Telephone: (+350) 200 42686
International wealth protection – Innovative and impartial tax planning and asset structuring for private clients, their businesses and their families.
Sovereignty & Constitution
Gibraltar is a British Overseas Territory. It was ceded to Britain in perpetuity by the Treaty of Utrecht in 1713. Britain remains responsible for the Rock's defence and foreign affairs and appoints the Governor, who is a representative of the Crown in Gibraltar.
Gibraltar's British sovereignty is assured by the preamble to the Gibraltar Constitution Order 1969, in which Britain assures the people of Gibraltar that Britain will never enter into arrangements under which they would pass under the sovereignty of another State against their freely and democratically-expressed wishes. This has again been confirmed in the new Constitution agreed between Gibraltar and Britain in March 2006, which is yet to be adopted by the people of Gibraltar in a referendum.
Gibraltar is self governing on international matters. Its democratically-elected House of Assembly has the power to make laws "for the peace, order and good government of Gibraltar". The scope of these powers, which include taxation, is set out in more detail in the annex to the Constitution entitled "Defined Domestic Matters".
The legal system is based on the common law and statute law of England and therefore embodies the advantage and security of British company and trust law.
Spain has, virtually since ceding Gibraltar, tried to regain sovereignty, based on the notion of territorial integrity. In 2002, the British Government proposed the idea of joint sovereignty with Spain. However, in a referendum that year, almost 99 per cent of Gibraltarians voted against the proposal.
With the surprise election of the socialist PSOE party in Spain (PM - José Luis Rodriguez Zapatero) after the Madrid bombings in March 2004 and their belief in devolution, the political climate has become more benign for Gibraltar. At the end of 2004, Spain agreed that representatives of Gibraltar should be included in negotiations and a Tripartite Forum was convened. Whilst not giving up its claim to sovereignty, Spain has decided to concentrate on practical co-operation.
On 26th July 2006, the Tripartite Forum announced that it had reached agreement on a number of matters, including opening Gibraltar airport to joint use and flights from Spain and elsewhere in Europe; Spain recognising Gibraltar's international dialling code and enabling mobile phones; easing the border crossing (red and green channels), and solving the plight of Spanish workers, who lost their Gibraltar pension rights when the border was closed in 1969. All these matters were confirmed at a Ministerial meeting on 18th September 2006.
Gibraltar is part of the European Union by virtue of article 227(4) of the Treaty of Rome (as subsequently amended), as a European Territory for whose external relations a Member State (UK) is responsible. However, Gibraltar has derogations from the Common Customs Tariff, the Common Agricultural Policy and Value Added Tax (VAT).
As part of the EU, Gibraltar is required to transpose all EU law into local law. This is a burden for such a small community, but it does have its advantages in that both Gibraltarian individuals (who are British passport holders) and Gibraltar companies have the Freedom of Establishment and the Freedom to Provide Services to citizens and entities of the other 27 Member States. Gibraltar's Constitution requires the Gibraltar Government to balance its budget from local tax revenues. No financial assistance is provided by Britain. In 2005/6, the Government recorded a surplus of £22.3m. The GDP of Gibraltar for 2005 was £602m which, if it was an independent country would, in terms of GDP per head, rank it 10th in the world. The average earnings per employee are £19,552. Out of 16,874 jobs in the economy, in 2006, 2,320 worked in the international financial sector.
For further information on STM Fidecs, please contact us or telephone on Gibraltar (+350) 200 42686.
