GIBRALTAAug/SeptR /Oct 2015 INTERNATIONAL FINANCE n INVESTMENT n BUSINESS The changing face of insurance in Gibraltar www.gibraltarinternational.com we keep the wheels turning Gibraltar’s Lawyers Since 1905 Triay & Triay, 28 Irish Town, Gibraltar 5FM t'BY [email protected] t www.triay.com Sponsors Gibraltar International Magazine is grateful for the support of the finance industry and allied services (with the encouragement of the Finance Council) in the form of committed sponsorship. We would like to thank the following sponsors: GIBRALTAR FINANCE Tel: + (350) 200 50011 • [email protected] www.gibraltarfinance.gi DELOITTE QUEST INSURANCE MANAGEMENT LIMITED Tel: + (350) 200 41200 • [email protected] Tel: + (350) 200 74570 • [email protected] www.deloitte.gi www.quest.gi EUROPA TRUST COMPANY LIMITED ISOLAS / FIDUCIARY GROUP Tel: + (350) 200 79013 • [email protected] Tel: + (350) 2000 1892 • [email protected] www.europa.gi Tel: + (350) 200 76651 • [email protected] www.gibraltarlawyers.com HASSANS www.fiduciarygroup.com Tel: + (350) 200 79000 • [email protected] www.gibraltarlaw.com GIBTELECOM Tel: + (350) 200 52200 • [email protected] GRANT THORNTON www.gibtele.com Tel: + (350) 200 45502 • [email protected] www.grantthornton.gi KPMG Tel: + (350) 200 48600 • [email protected] EY LIMITED www.kpmg.gi Tel: + (350) 200 13200 • [email protected] www.ey.com/gi SAPPHIRE NETWORKS Tel: + (350) 200 47200 • [email protected] PIRANHA DESIGNS www.sapphire.gi Tel: + (350) 200 45599 • [email protected] www.pdg.gi TRIAY & TRIAY / T&T MANAGEMENT CREDIT SUISSE (GIBRALTAR) LIMITED SERVICES LIMITED Tel: + (350) 2000 4000 Tel: + (350) 200 72020 • [email protected] [email protected] Tel: + (350) 200 76108 • [email protected] www.credit-suisse.com/gi www.triay.com • www.ttms.gi BANGOR BUSINESS SCHOOL BDO LIMITED Tel: + (44) 1248 365966 Tel: + (350) 200 47300 • [email protected] www.bdo.gi [email protected] www.charteredbankermba.com SG HAMBROS BANK (GIBRALTAR) LIMITED Tel: + (350) 2000 2000 TURICUM PRIVATE BANK LIMITED [email protected] Tel: + (350) 200 44144 • [email protected] www.privatebanking.societegenerale.com/hambros www.turicum.com www.gibraltarinternational.com Gibraltar International 3 Aug/Sept/Oct 2015 Volume 21/ Number 3 Contents Overseas mission p20 News p6 Gibraltar as the Gateway to Europe for Singapore Private sector setting the pace for growth and Hong Kong Budget p8 Aviation p22 Budget 2015 – Tax Measures More UK air services being targeted – but Europe remains elusive Education p10 New university aiming to be self-funding in two years Development p25 Land reclamation project fills State coffers Insurance p12 The changing face of insurance in Gibraltar Business p26 Gibraltar: Where innovation begins Funds p14 AIFMD – Two years on Taxation p28 Income Tax (Amendment) Bill 2015 Profile p16 Sunborn looks to float and relocate Business round up p30 Editorial Comment Quick wins to help economy wo new independently run State enterprises, the retail Gibraltar it is not just a case of making money. International Bank (GIB) and Gibraltar University (UniGib), Yet that is just what Gibraltar seems able to do with comparative ease! The have between them £35m of pump priming, but it is a pity not GSLP set out to increase the economy by 50% over four years, but the original Tmore time was given before launch. estimate of £1.64bn Gross Domestic Product (GDP) by December has already GIB opened in May, encountering start-up problems with suppliers for been met, Chief Minister Fabian Picardo revealed in his June Budget. Debit cards and cheque books and three weeks rather than three months to He suggested £1.65bn could well be the final outcome for 2014/15 in which test systems; UniGib, had a similarly short gestation period and opens in case he feels, it is not unreasonable to expect that the current year will produce September without any on-site accommodation, and unable to capitalise for £1.8bn nominal GDP. the coming year on potentially profitable overseas students, and new But as Minister for Employment, Joe Bossano, a long-standing parliamen - full-time degree courses. tary economic guru, noted: “For the future, to manage the same rate of growth But this is an election year and the Gibraltar Socialist Liberal Party would require that our GDP should then go from £1.8bn in 2015/16 to £2.7bn in (GSLP) government clearly felt it necessary to ensure major manifesto 2019/20.” However, ahead of this year’s election, no one is yet making such a commitments are achieved before voting occurs towards end-2015. The prediction. establishment of the bank and university are undoubtedly big achievements. Construction and related income forms a significant part of that growth, for Emphasis now will be on ensuring both institutions deliver quality results, example the near £89m upfront licence fee payment due in September for the whilst not tapping further into State coffers. GIB estimates it will be Blue Water £1.1bn