Economy

The economy used to be substantially dominated by the British naval dockyard and military presence, but major cut-backs over the last 20 years 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. More than 5m people visit Gibraltar annually, many of them evidently stepping ashore from cruise liners. There is a fair amount of local construction work on the hotel/conferencing sector, and to accommodate wealthy expatriates.

Offshore Financial Sector

Gibraltar's Finance Sector was created on 1960’s. Since that time it has spent much of its efforts in specifically developing the areas of banking, insurance and asset-holding activities for corporate and private investors. The banking and insurance sectors are important and strong pillars of the Finance Sector of the Gibraltar.

One of the most important developments in recent years in the field of banking and insurance is that local operators have gained direct access to the European Union's financial markets through the provisions provided by European directives.

Gibraltar is a well-regulated Offshore Finance Center. The Financial Services Commission is required by law to establish supervisory practices in regulating the provision of banking, insurance and other financial services in Gibraltar. It implements supervisory principles and standards equivalent to those in the European Union and the United Kingdom.

Foreign Investment Regime

Foreign investment in Gibraltar is actively promoted by the government largely to create job opportunities. Tax concessions are governed by The Development Aid Ordinance. Concessions are available to light manufacturers who intend to export from Gibraltar. Any corporation with a development aid license granted by the governor for a project that will benefit Gibraltar's economy is exempt 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, the project must 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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