Alternative Funds 2019

Last Updated September 05, 2019

Gibraltar

Law and Practice

Authors



Ince (Gibraltar) is a European business group with regulated legal and fiduciary practices based in Gibraltar. The team is qualified to provide legal advice on English, Gibraltar, and European law, offering expertise in the finance, technology, (including distributed ledger and blockchain operations), gaming, shipping, media and entertainment sectors. In addition, the firm offers a full-service practice including employment law, family law, intellectual property law, technology law, gaming law, regulatory law, data protection, tax law, consumer law, commercial contracts, corporate law and transaction support.

Gibraltar aims to be a major player in the global funds industry. The Gibraltar Government, through its Finance Centre Department, in conjunction with the financial services regulator, the Gibraltar Financial Services Commission (GFSC) is keen to maintain growth not only in the funds industry but throughout the financial services sector.

Gibraltar’s economy is based on a broad range of industries. The jurisdiction's staunch financial services sector is underpinned by a tradition in banking, insurance, investment and servicing the private client, as well as tourism. In recent years, Gibraltar has positioned itself as the choice jurisdiction globally for online gaming (as well as other FinTech industries such as distributed ledger technology (DLT) and payment services), attracting many of the leading operators in the sector. Due to its unique strategic location at the entrance to the Mediterranean, Gibraltar also enjoys a flourishing ship bunkering industry.

Over time Gibraltar has become an “onshore” financial centre, inclusive of tax exchange information agreements with other leading economies and white-listed by the Organisation for Economic Co-operation and Development (the OECD). Gibraltar also has an agreement with the USA to improve international tax compliance and implement the Foreign Account Tax Compliance Act (FATCA). Gibraltar has successfully developed and maintains a controlled and regulated business environment.

Gibraltar has emerged as a leading jurisdiction for funds and managers as it offers robust legislation and tax advantages within a harmonised EU framework. It is flexible as a small jurisdiction with first-class infrastructure and European “passporting rights” for investment firms. The combination of Gibraltar’s geographic location, time zone, low crime rate and standard of living makes Gibraltar a particularly attractive jurisdiction for investment funds.

As a member of the European Union, Gibraltar benefits from EU directives such as Directive 2014/65/EU on markets in financial instruments (MiFID II), Parent Subsidiary Directive (2011/96/EU), the Interest and Royalties Directive (2003/49/EC), UCITS Directive (2014/91/EU) and Alternative Investment Fund Managers Directive (2011/61/EU) (AIFMD). Firms regulated to provide investment, advisory or management services under MiFID II are able to passport their services into other EU jurisdictions under their Gibraltar licence. Gibraltar firms have enjoyed passporting rights in respect of investment services for several years. This enables providers of investment services to operate in other EEA member states based on the authorisation granted to them in Gibraltar by the GFSC. While this is the case for similar managers domiciled in other European territories, Gibraltar’s EU-compliance, low costs and a tax environment that is supported by established brand name service providers presents a compelling opportunity for the informed fund manager. 

Gibraltar's advantages include:

  • a legal system stemming from English common law;
  • a favourable tax regime (including no income tax on foreign corporate income, low domestic corporate and personal income tax, no VAT, no capital gains tax, no tax on the redemption of shares, no inheritance or wealth tax, no tax on interest earned by Gibraltar residents and no tax or withholding tax on dividends);
  • a strong economy and financial stability;
  • Gibraltar's geographic location (at the gateway to Europe) and EU membership (subject to change post-Brexit on 31 October 2019);
  • a well-regulated financial services sectors (risk-based, outcomes-focussed principles); and
  • the re-domiciliation of existing funds in a large number of relevant funds in territories such as Europe, the USA, Hong Kong, British Virgin Islands, the Cayman Islands, Switzerland and Commonwealth territories to Gibraltar is a simple process.

Experienced Investor Funds (EIF) and private schemes (also known as private funds) are the structures of choice when setting up Gibraltar alternative investment funds. Both the EIF and the private scheme are collective investment schemes which sit outside the retail environment.

