to a criminal prosecution. Astonishingly, this is not classified as a tax avoidance scheme or an aggres - he Liechtenstein Disclosure - but with more dire consequences for sive use of a loophole in any way. The Facility (LDF) was designed those individuals than if the information LDF is an above board and transparent to make legal the assets was volunteered under the LDF amnesty facility to report previously undeclared of individuals held in in the first place. income and gains. Liechtenstein and by default, Instead of a fine and a clean bill of Tbring in from the cold some of the health, that same individual could be Example estimated £80 billion of undeclared facing a criminal investigation in years Let’s take an example of how tax might overseas assets held by UK residents. to come. add up on a previously undeclared over - Despite this generous offering by seas bank account. HM Revenue and Customs (HMRC), The Liechtenstein Let’s say £1m was deposited in an fewer than a thousand people have come Disclosure Facility overseas bank account 20 years ago. forward so far to take advantage of this Explained That account earned interest at an facility. If you’re new to this subject, you’d be average rate of 5% per annum. It would seem that people have forgiven for wondering what the Neither the interest nor the account either not understood the opportunity “Liechtenstein Disclosure Facility” has been declared for UK tax purposes being presented to them, or are afraid of actually is. and there are no other complications disclosure. In its strictest sense, the LDF allows such as undeclared business profits taxpayers with unpaid tax, linked to entering into the equation. The Second Declaration investments or assets in Liechtenstein, to Tax on 20 years of accrued bank On November 10th 2010, HMRC settle their tax liability under this special interest (say £1.4m) would normally published a second declaration on this arrangement. amount to £560,000. Interest on top of subject which has the appearance of The LDF runs from 1 September this adds a further £392,000, plus a being both a carrot and a stick to those 2009 until 31 March 2015 - allowing penalty of £224,000 (possibly more), who haven’t come forward yet. taxpayers five years to put their affairs bringing the total liability to HMRC to The International Tax Enforcement in order. £1.176m. (Liechtenstein) Order, SI 2010/2678, By default however, the facility cre - Under the LDF, the tax due is includes greater clarification of what ates a lesser known opportunity where £280,000 plus a 10% penalty (£28k) constitutes ‘relevant property’ under the an individual who has undeclared and interest is only £99,000 as the early LDF, as well as bringing into effect an monies in any offshore or overseas bank 1990’s, when interest rates were very agreement for the exchange of informa - accounts anywhere in the world to come high, drop out. tion between the UK and Liechtenstein. forward (e.g. Gibraltar, Panama, Total due is £407,000, resulting in a This exchange of information will Singapore etc). saving of £769,000. eventually expand to include other over - This is an area that requires special - Clearly, taking the LDF route is seas havens with discussions already ist advice because the use of preferable and eliminates the risk of underway in many countries including Liechtenstein to declare other interna - future prosecution or liability. Switzerland. tional assets will need to be registered For more informtion on this In effect, we now have a situation with HMRC first. However, this is cur - subject go to www.hmrc.gov.uk/ that if people with undeclared overseas rently being done, and with the HMRC’s disclosure/liechtenstein-disclosure.htm assets don’t come forward, they could blessing. Or contact Sean Wakeman, find that information regarding their The beauty of the facility is that any Tel +44 (0)20 7842 7285 assets makes its way to HMRC anyhow preliminary discussions with HMRC Email [email protected]

14 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com INVESTMENT INVESTMENT

a quarter to a twelfth fractions – a month’s returns to London on 17-18 February 2011 . implemented across the European Union usage for a twelfth share, three months for Geoff Hadwick, Editorial Director of by 23rd February 2011. A Place for All Seasons a quarter share and so on. the Overseas Property Professional Group He says, "The implications could be As Ioannis Verdelis, Senior Consultant says the sector is still being held back by a far reaching as many fractional develop - at leading fractional consultancy The Best lack of funding and a lack of understand - ments did not fall within the scope of the Fractional property spotlight: Group notes, “With the current dynamics ing, especially in Europe (the concept is first directive which regulated timeshare of the property market being the lack of known and accepted in the US). sales or perhaps fell into what could be Lifestyle purchase or bricks and mortar investment? finance and confidence, we have seen a “In Europe, overseas property agents called "grey areas" where they were outside Once upon a time, not that long ago, it was the early adopters who embraced the number of property buyers considering and developers have a lot of educational the provisions of the law". (See fractionals as a way in which they can still work to do in the next few years to make www.fsota.org for more information). fractional lifestyle, spotting a trend that grew into a new way to own a holiday home. enjoy fine assets at a lower price. We have buyers feel safe and confident that investing Now, as the fractional ownership story goes more mainstream, one question many are been working with a number of developers, in a fractional development is a good, long- including some very well known names, term idea,” he says, but adds, “Fractional asking is, is it a lifestyle purchase or alternative property investment - or both? and so we can say with some confidence ownership is an idea whose time is Fiona Klonarides finds out. that fractional ownership is now really coming.” catching the eye of the property industry ith the global economic forecast a more flexible, affordable solution. The too”. Getting in (and out) for the foreseeable future still best fractional properties are often part of With fractionals, the beauty is in the Banks are gradually