p6 Budget moves p28 Lasry’s passion Aug/Sept/Oct 2009 GIBRALTAR INTERNATIONAL FINANCE AND BUSINESS Tourism strategy in the making www.gibraltarinternational.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 CENTRE Tel: +(350) 200 50011 Fax: +(350) 200 51818 http://www.gibraltar.gov.gi DELOITTE HASSANS Tel: +(350) 200 41200 • Fax + (350) 200 41201 Tel: +(350) 200 79000 • Fax + (350) 200 71966 www.deloitte.gi www.gibraltarlaw.com SG HAMBROS PIRANHA DESIGNS SG Hambros Bank (Gibraltar) Ltd Tel: +(350) 200 45599 • Fax + (350) 200 52037 Tel: +(350) 20002000 • Fax + (350) 200 79037 www.pdg.gi www.sghambros.com QUEST INSURANCE MANAGEMENT LTD. EUROPA TRUST COMPANY Tel: +(350) 200 74570 • Fax + (350) 200 40901 Tel: +(350) 200 79013 • Fax + (350) 200 70101 www.quest.gi www.europa.gi JYSKE BANK (PRIVATE BANKING) INVESTGIBRALTAR OFFICE Tel: +(350) 200 59282 • Fax + (350) 200 76782 Tel: +(350) 200 52634 • Fax + (350) 200 52635 www.jyskebank.gi www.investgibraltar.gov.gi LLOYDS TSB MONARCH AIRLINES Lloyds TSB Bank (Gibraltar) Ltd Tel: +44 (0) 8700 405040 Tel: +(350) 200 50999 Fax + (350) 200 47346 Tel: +(350) 200 47477 www.lloydstsb-offshore.com www.monarch.co.uk www.flymonarch.com www.gibraltarinternational.com GIBRALTAR INTERNATIONAL 3 Aug/Sept/Oct 2009 EDITORIAL COMMENT Volume 15 / Number 3 21st Century vision for tourism? Contents t would be easy to dismiss as NEWS trivial the notion that more 2010 budget tax progress needs to be spent on Gibraltar’s tourism Two more TIESs? development. The Rock Finance Centre 2015 Ialready attracts 10m+ visitors a year. Airlines grow But as the more astute point More berths for Ocean P6-8 out, turning visitors into tourists, appreciating more than BANKING the cheap fuel, alcohol and cigarettes that are offered, is a Call for ‘balance’ in reactions P10 bigger task. And potentially, a very rewarding one. LAW No-one seems to know the full extent to which tourism contributes to the Gibraltar economy. And for ‘Helicopter’ views P12 this reason, one of the main pillars of The Rock’s INVESTMENT economy is under-valued, possibly by Government and Risk Up, USD down P14 certainly by the many residents who see tourists as an TOURISM intrusion, an unnecessary hindrance. Strategy promised by year-end That tourism is a big contributor to the Rock’s £850m More ventures proposed P16-19 GDP is clear, but just how big? Official figures suggest £247.5m was spent by TAXATION ‘tourists’ last year, but even if truly by tourists and not Moves to shed ‘tax haven’ label substantially by shopping day trippers to the supermarkets Wealthy individuals’ non-taxing lifestyle and petrol stations, much still will be accounted for as Cross-border considerations P21-24 import costs. The net impact is less. NEWS Then there is the effect on the wider Gibraltar Trafalgar goes P25 economy - the laundries, bakeries and liquor merchants serving hotels, for example - both in terms of money spent PEOPLE AND PLACES P26-27 in varying tourism sectors and in terms of the employment PROFILE in those enterprises. Funds ‘a consuming passion’ for James Lasry P28-30 Both branches of the influential Gibraltar Bland LAST WORD family, who together - but separately - are involved in a Cautionary tales for travellers P31 large part of Gibraltar tourism - independently claim their enterprises are “very profitable”. This is why the prospect of a ground-breaking Strategy for Tourism by the year-end, led by the GIBRALTAR INTERNATIONAL MAGAZINE Government, which owns or is responsible for much of Gibraltar Published by No part of this publication The Rock’s tourism sites and infrastructure, is to be International Publications Ltd. may be reproduced without 1/5 Irish Town, Icom House, the written permission of the warmly welcomed. Suite 6/PMB 104 publishers. The publishers Joint-venture partnerships, with the private sector PO Box 561, Gibraltar have tried to ensure that all information is accurate, but investing alongside government, and taking a lead in Editor emphasise that they cannot managing sites to maximise opportunities, also seems to Ray Spencer accept responsibility for any [email protected] errors or omissions. The make good sense. publishers accept no The question is whether all this will turn a locally Sales responsibility for statements frustrated and sometimes embarrassed business C.A. Tanner made by contributors or for [email protected] any claim made in an community, into advocates of Gibraltar Tourism Inc. advertisement. Much will depend on the extent of vision displayed, Design Bil Brooks Gibraltar International the coherence of bold plans, the adoption of meaningful [email protected] Magazine is available on statistics to aid development, and the availability of subscription, 4 issues posted UK Agent: to: UK £24 - EU £32 - finance. Tel: 0044 (0) 1993 703560 Rest of World £44. It’s certain however, that promotion of “Gibraltar, the © 2009 Gibraltar International destination of choice in southern Europe” will not be Publications Ltd. enough for competition in the 21st Century! 