EIFs are targeted at investors with sufficient experience, knowledge and understanding of the investments they choose to make and its associated risks.

An EIF is a collective investment scheme which is established under the Financial Services (Collective Investment Schemes) Act 2011 and the Financial Services (Experienced Investor Funds) Regulations 2018 (EIF Regulations), and is regulated by the GFSC.

Private funds are collective investment schemes not listed on the stock exchange and can only be marketed to a maximum of 50 investors. Until recently, these funds have been substantially unregulated. However, from July 2014 these funds must be registered as a minimum requirement pursuant to the rules introduced by AIFMD.

EIFs and private schemes can be established using a variety of legal entities – a private company limited by shares, a public company limited by shares, a protected cell company (PCC), a limited partnership, a unit trust and any form of legal entity established in any European Economic Area state.

The most commonly used vehicle is the PCC incorporated under the Protected Cell Companies Act 2001, or the private company limited by shares incorporated under the Companies Act 2014. It is worth noting that a Gibraltar private company limited by shares established as an EIF is not restricted to a maximum of 50 participants.

The use of the PCC as a private scheme is limited and its use, for this purpose, should be explored first with the GFSC.

A PCC is a company which can segregate its assets and liabilities into cells that are statutorily protected and are remote from each other in the event of insolvency. This provides a useful vehicle for the segregation of assets and liabilities of a sub-fund from other sub-funds under the umbrella of an EIF or private scheme. This has become an increasingly popular entity offering investors the opportunity to split their investment between different strategies while complying with any relevant overall minimum investment thresholds. It also assists with the marketing of related funds under a single banner and provides a fast and cost-effective way of launching new independent funds once the general structure is in place.

Under Gibraltar law the assets and liabilities of a cell of a company compliant with the PCC Act will be protected against those of another cell. While such segregation is recognised under the law of Gibraltar, it may not be recognised in other jurisdictions in which the fund’s assets, or the assets of a cell of the fund, may be located. Therefore, it is common to form separate special purpose vehicles (SPVs) below each cell of a PCC to ensure segregation of any assets and liabilities held by any cell outside of Gibraltar.

Historically, there has also been interest in using Gibraltar limited partnerships as a vehicle for establishing EIFs. This is primarily as a result of their commercial flexibility and tax transparency. While a Gibraltar limited partnership is comparable to the English equivalent, there are some key differences. The Gibraltar limited partnership has perpetual succession and separate legal personality (which means it qualifies as an overseas body corporate under certain UK laws).

Although a unit trust is not considered as having separate legal personality, there has also been interest in its use as a vehicle for Gibraltar funds as a result of the tax transparency of the trust vehicle. This tax transparency enables investors to take advantage of fiscal arrangements between their jurisdiction of residence and the jurisdiction of the investments.

Gibraltar funds are primarily governed by the following legislation.

  • EIF Regulations, which governs EIFs.
  • Financial Services (Alternative Investment Fund Managers) Regulations 2013 (AIFM Regulations), which transposed the AIFMD into Gibraltar law and is applicable to all EIFs which fall within the remit of the AIFMD.
  • Financial Services (Markets in Financial Instruments) Act 2018, which transposed MiFID II.
  • Prospectus Act 2005 (Prospectus Act), which transposes the Prospectus Directive (2003/71/EU) into Gibraltar law may apply to offers of transferable securities (excluding UCITS). The Prospectus Act allows for the marketing of certain closed-ended collective investment undertakings in Gibraltar and potentially in Europe. It should, however, be noted that the Prospectus Regulation 2017/1129 came fully into force in the summer of 2019 and is directly applicable in Gibraltar while it remains within the European Union.

Subject to the provisions of the private placement memorandum (PPM) and the articles of association of the fund’s underlying company, funds can originate loans on a private basis. A fund which is not licensed to provide loans (as a moneylender) cannot offer loans on a regular basis or to the general public.