development – Gibraltar’s largest projected inward invest - profitable within three years; UniGib’s government grant covers two years’ ment - and the big rise in associated PAYE income from the 900 people to work setting up and running costs. on realising the project by 2021. Ensuring both enterprises present a good deal, encourage business The worry is that temporary construction projects are fuelling much of the opportunities, and add to Gibraltar’s reputation will be critical. Both growth: ministers this year did not trumpet shares of economy held by financial organisations have a sound and experienced management board to help steer services (previously 20%) and gaming (25%), the feeling being that sectors such development, and UniGib in addition has an enviable Academic Board, with as the port and tourism, are not producing any significant growth rate. 12 education luminaries from across Europe (and Australia), assisting Information based on ageing input-output studies has been extrapolated by vice-chancellor, Prof. Daniella Tilbury. government statisticians. How GIB and UniGib both engage with the community will be key – Ray Spencer Published by No part of this publication may be reproduced without the written Gibraltar International Publications Ltd. permission of the publishers. G7 Cornwall’s Centre PMB 104, PO Box 561 Disclaimer Gibraltar Gibraltar International Publications Limited have tried to ensure that all Editorial enquiries information is accurate, but emphasise that they cannot accept responsibility for any errors or omissions, and that they accept no responsibility for [email protected] statements made by contributors or for any claim Advertising enquiries made in an advertisement. [email protected] Design [email protected] UK Agent: Tel: + 44 (0)1993 703560 © 2015 Gibraltar International Publications Ltd. 4 Gibraltar International www.gibraltarinternational.com Within the European Union Single Market News continue to seek opportunities to add greater diversity to the current insurance sector where Private sector setting the predominant class of business is UK motor insurance.” the pace for growth Earlier, Picardo revealed gaming companies paid £33.4m corporation tax last Unlike developing countries facing a series of economic “tough year (up 19%) and remote gambling duties rose to £14.1m from £11.6m (reversing the challenges” in 2015, Gibraltar’s progress continues apace – a 10% previous years’ fall), largely due to an increase rise in Gross Domestic Product (GDP) last year and only slightly in licences and higher turnover. lower rate expected for 2015 However, “modest reductions” in the total number of gaming staff to 3,423 from hat was the view of Chief Minister That is based on the £83m upfront pre - business mergers and office moves, caused a Fabian Picardo, presenting his fourth mium negotiated by the government for the 1.3% year-on-year fall in PAYE contributions Tannual budget in his current term of long-awaited Eastside development before a to £22.5m. Financial services and gaming office. Early estimates indicate GDP of construction licence is given, plus £4.75m for together account for around 45% of the £1.64bn for the year to end-March, but based “a pile of rubble” on the land that will be used economy. on experience, “it is likely that this figure will to help make a breakwater for a super yacht in any event be revised upwards”. marina in the £1.1bn project (see page 25). It LNG to aid growth Picardo expected to “comfortably is “a huge statement of confidence in our Another anticipated “great driver of exceed” his original election target of £1.65bn economy”, Picardo said. economic growth” - Liquified Natural Gas by end-March next year, maybe reaching That development involves building storage, re-gasification and LNG bunkering, a £1.8bn nominal GDP. 1,700 affordable homes with the government new industry for Gibraltar and necessary if it “Most exciting”, said Picardo, was the being only a purchaser in partnership with the is to remain the largest bunkering port in the fact that now the private sector was the main homebuyer when built. “Indeed, just the Mediterranean “as diesel slowly disappears as driver of GDP growth, including: continued sales of those apartments can provide a the fuel of choice”. The project is “likely to be rising employment – “a record high” full and considerable payment to government from the financed entirely by third parties”, although part time jobs 7% higher at 24,422 in October purchasers,” he declared. the Government anticipates having the option 2014; increases in online gaming and In managing Public Debt, the to invest, Picardo stated. financial services duty and tax contributions; Government has agreed renewal of a £50m Measures to help new business with and “very increased levels of construction” revolving loan facility with the Royal Bank of cash flow, and training costs for all with the private sector taking a greater lead.