4 GIBRALTAR INTERNATIONAL www.gibraltarinternational.com NEWS NEWS again in surplus for the year available macro economic Cat 2 High Net Worth Centre grows Low tax rate confirmed for 2011 as to March by £17m, or 6 per indicators show an economy residents pay more, however. cent of recurrent overall that continues to perform With a rise of £2,000 in the Gibraltar now hosts 103 expenditure, and higher than very well, even in the most minimum amount of tax licensed insurance operations ‘essential for economic prosperity’ anticipated. challenged global economic payable to become £20,000. - 63 in licensed companies Gibraltar’s super-low 10 per cent tax rate for utility providers - electricity, remains in good shape the Net public debt of environment in living and the maximum taxable and a further 40 in protected businesses is to take effect from January 2011, fuel, telephone service and government is to “maximise £62.5m, or just 7.5 per cent memory”. income increased from cell companies, 28 intermedi- water - then will face a 10 per our vigilance for any early of estimated GDP, was “very Against this background, £60,000 to £70,000. aries and nine managers, later than hoped by most businesses already cent surcharge making their signs of adverse effect of the low by all usual economic the financial services centre To the surprise of some, Chief Minister Peter Caruana paying tax. The date was the latest possible rate 20 per cent. Users are global economic environ- measurement”, Mr. Caruana continued to grow during there was no reference to told Parliament. under legislation and EU requirements to unlikely to see price reduc- ment … by keeping a much declared, and compares with 2008 and 2009, and Mr. up-coming Tripartite talks “There are 27 investment remove the Exempt Companies nil rate tax. tions as a result of the tax closer eye on indicators of £78m in 1994 when it repre- Caruna was “confident” that expected in July - and firms, 95 collective invest- changes. very current economic sented 23 per cent of GDP of it would do so in the coming no date given - nor any ment Schemes, 87 licensed The move foreshadowed a Effectively, companies Determined to press activity”. only £340m. years. reference to progress with trust and company services year ago, was announced will be paying tax at a higher ahead with tax reform, Mr He pointed out that “in Tax Information Exchange providers, two pensions by Chief Minister Peter rate – or not at all for Zero Caruana spoke confidently of many countries government Employment up Agreements (TIEA)s providers and 19 credit insti- Caruana, in his late-June rated enterprises - for the first an economy and the number borrowing is used to fund Pointedly, he said that while (see below and p21). tutions”, he added. Budget statement, saying it half of the 2010/11 financial of jobs - now 4.1 per cent annual budget deficits”, but other finance centres had was “essential for Gibraltar’s year and the common low higher at 20,509 – continuing “this does not happen in shed jobs on a large scale, socio economic prosperity rate thereafter. There will be to grow to record levels, in Gibraltar, not least because Gibraltar had seen a small Start-ups get low tax now that our corporate tax wide ranging and far reach- marked contrast to experi- our budgets have been and increase and employment lev- New businesses and some recently established businesses rate should be as competitive ing anti – avoidance provi- ence elsewhere in the world. remain in permanent, struc- els were being broadly main- stand to benefit immediately from much reduced as is compatible with sions in place. “Current economic indi- tural surplus, year after year. tained judging by first and corporation tax rates, as a means of encouraging start-ups Government’s revenue needs”. cators all point to continuing second quarter statistics. and early development needs of existing operations. And he noted: “Without Huge windfall significant growth in the No deficits Property transactions The 2009 budget changes mean that the 10 per cent this there would be large The basis of the tax however, economy during the current “The question of funding slowed in 2008 to 618 (805 rate will be applied from July to any new business on an scale loss of economic activi- will not change from the period of time”, he main- deficit budgets therefore in 2007), but the total value actual year basis. ty and job losses.” present source based system.