starting to come veiled in a mist of uncertainty, five-star resorts, complete with extras such details. Glossy brochures may help sell the around, so many developers have had to Wconflicting real estate predic - as 24 hr concierge service. Just as impor - dream but with so many options out there, provide financing themselves. And what if tions abound. Spain’s property sales have tant as what you get is what you don’t – from NetJets to Napa Valley wineries, you want to sell your share, can you? And been sliding downwards - although recent headaches like leaks, repairs and pool scouring the fine print is essential. when? Developers are now marketing reports are a bit brighter - while in other maintenance are normally overseen by the properties that offer built-in exit strategies; parts of Europe, multi-million euro estates management company for an annual fee. Do your homework if your property’s value has risen when you The Hideaways Club, Asmara, Indonesia are being marketed with knock-down price Piers Brown of Fractional Life www. sell, you’ll gain – perhaps not a huge tags. The Hideaways Club fractionallife.com says it’s important to do amount but it has paid its way in happy Fractional developments used as holi - On the shinier side of the coin, last The Gibraltar-registered Hideaways Club is The Hideaways Club, Chalet Lune, Switzerland your research: holiday currency. day homes are not usually SIPP compliant, October Halifax reported sales of London’s one of Europe’s most exclusive private resi - “Do your homework. There is a And with 365 days in the year, what if but Guy Tollhurst, Managing Director at £1 million-plus homes (which make up dence clubs. More than a five star destina - Africa, South Africa, Mauritius and South bewildering variety of product on offer – each family wants the same Sardinian villa Intelligent Partnership, who specialises in approximately 4.5% of the city’s proper - tion club, members own equity in The East Asia…ski chalets in Switzerland and including timeshare masquerading as frac - for the school holidays? Rotating calendars this field says they do exist, one example ties) were up 118% for January - June 2010 Club’s hand-picked international property mansions in Morocco, all for a lead-in tional ownership – so it's essential to are among the ways to slice the time more being Caracola Beach & Spa Resort on Isla compared to 2009. portfolio. membership fee of £132.500 to 250,000 choose the right one for you. Think about fairly. Margarita in the Caribbean. And while big spenders, Chairman Mike Balfour (giving three to six weeks exclusive usage your lifestyle and/or investment needs and Buying a slice of the property pie has With an established market in America many of them foreign, have explains, “Hideaways Club every year). Hideaways properties are serv - try to find a scheme that fits in best with its advantages. Funds permitting, you could and developments mushrooming in Europe, been boosting the property members not only have the iced by their own concierge who oversees that in terms of location, number of weeks, be in Paris in Spring, Sotogrande for Egypt and Dubai, it’s a property model to market in Europe’s capital choice of holidaying in over 50 member requests from airport transfers to usage plan and amenities. Summer, Tuscany in October and watch. Lawyer Andy Sirkin of Sirkin & cities, super yacht sales are up beautiful properties around the private chefs and everything in between. Chamonix at Christmas and if your proper - Associates specialises in shared ownership too. Sales of 50-70-metre world but have equity owner - The Fund’s investors automatically ty’s resort is linked to a reciprocal exchange and fractionals and he sees buyers tapping yachts reportedly tripled in ship in the entire property port - become members of The Hideaways Club, programme, the options are wider still. into the benefits of owning fractionals in 2010 compared to the previous folio. In these uncertain finan - enjoying year round usage of the still- this economy: year and yacht brokers are cial times when security of widening portfolio (properties in Looking ahead “Many people buying fractionals seeing healthy sales in the £50 investment is of prime concern, Mauritius, Bali and Phuket were recently Urban fractionals are untapped as yet, but today would have bought an entire million upward league. membership of The Hideaways added, with more coming over the next The Hideaways Club kicks off 2011 in style vacation estate three years ago. Now they With yachts, bigger is Club offers both the security of three years). with The City Collection, ten chic city fully appreciate the cost-effectiveness and usually better although perhaps Mike Balfour having an asset backed invest - Hideways currently owns 27 properties residences in New York, London, Paris, risk-diversification benefits of fractional not for Roman Abramovich. ment in a liquid and diversified (47 through its alliances with US-based Venice, Miami and Istanbul, expanding to ownership, and understand that it’s not so Originally scheduled for delivery by Fund, plus strong potential for growth in Equity Estates and the Banyan Tree Private Moscow, Rio de Janeiro, Bangkok and much about what you can afford but more Christmas 2009, his 167-metre, £329 the future. The Fund currently projects Collection) and to preserve exclusivity it Sydney. about what makes sense to buy. In a few million James Bond-esque “Eclipse” was annual share returns of about 6.5%.” plans to cap it at 600 members and 100 Mike Balfour explains, “The City years, we may look back on the financial seriously delayed by glitches. With a member to property ratio of properties. The Hideaways Club, Gran Vista, Majorca Collection will provide member investors crisis as the best thing that ever happened A large mirror on one of the nine decks just 6 to 1, The Club has become Europe’s with a new way to enjoy an unrivalled city for fractional ownership because it brought shattered during North Sea tests, the elec - leading international property investment Fractionals – the way of the “And as with any property transaction, lifestyle with ultimately 120 city centre its best qualities into sharp focus.” tro-turbo engines rattled crystal ware, the Fund. Founded in 2007 it has been catching future? make sure you use an independent lawyer apartments in some of the most