Funds can invest in cryptocurrencies and other non-traditional assets (including crypto-assets).

Entities which handle or store crypto-assets (such as funds which invest in crypto-assets) but which are not licensed under the DLT Regulations are still expected to adhere to the GFSC guidance to DLT providers in relation to safekeeping of customer assets, cybersecurity and resilience.

A major advantage in setting up an EIF is that no formal prior approval is required from the GFSC. As a result, funds can be marketed very quickly, and possibly be operating within ten days of finalising the offer documentation.

To establish an EIF in Gibraltar, the following documents must be filed with the GFSC by the EIF's administrator (no sooner than ten days before or within ten days after the establishment of the fund):

  • written notification registering the fund as an EIF in the approved form with the prescribed application fee;
  • a copy of the offering documents (also known as the PPM);
  • a legal opinion that the EIF is compliant with the applicable Gibraltar legislation – this opinion must be produced by a lawyer of the Supreme of Court of Gibraltar of at least five years' professional standing, who is independent of the administrator;
  • any other documents requested by the GFSC.

Unless the fund falls within the scope of AIFMD (in which case an AIFM is required), the fund is not required to have an external investment manager local or otherwise. If external advisors or managers are engaged, they need to be regulated as an AIFM or small AIFM.

In Gibraltar, many funds are self-managed. In such circumstances, a representative of the fund such as a manager, promoter or adviser will sit on the fund’s board as the investment director. The investment director does not require a Gibraltar licence.

Other than as indicated below, there are no requirements for substance, business premises or local employees.

EIFs

When an EIF is established as a company, at least two directors must be resident in Gibraltar and licensed by the GFSC (ie, EIF directors). If it is established as a trust, at least two of its trustees must be ordinarily resident in Gibraltar and licensed by the GFSC.

An EIF must also have a depository (unless the EIF is a closed fund or the GFSC makes a determination to that effect).

An EIF must have a licensed administrator in Gibraltar or a non-Gibraltar administrator approved by the GFSC.

In-scope AIFMs

In-scope AIFMs in Gibraltar (which for the avoidance of doubt could be either an EIF or a private fund where it is self-managed and of sufficient AUM) must apply to be licensed as set out in the AIFM Regulations and are required to demonstrate all of the following:

  • suitable qualification of fund management and directors;
  • adequate risk-management procedures;
  • adequate liquidity management controls;
  • procedures for the management of conflicts; and
  • prescriptive disclosure requirements to potential investors.

In respect of EIFs, the fund controllers, the directors (or trustees or directors of the general partner or manager in a non-corporate structure) are responsible for risk management, the safeguarding of assets, prevention of fraud and other irregularities.

A Gibraltar-licensed administrator or approved non-Gibraltar administrator must be appointed. The fund is required to have appropriate anti-money laundering policies and systems in place including a money laundering reporting officer and a compliance officer.

In many cases, these would be provided by the fund administrator, who would already have these systems and the appropriate personnel in place as a licensed entity.

Non-local service providers such as administrators and custodians are not subject to regulation or registration requirements, however, they must be a GFSC approved, non-Gibraltar service provider.

Funds

In most cases Gibraltar does not levy tax on investment fund income, since only income accrued in or derived from Gibraltar is taxable. Retail fund income is likely to be generated outside of Gibraltar, or of a type that is not within the scope of Gibraltar tax. In addition, there is no capital gains tax or VAT levied in Gibraltar.

It is possible for funds to request a ruling from the Gibraltar Commissioner for Income Tax to confirm the fund will not be subject to income tax.

Certain types of funds (such as the contractual fund) are tax transparent and would likely be recognised as tax transparent in other jurisdictions.

A Gibraltar-based licensed investment fund manager providing licensed investment services would be subject to pay corporate income tax at a general rate of 10% on income derived in or from Gibraltar. However, qualifying employees and investment fund owners may be able to benefit from certain additional tax treatment benefits that provide for a maximum annual taxable income for qualifying individuals. Managers of investment funds would be likely to qualify.

