...while new passporting rights could widen Gibraltar potential
Brokers have until 2006 to set up a new Gibraltar operation and take advantage of its new European Economic Area (EEA) passporting rights.
This week Gibraltar's Financial Services Commission (FSC) announced it would adopt passporting under the EU Insurance Mediation Directive, allowing insurers and brokers to operate from Gibraltar and do business in any EEA state. This puts Gibraltar alongside Iceland, Liechtenstein and Norway as countries without full EU membership that can trade with any of the 25 member states.
The EC has called on the UK government to phase out Gibraltar's exempt company programme, which means the 8,000 offshore companies do not pay income tax. Under the proposals, no new business can enter the Rock tax-free after 2006, but the agreement does allow existing exempt companies to remain until December 2010.
Gibraltar chief minister Peter Caruana said that given the "tough and difficult negotiation" that Gibraltar's government has had with the EU Commission this agreement "avoids the worst consequences for Gibraltar".
He added that by 2010 the government hoped to have a new tax regime in place that will be attractive to business.
This news came 24 hours after the Treasury's review of the regulation of Gibraltar under the FSC was pub-lished. The Pratt Review said a number of recommendations should be classed high priority, such as the revision of the solvency requirement for companies seeking authorisation.