glamorous If it’s “luxury for less” you’re after and French navigation system played up and the attention of those looking for a viable Buying a deeded fractional property to do due diligence and check you are actu - and vibrant cities in the world.” you don’t have time to get away often, a flaking paint was spotted. Then the helipad alternative to sole property ownership. includes the potential for capital growth – ally buying what you think you're buying.” On a different note, Paul Gardner flexible five-star fractional property could had to be shifted, proving that owning the Financial advantages aside, The Club’s you own it, rather than just “spending The recession slowed sales but there Bougaard of Fractional and Shared be the intelligent answer. Yours when you world’s biggest yacht is not necessarily a million euro plus bracket properties in time” in it (which is where the often mis - have been sticking points, too, including Ownership Trade Association (FSOTA) want it, not when you don’t. headache-free experience. glamorous locations lend added appeal. leading correlation between timeshare and lack of financing, a hot topic at Fractional says fractional developers will have to www.thehideawaysclub.com A share of a yacht or overseas home is Balfour has the globe covered: Europe, fractional comes from). Shares are usually Life’s Fractional Summit 2010 which comply with the new Directive due to be www.fractionallife.com

16 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com www.gibraltarinternational.com GIBRALTAR INTERNATIONAL 17 BANKING Banks have essential role to play in supporting growth

household insurance firms, as well as a The major International banks in Gibraltar have an growing captive market, it is crucial important role to play in support of the expanding again that these companies have the confidence of knowing that there are Gibraltarian economy says Marvin Cartwright, banks in Gibraltar, that understand the Regional Head, NatWest Gibraltar intricacies of the insurance sector and have the experience of working closely espite the economic woes with captive managers and other suffered in other parts of insurance professionals. Europe, Gibraltar has shown Gibraltar is probably considered a not only resilience but ample global leader in e-gaming and has evidence that its growth is attracted some of the biggest names who Dunlikely to be affected by the economic have set up sizeable operations. Other downturn experienced elsewhere. jurisdictions are known to have attract - The Government has reported ed more e-gaming companies than record numbers of in jobs, Gibraltar has to date, but the record government surpluses, GDP Government has a focus on quality and growth in 2009 of 5.5% and further substance and as a result, the 19 firms so positive indicators for 2010*. far licensed have opened up many job The banking industry has not expe - opportunities. rienced the growth in Gibraltar that The electronic banking services other sectors have, but it continues to be available locally have proved valuable to a conduit for much of the development many of these firms in support of their in the jurisdiction. high intensity, money transaction There is a further key factor which requirements. has positive implications for the economy and in particular the finance Bullish picture industry, which is the agreed position of The financial services industry is bullish corporate taxation. The latest is King’s Wharf, the about the future prospects for the The introduction of a 10% corpo - substantial new 19-storey apartment economy and there is an anticipation rate tax rate from January 2011 development in the desirable waterfront that Gibraltar is on the cusp of another provides clients using Gibraltar with area of Gibraltar’s harbour. Overall, the growth cycle in the insurance field, much needed certainty. Meanwhile the Bank has supported in the region of e-gaming and in the funds sector. introduction of further reductions in £150m in the funding of real estate The cost of doing business in personal tax rates, at a time that tax developments during the last four years. London and elsewhere is also attracting rates across other parts of Europe are on Despite the global property crisis, all of more trading firms to consider relocat - the rise adds to the attractiveness of the these developments have been delivered ing to Gibraltar where there are of jurisdiction and ensures Gibraltar’s successfully. course a host of lifestyle benefits in economy is well placed to benefit addition to a highly professional further from the prevailing economic Expertise infrastructure. conditions. With Gibraltar experiencing substantial Whilst still small, Gibraltar still growth through its involvement in e- enjoys a host of blue-chip names in the Property focus gaming, insurance and more generally banking sector. One area where the growth of the through financial services activity, it The growth of the economy and economy is evident is in the number of becomes increasingly important that the future prospects built around the new residential property developments that jurisdiction has substantial, full service tax regime will undoubtedly create more have come to fruition. banking organisations able to provide opportunity for the sector and will NatWest have assisted with the the corporate and retail services therefore hopefully attract at least one funding of as many as seven real estate required. new player to the market. developments since 2006 and, in some With an estimated eight per cent of cases, the bank has also been the key the UK motor insurance market now *Statistics gathered from the Chief Minister’s mortgage provider. written in Gibraltar through a range of Budget Speech and Summary, July 2010

18 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com NEWS