No income tax is levied on non-resident directors who are present in Gibraltar for less than 30 days a year.

Resident Investors

Gibraltar resident shareholders or unit-holders do not pay tax on fund income which does not accrue or derive from Gibraltar.

Non-resident Investors

As there are no withholding taxes on dividends, capital gains tax or interest in Gibraltar, non-resident investors will not usually have to pay any taxes in Gibraltar.

Other investors such as limited partners or unit-holders will also not be liable to any taxes on income from funds which do not accrue or derive from Gibraltar.

Alternative funds established in Gibraltar do not benefit from any double-taxation treaties.

It is common to use subsidiaries for investment purposes. One reason for this is to segregate assets for their protection as, in the event of an asset or group of assets becoming liabilities, the risk of loss is limited to the assets within the subsidiary or cell as opposed to the entire portfolio of the fund.

Another reason to use subsidiaries to segregate assets is for tax planning as various asset classes will be treated differently for tax purposes.

The promoters and sponsors of Gibraltar funds originate from various jurisdictions across the world including the USA, Canada, Switzerland, Malta and the UK.

As explained in 2.14 Origin of Promoters/Sponsors of Alternative Funds, the investors in Gibraltar funds originate from various jurisdictions across the world.

See 2.14 Origin of Promoters/Sponsors of Alternative Funds and 2.15 Origin of Investors in Alternative Funds.

The biggest trend which has been seen in the Gibraltar funds industry over the last year is the emergence of funds investing in crypto-assets.

In-scope AIFMs

Disclosure to potential investors: prior to investment by an investor, AIFMs must make certain information available to AIF investors for each of the AIFs they manage and for each of the AIFs that they market in the EU. The information to be provided is set out below.

  • A description of the investment strategy and objectives of the AIF.
  • Information on where any master AIF is established and where the underlying funds are established if the AIF is a fund of funds.
  • A description of the types of assets in which the AIF may invest.
  • The techniques it may employ and all associated risks.
  • Any applicable investment restrictions.
  • The circumstances in which the AIF may use leverage.
  • A description of the procedures by which the AIF may change its investment strategy or investment policy, or both.
  • The legal implications of the contractual relationships entered into for the purpose of investment.
  • The identity of the AIFM, the AIF's depositary, auditor and any other service providers and a description of their duties and the investors' rights.
  • A description of how the AIFM is complying with the requirements of Article 9(7) of the AIFMD (on capital requirements).
  • A description of any delegated management function and of any safe-keeping function delegated by the depositary, the identification of the delegate and any conflicts of interest that may arise from such delegations.
  • A description of the AIF's valuation procedure and of the pricing methodology for valuing assets, including the methods used in valuing hard-to-value assets in accordance with Article 19 of the AIFMD (on valuation).
  • A description of the AIF's liquidity risk management, including the redemption rights both in normal and in exceptional circumstances, and the existing redemption arrangements with investors. This should include disclosure of notice periods in relation to redemptions, details of lock-up periods, an indication of circumstances in which normal redemption mechanisms might not apply or may be suspended, and details of any measures that may be considered by the governing body, such as gates and sidepocketing, as they have an impact on the specific redemption rights of investors in the particular AIF.
  • A description of all fees, charges and expenses and of the maximum amounts of any fees, charges or expenses which are directly or indirectly borne by investors.
  • A description of how the AIFM ensures a fair treatment of investors and, whenever an investor obtains preferential treatment or the right to obtain preferential treatment, a description of that preferential treatment, the type of investors who obtain such preferential treatment and, where relevant, their legal or economic links with the AIF or AIFM.
  • The latest annual report referred to in Article 22 of the AIFMD (annual report).
  • The procedure and conditions for the issue and sale of units or shares.
  • The latest net asset value of the AIF or the latest market price of the unit or share of the AIF, in accordance with Article 19 of the AIFMD (on valuation).
  • Where available, the historical performance of the AIF.
  • The identity of the prime broker.
  • A description of any material arrangements of the AIF with its prime brokers.

