Gibraltar continues enjoying GDP growth at around 8% for 2015 and virtually full employment.
In the last 30 years, The Rock’s economy has undergone a huge transformation, from one dominated by, and reliant upon, the garrison and related public-sector activities, to an economy which is driven by the private sector.
The three main economic pillars are financial services, tourism, the port and shipping services. Another important sector is on-line gaming.
All of these are served by a well-developed professional services community, which provides advice and expertise on everything from law, trust, tax and accounting.
Gibraltar’s work-force has increased from 16,874 in 2005 to 24,422 in 2015, a rise of 50% in 10 years.
Although small in absolute terms, it is a pretty impressive achievement, particularly when set against the E'U’s rather dismal record of job creation in the last 10 years.
As Gibraltar’s economy has become more diversified and international, jobs have been created in new sectors such as e-commerce, on-line gaming and e-payments. The people needed to do these jobs have been brought from outside, predominantly from other parts of Europe, but some from further afield, including from the US and SE Asia.
Around 12,000 of the people who work in Gibraltar live across the border in Spain. The daily rush-hour to cross the frontier has just as much bustle as any big city. The salaries earned in Gibraltar are spent in Spain, helping to alleviate some of the hardship which Spain’s prolonged recession has generated.
At the macro-level, Gibraltar’s govt has generated regular budget surpluses in the last 10 years and significant improvements have also been made to the local infra-structure, including a new hospital, a state-of-the-art air-terminal and the completion of a number of govt housing projects, but Gibraltar is not resting on its laurels. It continues to attract outside investment and create new job openings.
The low corporate tax rate makes it one of the most attractive jurisdictions in Europe. The process of setting up a business in Gibraltar is different from the UK, but still relatively straightforward.
It enjoys full E'U' membership - as a UK Overseas Territory - but it is outside the E'U' Customs Union, so there is no sales tax or VAT. In addition, there are no wealth taxes, inheritance tax or capital gains taxes in Gibraltar.
Being an Overseas Territory gives Gibraltar additional security: the Foreign & Commonwealth Office is responsible for Gibraltar’s foreign affairs and the Governor is in control of the local Royal Gibraltar Police.
Gibraltar is largely autonomous and self-sufficient. It passes its own laws with its own parliament, raises its own taxes and spends its own money. There is no subsidy paid to Gibraltar by UK tax-payers and Gibraltar’s govt has signed Tax Information Exchange Agreements with 30+ jurisdictions, many of which are in the G20.