Hotel ‘under supply’ from page 8 “Even with those adverse Fewer flights into effects, we are still not doing Gibraltar last year had too badly with year-on-year reduced bedroom demand by growth from some areas,” he approximately 10 per cent in said, adding: “Spring this year 2009/10 and Ostuni is budget - is looking quite good.” ing for a similar result in the The O’Callaghan Elliot current and next financial Hotel just off Main Street, has year. The new Gibraltar air - 130 bedrooms and wants in port terminal with much the future to add 90 rooms in increased passenger handling a new linked building. Two capability is on schedule to other proposed hotels were open in late May, according to Tea at “exudes that bygone, more genteel era”. announced years ago, a 250- a Government spokesman. increased utility and other and Group chairman, James bedroom, 5-star hotel as part New flight connections with costs.” Gaggero’s optimism that a of the East Side Development the North East of England or The Rock Hotel, a 4-star solution would be reached and another 200-bed holiday Scotland are also anticipated, elevated property built in last year, no decision has yet hotel at Little Bay, but it is understood, the result of 1932 by the Marquis of Bute, been taken on any hotel although still ‘live’, they have planned partnership ventures still exudes “that bygone, investment. In the meantime, not progressed. The govern - with the regional airports. more genteel era”. But rising Stephen Davenport, The ment is keen to extend the ter - energy costs for its 104 rooms Rock’s General Manager, ritory’s quality hotel offering, Yields held and lack of layout flexibility remarked: “But for suffering not only to attract tourists, However Ostuni revealed: prompted owner Bland Group from the effects of the volcano but to anticipated demand “Our yield has held up well, four years ago to consider debacle, BA strike and UK air - from the finance sector as a with even possibly a small either rebuilding or relocating ports closed by snow, 2010 result of Gibraltar’s growing increase. This is vital for the facility. But despite vari - would have been a bumper stature as an on-shore, EU hotels, because we face ous options being considered year. finance centre. PROFILE International calling India to London, and it has nothing to do As Gibtelecom faces increasing competition and with getting to and from Gibraltar.” growing regulatory demands that affect profits, chief Gibtelecom owns about 4 per cent of executive Tim Bristow is quietly preparing for new the cable and over three years has commit - ted most of its $30m (around £18m) to revenue streams from overseas as well as locally, as give a route out of Gibraltar that doesn’t he revealed to Ray Spencer . cross land and provides greater security – “sea cables are less prone to human inter - 009 was “challenging”, according ference, whether it’s construction works, to the Gibtelecom annual report roads or local authorities”, Bristow says published in October 2010. With diplomatically. pre-tax profits down 26 per cent at It also brings greater control over the £8.2m, the near static turnover, company’s destiny. “We are at present 2high payments for operating licences and very much in the hands of various interna - price controls, the burden of unprofitable tional carriers – we use Telefonica exten - commitments as Gibraltar’s ‘universal sively and Interoute in Spain - and pay service provider’ and the poor Euro whatever charges they wish to levy. exchange rate, all took their toll. “But crucially, it introduces an over - So it was surprising to find Bristow, a seas arm to our business for the first time, trained accountant and widely experi - rather than being just a Gibraltar-centric enced public sector official, forecasting a operation. The cable means that a pro - different story for 2011 and beyond. portion of our revenue and, ultimately our In 2010, he anticipates reporting sustainability, will come from outside Tim Bristow with his Europe India Gateway turnover rising from £31.6m to maybe submarine line terminal equipment. Gibraltar,” he enthuses. £34m, “coming from our move into the From later this year, Gibtelecom can data centre business in quite a big way, Chief Executive,” he explains. Bristow’s sell capacity in the EIG project at any of which was starting to be reflected in our experience as a non-executive director on 13 landing points around the world. 2009 results, but in 2010 it will be even the boards of both companies was a “Hence we will develop some form of more substantial”. bonus! overseas marketing arm – probably in At Mount Pleasant, Gibtelecom has Over the last 10 years the company London, but it’s a decision to be taken - spent several millions of pounds creating has invested around £60m, including the that will enable us to hit the ground “a very secure, highly protected data cen - new headquarters building in John running. tre facility where we can host other peo - Mackintosh Square where several services ples’ computers” – at present it has 170 and key equipment are housed, and a new Quick pay back ‘racks’ - as well as running its own 24/7 long-term lease at Mount Pleasant. “If we are successful in selling the spare network operations centre. Investment in technology has been capacity, we expect that this investment Landline customers generally are £3-4m a year, most coming from reserves, will pay itself off relatively quickly. The falling compared with growth in the the result of retained profits. life of the cable is approximately 25 mobile business and on various internet But it is Gibtelecom’s involvement in years,” Bristow maintains. services. the US $700m Europe India Gateway “Gibraltar is a limited market, if (EIG) submarine cable project that is you’ve got competition and are very heav - Asked to stay expected to project the Gibraltar company ily regulated, with price controls - you Bristow has been chief executive of the onto the international stage as part of a name it and it’s happening to us - why telecoms business since 2001, when he consortium of 16 substantial telecoms shouldn’t we look to alternative markets brokered the deal in which Gibraltar companies – including BT, AT&T, Cable and sources in order to sustain the value of Nynex Communications (GNC), owned & Wireless and Telekom South Africa the company for all its stakeholders, by the US giant Verizon and the “Although the cable has a branch into whether its local customers or sharehold - Government of Gibraltar, bought out the Gibraltar, the most capacity we will ever ers – they are all beneficiaries,” Bristow original Gibtel company and British require here is relatively small. I doubt points out. Telecom’s interests on the Rock. that we would ever use more than a quar - For several years, Gibtelecom has “Merging the Nynex and Gibtel busi - ter of the capacity we own, even with sub - been equipping many of its 30+ sites nesses was a very involved process and stantial growth in the local economy,” around Gibraltar with stand-by electricity when the shareholders heard that after my Bristow notes. generation equipment to help protect five years in Gibraltar I was thinking of “We can send traffic – that’s band - against power outages. moving on , they asked me to stay on as width – wherever we choose, say from Continued on P24