There are also ongoing disclosure requirements.

Out of Scope EIFs

The EIF Regulations also provide that for certain disclosures and other information to be made to investors.

Disclosures to the GFSC

There are requirements under the AIFM Regulations to provide a wide range of information to the GFSC on an ongoing basis. A summary of this requirement can be found on the GFSC website.

All EIFs

EIFs must file annual audited financial statements with the GFSC within six months of its financial statement period end (which should be no longer than 18 months).

The EIF's controller (being separate to the EIF administrator) must ensure the GFSC is notified of any material change to the EIF within 20 days of such change taking place.

Annual returns must also be filed in the form specified by the GFSC.

As the regulatory regime which governs funds in Gibraltar stems from EU membership, the entire framework is subject to change as a result of Brexit, though at the time of publication we do not know what these changes will be.

Notwithstanding Brexit, the Gibraltar government has expressed its commitment to continue to legislate in a manner whereby local financial services legislation remains harmonised with the rest of the EU in the hope that Gibraltar will continue to be considered a white-listed jurisdiction for EU financial services post-Brexit.

Typically, the legal structure used by alternative fund managers in Gibraltar are private companies limited by shares. In some cases, the ultimate beneficial owner (UBO) is able to engage himself for the company as a High Executive Possessing Special Skills (HEPSS) which might allow the UBO to further mitigate their tax liability.

Limited Liability Partnerships are also commonly used legal structures for fund managers.

Gibraltar has implemented the EU regime applicable under the AIFMD in respect of the regulation of investment advisers, arrangers and managers, as well as managers of collective investment schemes. It also has national legislation that covers a number of other areas outside the scope of EU law, which can largely be found in the Financial Services (Investment and Fiduciary Services) Act 1989 and the Financial Services (Collective Investment Schemes) Act 2011.

AIFMD has been implemented by way of several legislative changes, including those made to the following:

  • Financial Services (Alternative Investment Fund Managers) Regulations 2013;
  • Financial Services (Alternative Investment Fund Managers) (Fees) Regulations 2015;
  • Financial Services (Alternative Investment Fund Managers (European Long-Term Investment Funds) Regulations 2015;
  • Financial Services (Alternative Investment Fund Managers) (Depositaries) Regulations 2013;
  • Financial Services (Alternative Investment Fund Managers) (Regulatory Powers) Regulations 2014;
  • Financial Services (Alternative Investment Fund Managers) (European Venture Capital Funds) Regulations 2014;
  • Financial Services (Alternative Investment Fund Managers) (European Social Entrepreneurship Funds) Regulations 2014; and
  • Financial Services (Experienced Investor Funds) Regulations 2018.

The regime under AIFMD applies to fund managers that manage within the scope of alternative investment funds.

Please see 2.11 Tax Regime.

Please see 2.11 Tax Regime in respect of taxation of funds in Gibraltar. While there is no such specific exemption, in most cases such presence would not generate a tax liability in any event but specific advice should be taken.

Carried interest is treated as a capital gain. There is no capital gains tax in Gibraltar.

AIFMs can outsource some of their functions as long as they meet the requirements for delegation of AIFM functions set out in Article 20 of AIFMD.

The local substance requirements which apply to managers are set out in detail in the AIFM Regulations but, in summary, an AIFM is required to satisfy the GFSC as to the following:

  • appropriate persons (with a good reputation and which are sufficiently experienced) are effectively conducting the business of the AIFM;
  • the organisational structure of the AIFM is appropriate, including how the AIFM intends to comply with its obligations under the Act;
  • it has remuneration policies and practices pursuant to Article 13 of the AIFMD;
  • it has made adequate arrangements for the delegation and sub-delegation to third parties of functions, required by Article 20 of the AIFMD;
  • the AIFM is able to meet the conditions of the AIFM Regulations and the AIFMD;
  • the AIFM has sufficient initial capital and own funds in accordance with Article 9 of the AIFMD;
  • the shareholders or members of the AIFM that have qualifying holdings are suitable, taking into account the need to ensure the sound and prudent management of the AIFM;
  • the head office and the registered office of the AIFM are located in Gibraltar.

