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this Section:
- GIBRALTAR
THE COUNTRY AND ITS ECONOMY
- GIBRALTAR EXECUTIVE SUMMARY
- GIBRALTAR THE ISLAND
OF GIBRALTAR
- GIBRALTAR SERVICES DIRECTORY
- GIBRALTAR MAP OF GIBRALTAR
The
Economy of Gibraltar
The economy used to be substantially dominated
by the British naval dockyard and military presence,
but major cut-backs over the last few decades
have reduced the share of such expenditure to
a small fraction of the local economy. Magnificent
port facilities remain, so that shipping and tourism
are the mainstays of the economy. Several million
people visit Gibraltar annually, many of them
evidently stepping ashore from cruise liners (see
below for recent visitor numbers). There is a
fair amount of local construction work on the
hotel/conferencing sector, and to accommodate
wealthy expatriates.
The
Government has primarily, however, pinned
its hopes for the future on the financial services
sector, which has been growing rapidly. Growth
in the technology sector is also promising, with
a number of large betting and gaming companies
taking advantage of the low-tax regime and good
telecommunications facilities.
The currency is the Gibraltar pound (£G) = 100
pence and is at par with the British pound. There
are no exchange controls in Gibraltar.
In
his June, 2005, budget speech, Chief Minister
Peter Caruana noted that Gibraltar's Finance Centre
continued to grow and remained in healthy shape
despite the challenges brought by both the EU's
insistence that the territory change its offshore
tax regime and the Savings Tax Directive.
Caruana
added: "The gaming industry continues to grow
impressively and has now become a significant
part our economy. As at April 2005, there are
now 15 operators employing 1,107 people, compared
to 11 operators employing 837 people in June last
year. This represents a 32% increase in jobs in
less than 1 year," he explained.
"This
growth in the gaming industry has produced not
just 1,107 jobs, but also a substantial increase
in Government revenue. Not only do those 1,107
people pay income tax to Government, but the industry
also paid £4.3 million to Government last year
in Gaming Tax. This is up from £1.8 million in
2000/01, an increase of 138%. This yield is expected
to rise this year as Government increases, not
the rate of Gaming Tax, but the cap to which it
is subject."
In
August 2006, the Gibraltar authorities revealed
that the economy was performing well, with
GDP
growth in 2005 estimated at 7%, after 10.4% growth
in 2004. Per capita GDP was expected to record
a new high of GBP21,000, the 10th highest in the
world.
The
Government estimated revenue of GBP250 million
(up 1.63%) in 2006-07 and expenditure of GBP232.7
million (up 3.88%), resulting in a surplus of
GBP17.3 million.programme. Public debt remained
static in absolute cash terms at GBP93 million.
This represented 15.7% of GDP, compared with the
OECD benchmark of 40% and the EU target under
the Maastricht Treaty of 60%.
Inflation
ran at 2.9% and employment within the economically-active
Gibraltarian population was estimated at 97% at
the time the figures were released, representing
almost full employment.
The
government stated at that time that Gibraltar’s
economy was well diversified, with tourism and
financial services accounting for approximately
30% of the economy each, the port and shipping
25%, and service-related activities such as telecommunications,
ecommerce and e-gaming accounting for the remaining
15%.
BACK
TO TOP
Gibraltar Investments by Foreigners
Foreign
investment in Gibraltar is actively promoted by
the government largely to create job opportunites.
Tax concessions have traditionally been governed
by The Development Aid Ordinance. Concessions
have usually been available to light manufacturers
who intend to export from Gibraltar, with any
corporation with a development aid license granted
by the governor for a project that will benefit
Gibraltar's economy exempted from paying income
tax on profit earned from the development until
the total gains from the development exceed the
percentage of approved capital expenditure.
To
qualify for a license, projects are usually required
to provide at least two housing units in Gibraltar;
create new industry; provide a material and immovable
asset in Gibraltar; develop the tourist industry;
provide new employment opportunities or tangibly
enhance the economic or financial infrastructure
of Gibraltar.
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