22 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com PROFILE

International calling from page 22 think people will have just one phone, around a 5 per cent market share to com - “We have a lot of electronics and either mobile or fixed; they may even be petition, excluding four Spanish and two there was an incident in April where for integrated with the internet and computer, Moroccan providers whose signals extend the first time in recent memory, the whole with just one device rather than three or into Gibraltar. “It’s getting better if they community suffered from an electricity cut four separate ones as now”, Bristow fore - keep putting buildings up that make it for several hours.” sees. Gibtelecom won’t rush to be first in slightly more difficult for signals to pene - One of the Rock’s largest electricity this arena, however. “A lot of people have trate from Spain”, Bristow says ruefully. users, Gibtelecom is able to switch burnt their fingers in new technologies – Internet business has seen a greater between Gibraltar Electricity Authority and we can’t afford to make mistakes.” loss of market share, he confesses, and and the stand-by Ministry of Defence, but And revealing potential for local busi - estimates Gibtelecom accounts for 80 per also has the ability to be self-sufficient for ness growth, he adds: “We are investing in cent across the spectrum. “It’s our the fixed line switch, System X and its technology that will enable us to put TV guestimate, because we can’t find out remote units around the Rock, the mobile down telephone lines and lots of other much about our private company switch and data centres. services.” competitors locally. “We have thought about generating In another year or so – maybe by our own electricity - it is so critical to our 2013 – the company can choose whether Learning fast business” - he says, smiling, “but “Our competitors are effectively, new other than for back-up we haven’t entrants to the business – not ready- done anything about it, because our made telco’s - and they are learning focus is on telecoms.” Unstated the business, and as they learn it they is the fact that one of are going to get better,” Bristow con - his two shareholders, the Gibraltar cedes. Government, has a vested interest in Nevertheless, turnover has about both utilities! trebled since the merged business was Since 2007, the other 50 per cent mooted more than a decade ago, cus - shareholder has been Telekom tomer satisfaction levels risen and Slovenije, which has extended its investment in management processes ownership footprint in Europe, south and its staff led in May to Gibtelecom east to the border with Greece, leav - becoming the first Gibraltar based ing Gibtelecom as a South West Gibtelecom's 24 hours Network Operations Centre. company to gain the European Europe outpost. Foundation of Quality Management’s Nevertheless, Telekom Slovenije has to work with, or partner, other people. “It “Recognised for Excellence” status after been “very supportive of the investment depends on the line the government on-site assessment that included extensive being made – the submarine cable and takes,” Bristow says with another wry interviews and focus groups with employ - data centres – which are beyond any pre - smile, given Gibraltar’s State-owned ees. vious requirements of the company, sim - broadcasting authority, GBC, offers rela - The Regulator receives around ply because of the scale of the projects,” tively cheap TV services. £750,000 pa from Gibtelecom for various explains 55 years old Bristow. Bristow joined the National Audit operating licences and the Company’s Nynex similarly was supportive in the Office (NAO) as a trainee accountant after associated experts and consultants bring 90’s and encouraged re-engineering of the gaining a History degree from Leeds the total to nearer £1m. entire fixed network, “such that some University, and was Private Secretary to Bristow believes the Regulator should would have said it was over-engineered at two Auditor Generals followed by a spell allow the Company to recover costs of the time by the Americans; but in fact, managing an external audit function cov - running 60 unprofitable public phone given the e-commerce world such as now, ering several UN Agencies in Rome, where boxes that it is required to provide as the it turns out to have been with great fore - his two children – now at University – universal service supplier. sight”, he adds. were born. He ended his days at the NAO “There is no arrangement for The Eastern European partner has a as a Director shadowing two large competitors to share in the cost of that mission towards converging technologies, Whitehall departments. community service." since most telco’s around the world still He applied to become Gibraltar’s Similarly, Gibtelecom bears all the have separate mobile, fixed line and per - financial and development secretary in costs of directory enquiry services and, haps also separate internet companies. 1997, a position he held for 10 years, unlike its competitors, has a legal duty to But Gibtelecom is already a fully inte - including a period doubling as Gibtelecom install fixed lines, irrespective of the grated business and has produced one Chief Executive. financial viability. converged bill since 2003 for all services. Local competition is affecting But he is not expecting anything to “At first we used to worry about this, Gibtelecom’s business, particularly on the change. “It’s just the cross we are carry - because people would find out just what commercial side, where two other local ing,” he admits. “Overall we are a highly they are paying in total”, he admits, “but providers can cherry pick more easily than profitable organisation so looking at the in reality they always knew. residential. whole thing in the round and taking the “Ultimately, in the longer term, I On mobile, Gibtelecom has lost rough with the smooth, it isn’t a drain.”