If the requirements in 3.7 Local Substance Requirements are met, there is no restriction on foreign managers managing local EIFs. Their only requirement is that they must be lawfully able to provide their services from their home jurisdiction. EU managers would normally have needed a licence under MIFID II or must be a licensed or authorised AIFM in their home member state.

Despite the looming uncertainty of a post-Brexit Gibraltar, investor appetite in alternative funds has remained strong. Investors in Gibraltar alternative funds are predominantly private, experienced investors – however, there is also significant investment from family office wealth managers, as well as, some institutional investment.

In-scope AIFs

In-scope AIFs can be marketed to "professional clients" as defined in Schedule 2 of the Financial Services (Market in Financial Instruments) Act 2006. A professional client is a client who possesses the experience, knowledge and expertise to make its own investment decision and properly assess the risk that it incurs.

There are clients who are considered professional and may be treated as such because of the type of entity or the kind of experience they have (for example, credit institutions and investment firms). Clients may also request to be considered professional but a fitness test must then be undertaken to assess whether the client can be considered professional. This requires that the client must, as a minimum, fulfil two of the following three criteria:

  • the client has carried out transactions, in significant size, on the relevant market at an average frequency of ten per quarter over the previous four quarters;
  • the size of the client's portfolio exceeds EUR500,000; and/or
  • the client has worked in the financial sector in a relevant area for at least one year.

All EIFs (Including Out of the AIFMD Scope)

EIFs can only be offered to an experienced investor, defined as a person or entity that falls into one of the following categories.

  • A person or partnership whose ordinary business or professional activity includes, or it is reasonable to expect that it includes:
    1. acquiring, underwriting, managing, holding or disposing of investments, whether as principal or agent; or
    2. the giving of advice concerning investments.
  • A company which has net assets in excess of EUR1 million or which is part of a group which has net assets in excess of EUR1 million.
  • An unincorporated association which has net assets in excess of EUR1 million.
  • The trustee of a trust, where the aggregate value of the cash and investments which form part of the trust's assets is in excess of EUR1 million.
  • An individual whose net worth, or joint net worth with that person's spouse, is greater than EUR1 million, excluding that person's principal place of residence.
  • A participant who has a current aggregate of EUR100,000 invested in one or more EIFs.
  • A participant who invests a minimum of EUR50,000 and has been advised by a professional adviser to invest in the fund and confirmed the same to the fund's administrator.
  • A participant who is a professional client under the Financial Services (Market in Financial Instruments) Act 2006.
  • A participant in a fund that has re-domiciled to Gibraltar where the GFSC has permitted their re-domicile either in respect of a specific fund, a category of funds from a certain jurisdiction or generally. To be accepted as a participant of an EIF, the investor must provide written confirmation that he or she:
    1. is a qualified investor; and
    2. has received and accepted the investment warning stipulated in the offer document.

Out-of-scope Private Funds

A private fund can be marketed to no more than 50 potential investors from an exclusively restricted identifiable category of persons such as friends, family or close business associates. The offer must be in respect of units that are or will be established as a private scheme that will remain as such for at least one year after the offer is made.

See 4.2 Marketing of Alternative Funds.

It should be noted that non-EU AIFMs wishing to market within Gibraltar may take advantage of the National Private Placement Regime (NPPR) under the Financial Services (Alternative Investment Fund Managers) Regulations 2013.

Local investors are permitted to participate in an in-scope AIF, an out-of-scope EIF and/or private fund – however, the rules of marketing funds (see 4.2 Marketing of Alternative Funds and 4.3 Rules Concerning Marketing of Alternative Funds) must be adhered to.

Depending upon whether the fund is being marketed to experienced and professional investors, or retail investors, there is either a notification or an application form under the NPPR mentioned at 4.3Rules Concerning Marketing of Alternative Funds.

