Gibraltar is launching a campaign to attract UK-based hedge funds to move to the British overseas territory with the promise of continuing to offer 'low-cost tax efficiency'.
Chief minister Fabian Picardo has had a series of meetings and dinners with hedge fund managers which included the distribution of promotional material stating 'Gibraltar's tax laws are central to its position as a thriving fund domicile'.
The material also highlighted the territory's 10% corporation tax, and the fact that hedge fund managers could see their income tax bill reduced if they were granted 'special tax status' as a 'high executive possessing special skills'. This would cap an individual's tax bill at £30,000 no matter how much they earn.
Gibraltar's pitch for additional hedge fund business comes shortly after David Cameron's letter to all Britain's crown dependencies and overseas territories telling them to 'get our own houses in order' in advance of action by the G8 and others on international tax avoidance.
Picardo denied Gibraltar was a tax haven and said the territory complied with all EU tax and transparency regulations. The number of fund based there has gone up from 20 in 2006 to 150 currently, with £3bn of assets under management.
'This is a process that is going to continue. Gibraltar presents a serious advantage in the interest of shareholders. At the end of the day it is in the interest of shareholders that hedge funds maximise revenue,' Picardo said.
Separately, the government in Andorra has said it is to introduce a personal income tax for residents for the first time as part of a move to 'progressively bring its tax system in line with international standards'.
Andorra, which has a population of 85,000 and lies between Spain and France, has a history of banking secrecy and duty-free trade. However, the financial crisis and a fall in tourism has seen the country go into recession, and the government says it will be introducing a bill to create an income tax by the end of this month. A system of VAT was brought in at the beginning of this year.
Andorra has previously signed agreements with France and Spain to collaborate in cross boarder fraud investigations, as a result of which the country was removed from the Organization for Economic Cooperation and Development (OECD) blacklist of 'uncooperative tax havens'.