24 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com INSURANCE INSURANCE

“There is no corporation tax advan - Insurers have Latin America and Spanish tage if the parent company is domiciled removal from Spain’s tax black list gives the where there are higher rates in France, “ business captives in their sights Spain or Germany - they are going to be chance of being the de facto Finance Centre of paying the difference from here in their Gibraltar stands on the brink of significant change although that today is slightly redun - own countries”, Callaghan admits. choice for the Spanish market dant, because Gibraltar is on-shore and within the world finance sector as a result of the other three are off-shore.” Much easier tained, with easy access to lawyers and finance centre, paying it”s EU tax as the adoption from January of the territory’s new Traditionally, Latin America looked But having the Spanish or Latin accountants.” agreed, much more marketing could be to the US and New York to sort its insur - American insurance facility on the The advantage for Gibraltar is that, done by the insurance industry into tax regime. Now major Spanish multinationals ance problems, but now it’s only natural , as opposed to going to because of its size, it doesn’t need a great Spain. are to be wooed for their insurance business, for it to use Madrid, because of migra - Ireland or Malta, simply makes it all deal of business to prosper. “If we get “If the political climate is right and writes Ray Spencer. tion to Spain with its historical and cul - much easier. “Gibraltar professionals half a dozen or more new insurance the finance centre is accepted - as I tural links. There has also been signifi - speak Spanish – not that necessarily, pro - operations with some coming from would hope within the next couple of t’s not the new low headline rate of ing, he maintains is “a combination of cant growth in Latin America of large fessionals in Madrid cannot speak Spain, we can measure that as a success; years - then we should be working hard 10 per cent Corporation Tax as rapidity in decision making and an Spanish trading companies such as English – and there is no VAT charged we don’t need hundreds more” he to make Madrid more aware of such that is attracting attention; Anglo Saxon working environment, Santander, BBVA and Telefonica “that in Gibraltar, which does provide an reasons. Gibraltar, in the same way as we do with most interest stems from the coupled with a Latin lifestyle”. today are bigger outside of Spain than advantage in Europe”, Callaghan points Insurance and re-insurance compa - the City at Gibraltar Day in London”, acceptance of Gibraltar’s transfor - What makes Gibraltar stand out within it”. out. nies from France, Austria and the UK he emphasises. Imation as a mainstream, on-shore from the rest is its potential in the Callaghan says their natural first “The Telefonica insurance captive is companies are using Gibraltar to estab - As the Chamber of Commerce finance centre – fully compliant with EU Spanish market, presently a virtual ‘no- port of call is not London - even though in Luxembourg, for example, but if it lish an insurance operation, but so far Impact Study last year demonstrated, and other international regulations. go’ area given that country’s continued it is the global international insurance were here, it would be far easier and there’s not been a Spanish one. the Campo de Gibraltar and Gibraltar With the advent of Gibraltar’s new insistence on erroneously declaring the centre - because of language difficulties. speedier to talk to the Regulator. “Once the equivalent of the are to varying extents dependent on each tax legislation positioning the jurisdic - Rock a tax haven! Instead, big multinational brokers, such A lot of my clients like Gibraltar Financial Services Commission in other. “It’s about working together, as tion as a low tax, and - now that Tax as Willis - which he leads locally – that because they fly down to here or into Madrid is comfortable that Gibraltar is we expect to do more with insurance, in Exempt Company status has been elimi - Set to change have a large presence in Madrid as well Malaga and everything is small and con - not anything other than a European Spain”, Callaghan concludes. nated - not a no tax domicile, Gibraltar But that’s all set to change. With present as Latin America, are used. is better placed than ever before to negotiations between Spain, the UK and attract insurance business. Gibraltar, there is the strong possibility Madrid is close Over the last ten years the jurisdic - of a Tax Information Exchange Warming to his subject, Callaghan tion’s insurance sector has grown from a Agreement (TIEA) being signed to add emphasises: “Madrid is geographically mere handful to approximately 65 insur - to the 18 or so Gibraltar has already very close to Gibraltar and has a natural ance companies and 30 cells. Third concluded. advantage in insurance over London in party motor insurance in Gibraltar “That should result in Gibraltar’s that Gibraltarians, whilst having an account for10 per cent of the UK motor automatic removal from Spain’s tax Anglo Saxon working mentality, also market! black list and gives us the chance of embrace Latin concepts, making it much As a European onshore Finance setting out to be the de facto Finance easier for us to do business with Latin Centre, Gibraltar’s value has been its rig - Centre of choice for the Spanish American interests, because we under - orous and efficient regulation coupled market”, says Callaghan, who claims 80 stand the temperament, the thought with a ‘can do’ attitude, its size giving it per cent of Gibraltar’s commercial process and we are a hybrid.” far greater agility and flexibility than insurance broking. Callaghan has had an insurance larger jurisdictions, yet always retaining “We are an integral and geographi - operation in Madrid for years that the safe and secure ‘modus operandi’ cal part of Europe, so it is only right that underwrites medical malpractice for expected from a jurisdiction that prides we have a level playing field”, he main - Spain and Portugal and is able to access itself on reputation by virtue of looking tains, adding: “There is even, potentially markets in Bermuda, Switzerland or at business for long, and not short, term as a development, the possibility of a London. gain. double tax treaty with Spain.” He argues that Gibraltar could be a “When comparing Gibraltar to the In the same way that Luxembourg, good base for their insurance captives other two main European Union insur - because of tax treaties, has for many instead of being in Luxembourg or ance domiciles, Dublin and Malta, it is years served as a reinsurance centre for Dublin. quite unique, argues”, Bruno Callaghan, the Nordic countries, Benelux and “When we go to meetings in one of four local professionals who France, he anticipates Gibraltar becom - Madrid, we understand what the under - pioneered marketing of Gibraltar ing the Iberian Peninsula’s finance writers in London want and also what insurance in the mid-90’s. centre. the South American client wants. And A British Overseas Territory, Callaghan notes: “Gibraltar has a that makes it special; language is not a Gibraltar’s attraction is to anyone great deal to offer, similar to how from problem. wishing to establish a captive insurance the 60-s the UK and, to a lesser extent, “Why shouldn’t Telefonica and company or a third party writer to take Ireland and France were served by Iberia Airlines for example, have their advantage of pan-European underwrit - Guernsey, Jersey and Isle of Man – insurance captives here?