Further AIFMs can market EU AIFs that it manages to professional investors, provided it notifies the GFSC and receives consent to do so.

There are no specific disclosure requirements relating to investors of AIFs in Gibraltar. As part of its implementation of the EU Fourth Anti-Money Laundering Directive, however, Gibraltar has introduced the register of Ultimate Beneficial Owners Regulations 2017 (UBO Regulations) under the Proceeds of Crime Act 2015.

Under the UBO Regulations, legal entities are required to disclose beneficial ownership details (25% ownership, voting rights or control in an entity whether directly or indirectly) to a private central register (ie, the UBO Register) held by the Finance Centre Department of the Government of Gibraltar. UBO details are disclosable upon request to national authorities, licensed financial services institutions and persons with a legitimate interest. Gibraltar funds are required to comply with the UBO Regulations.

There are no withholding taxes in Gibraltar on dividends, capital gains or interest income. An exception to this is in connection to certain interest payments to UK-resident individuals under the EU Savings Directive (2003/48/EC), where the payee elects for the withholding option. Consequently, non-Gibraltar resident shareholders in a corporate vehicle will generally not suffer any taxes in Gibraltar.

Other interests, such as limited partners or unit-holders, similarly will not suffer any Gibraltar taxes on income from a fund which does not accrue and derive income from Gibraltar. The introduction of FATCA may, however, require the imposition of a withholding tax where information on US investors is not forthcoming.

Gibraltar resident shareholders will not suffer tax on income from a fund which does not accrue and derive income from Gibraltar. In addition, where a fund is marketed to the general public, such as a retail UCITS, there are no taxes payable in Gibraltar on income arising from the fund.

Gibraltar routinely transposes EU directives to local law and is consistently at the forefront of adherence to international standards of compliance, transparency and anti-money laundering practices.

Gibraltar was one of the first jurisdictions to criminalise money laundering from all forms of criminal activity and was one of the first jurisdictions to regulate the providers of fiduciary services and apply the provisions of anti-money laundering regime in this sector. Gibraltar financial services businesses in Gibraltar are required to put into place measures to prevent, detect and report suspicious transactions.

Gibraltar is fully compliant with the EU Fourth Anti-Money Laundering Directive (until the EU Fifth Anti-Money Laundering Directive is transposed into domestic law and comes into force), as well as with international obligations in respect of countering terrorist financing. Gibraltar complies with the Financial Action Task Force (FATF) recommendations (as revised and amended from time to time), the Basil principles and the Vienna Convention.

The FATF considers Gibraltar to be a co-operative jurisdiction and has stated that: “Gibraltar has in place a robust arsenal of legislation, regulations and administrative practices to counter money laundering. The authorities clearly demonstrate the political will to ensure that their financial institutions and associated professionals maximise their defences against money laundering, and cooperate effectively in international investigations into criminal funds”.

In keeping with its principles of transparency, Gibraltar has established relationships with numerous jurisdictions for the exchange of information through Tax Information Exchange Agreements and the Convention on Mutual Administrative Assistance in Tax Matters. In addition, following the introduction by the USA of FATCA, Gibraltar signed intergovernmental agreements to improve international tax compliance with the UK and with the USA.

Ince (Gibraltar)

Unit 6.20
World Trade Center
6 Bayside Road
Gibraltar
GX11 1AA

+350 200 68 450

infogibraltar@incegd.com www.incegd.com
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Law and Practice

Authors



Ince (Gibraltar) is a European business group with regulated legal and fiduciary practices based in Gibraltar. The team is qualified to provide legal advice on English, Gibraltar, and European law, offering expertise in the finance, technology, (including distributed ledger and blockchain operations), gaming, shipping, media and entertainment sectors. In addition, the firm offers a full-service practice including employment law, family law, intellectual property law, technology law, gaming law, regulatory law, data protection, tax law, consumer law, commercial contracts, corporate law and transaction support.

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