26 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com www.gibraltarinternational.com GIBRALTAR INTERNATIONAL 27 BUSINESS BUSINESS An oasis... Gibraltar Fund Company due to her role as advisor to The CISI has formed an of the European Commission consolidating their posi - UNESCO and other UN advisory committee to support (DG REGIO), Mr Jose tion through acquisition agencies and her mission to its development in Gibraltar Palma-Andres visited Gibraltar Helvetic Fund Administration move climate change away which will be launched formally last November. Limited, the longest established from doom and gloom in early February this year. This The visit was principally to fund administrator in scenarios and toward practical committee comprises of five see how EU funding has been Gibraltar, has acquired Capita strategies which we can use to practitioners who will represent spent by Gibraltar companies Financial Administrators prepare for a very different Gibraltar’s Securities and and to attend the in a busy world (Gibraltar) Limited. Nicola global climate. Investment firms and direct the Competitiveness and Smith, Managing Director of Speaking to Gibraltar work of the Institute within Employment Objective biennial Helvetic stated “we are International after the Gibraltar. Programme Monitoring bedrooms delighted with the acquisition conference, Danielle Tilbury The committee will, in Committee (PMC) Meeting, 104 Bedrooms and suites in a colonial which helps us to consolidate outlined her personal view of easyJet launches reception, presentation and partnership with the Gibraltar which monitors progress on style all with a sea view our position in Gibraltar and the conference’s outcomes; Liverpool to Gibraltar dinner for the city's travel Funds & Investment Gibraltar’s ERDF Programme conference facilities provides us with the capacity “The focus in Cancun was on a route industry. This will take place at Association (GFIA), promote 2007–2013. Full upgraded conference facilities for future growth of the fund two-track negotiating process easyJet is launching a brand the Marriott Hotel in the city the CISI’s range of professional Mr Palma-Andres launched available for board meetings, training industry”. aiming to enhance international new route to Gibraltar from centre and be hosted by the qualifications and regular the current ERDF Programme courses and presentations cooperation to address Climate Liverpool John Lennon Minister for Tourism, The continuing professional in Gibraltar in 2008, so it was Internet Change. Airport, which will provide a Hon. Ernest Britto OBE ED. development events to those useful for him to see how things FREE Wireless broadband available As the original deadline for three-times-weekly service. The roadshow will then working in the financial services have been progressing. throughout the hotel and an internet completing these negotiations Seats are now on sale and the travel to Manchester for two sector. He was delighted with room for our guests to use was in December 2009 and inaugural flight will leave what had been achieved and weddings many issues remained Liverpool on Tuesday 29 announced that Gibraltar was The Rock is an ideal wedding venue The acquisition has outstanding, few anticipated a March 2011. one of the first regions in whether it be a small intimate wedding increased Helvetic’s funds under legally-binding outcome or This route will be a great Europe to successfully close and or large family gathering. We are also a recognised venue for civil marriages administration by about a agreement. advantage for business people Business obtain the final payment claim and ceremonies can now be conducted third, increasing the total funds In the end a balanced from the north of England who for the 2000-2006 ERDF in various parts of the hotel to nearly 100, with asset value “package” of outcomes was travel regularly between the UK Programme. Swimming Pool of approximately $2 billion. agreed and these underpinned and Gibraltar. OUND P He stated that this was a Helvetic assure clients that their the “Cancun Agreements.” The It will also be a boost in ROUND UP great achievement as it came Outdoor swimming pool with pool R U side bar and pool side menu. We investment in people has Agreements include decisions terms of tourism, with easyJet only a few months after the welcome private pool membership, enabled them to absorb this under both the Convention and promoting the location to the official end to Programme, our lido club, with private pool hire for parties and barbecues growth in business, with no Protocol negotiating tracks, and press and their holiday makers. while some regions are still threat to the high standards of contain provisions on In their launch press days on Thursday 17th and The CISI recently struggling to close the 1997- Restaurant service they are well known for. adaptation, REDD+, release Ali Gayward, UK Friday 18th February for a accredited Global Advisory 1999 Programmes. The restaurant has stunning views Certain Capita staff have joined technology, mitigation and commercial manager at easyJet, public promotion at the city's Services as a training provider For the 2007-2013 ERDF over the bay. Our “house” menu is excellent value for three courses Helvetic to provide continuity finance. While the substantive commented: “Famed for its Trafford Centre. The busiest for a number of CISI Programmes, Gibraltar was including an aperitif Manzanilla, of service and Helvetic are outcome was viewed by many fantastic 426m high rock and shopping centre in Manchester, qualifications, so candidates allocated £3.9 million, olives and coffee. A full á la carte confident this acquisition will as far from perfect, most steeped in history, Gibraltar the Trafford Centre attracts can now sit their exams in which is expected to deliver a menu along with a superb eclectic wine list is also available provide a platform for further participants were satisfied with offers a great mix of Spanish over 100,000 people each day. Gibraltar. whole series of outputs, growth which will benefit both the outcome that restored and British cultures with the Guest speakers at the including: wisteria terrace the company and Gibraltar as a confidence in the UNFCCC benefit of the Mediterranean CISI to launch in launch, on 7 February at the • Increasing the size of the The Wisteria Terrace for lunches, dinner, barbecues, afternoon teas, whole. process. climate! Gibraltar Eliott Hotel, will include labour market by 5% and evening drinks and informal dining The reality is that although We’re delighted to be The Chartered Institute for Marcus Killick FCSI, Chief generating 850 new jobs News from the UN the international negotiation providing travellers from the Securities & Investment (CISI) Executive Officer of Gibraltar’s • Creating or safeguarding 200 Barbary bar Climate Change process is heading in the right region with direct and is the largest and most widely Financial Services Commission new jobs in the SME sector Barbary Bar and terrace for a relaxing drink and for the wine Conference from direction once more, the affordable access to this unique respected professional body for (FSC). • Providing 30 existing SMEs buff, a choice of nine wines by Gibraltarian Delegate agreements are only a relatively holiday spot.” those who work in the He said: “The FSC with EU funding, with a the glass In November, Gibraltarian and small step in combating climate securities and investment welcomes this initiative by the further 15 starting up Lounges Professor Daniella Tilbury was change. Climate change is not Liverpool / Manchester industry in the UK and in a CISI, which will assist in • Ensuring a 10% increase in Take a good old fashioned English invited to attend the just about risk and roadshow growing number of major cementing and increasing the SMEs using IT tea in one of the spacious lounges UN Climate Change vulnerability in our To capitalise on this route, the financial centres round the skill levels of those working in • Levering £3.9 million in Conference as a own societies, it is also Gibraltar Government London world. fund and wealth management tangible and intangible delegate, to support about social justice Office and a number of companies in Gibraltar.” investments and positively and about rethinking companies involved in the Funding is still available influence the economic activity. Gibraltar tourist industry, will Director of the European for all interested eligible , Gibraltar intergovernmental Much more needs to travel to Liverpool on Commission businesses and more Tel: +350 200 73000 negotiation process. be done to ensure Wednesday, February 16th The Director of the Directorate information can be found at Fax: +350 200 73513 Daniella Tilbury E-mail: [email protected] This invitation was that we are ready.” 2011, to participate in a trade General for Regional Policy www.eufunding.gi. www.rockhotelgibraltar.com

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

Professional Bodies based in Gibraltar Association of Pension Fund Administrato rs (APF A) Gibraltar Finance Centre Council (GFCC) Steven Knight, Chairman, Tel: + (350) 200 40466 Kerry Blight, Chairman, Tel: + (350) 2000 4000 Email: [email protected] Email: [email protected] Association of Trust & Company Managers (ATCOM) Gibraltar Federation of Small Business (GFSB) Nick Cruz, Chairman, Tel: + (350) 200 50418 Charles Serruya, Chairman, Tel: + (350) 200 47722 Email: [email protected] Email: [email protected] Bar Co un cil Gibraltar Funds & Investments Association (GFIA) David Dumas, Chairman, Tel: + (350) 200 59026 / 79075 James Lasry, Chairman, Tel: + (350) 200 79000 Email: [email protected] [email protected] Email: [email protected] Gibraltar Association of Compliance Officers (GACO) Gibraltar Insurance Association (GIA) Ivan Perez, Chairman, Tel: + (350) 200 73520 Chris Johnson, Chairman, Tel: + (350) 200 75326 Email: [email protected] Gibraltar Insurance Institute (GII) Gibraltar Bankers’ Association (GBA) Andy Baker, President, Tel: + (350) 200 79520 Emma Perez, President, Tel: + (350) 2000 2000 Email: [email protected] Email: [email protected] Gibraltar Society of Accountants (GSA) Gibraltar Betting & Gaming Association (GBGA) Stephen Reyes, President, Tel: + (350) 200 41200 Freddie Ballaster, Chairman, Tel: + (350) 200 40595 Email: [email protected] Email: [email protected] Society of Trust & Estate Practitioners (STEP) Gibraltar Chamber of Commerce (GCC) , Chairman, Tel: + (350) 2000 1892 Nicholas Russo, President, Tel: + (350) 200 78376 Email: [email protected] Email: [email protected]

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