20131021 gibraltar by new statesman

Download 20131021 gibraltar  by new statesman

Post on 14-Sep-2014

599 views

Category:

Economy & Finance

2 download

Embed Size (px)

DESCRIPTION

Article by the New Statesman on Gibraltar. 'It has become an epicentre of the electronic gambling industry, with almost 30 companies licensed to operate there. It is home to a large number of financial services and shipping companies. This has undoubtedly been influenced by its low tax regime; but dont fall for the hype it is a rigorously enforced regime, compliant with more European directives than many of its neighbours. Its location means it is a natural gateway both to Europe and to Africa. These may be among the factors apparently insulating it from the worlds economic downturn, through which it continued to grow albeit at a slower rate than before. Its growing its software industry and angling its tourism to ensure longer visits from people at different times of the year. Its tiny all right but its prospects have never been so. ...'

TRANSCRIPT

<ul><li><p>Small place, big market</p><p>Gibraltar: SteppingStone to Europe</p><p>Sponsored byHM Government of Gibraltar</p><p>$</p><p>01 Gibraltar Cover:Statesman supplements 15/10/2013 11:55 Page 1</p></li><li><p>2 | NEW STATESMAN | 18-24 OCTOBER 2013</p><p>FACTS &amp; FIGURES</p><p>Tax information exchange agreements</p><p>Ranked in toparea for growth</p><p>Growth per annum </p><p>Vessels pass through thestrait of Gibraltar annually</p><p>Gross income insurance</p><p>GDP Forcast</p><p>Shipping is 25%of the economy</p><p>Gibraltar economic facts</p><p>Source: Gibraltar Finance Centre</p><p>GR</p><p>APH</p><p>ICS </p><p>BY</p><p> SE</p><p>AN</p><p> ME</p><p>SSIN</p><p>02-Infographics:Statesman supplements 15/10/2013 12:24 Page 22</p></li><li><p>18-24 OCTOBER 2013 | NEW STATESMAN | 3</p><p>New Statesman7th FloorJohn Carpenter HouseJohn Carpenter StreetLondon EC4Y 0ANTel 020 7936 6400Fax 020 7936 6501info@newstatesman.co.ukSubscription enquiries,reprints and syndication rights:Stephen Brashersbrasher@newstatesman.co.uk0800 731 8496</p><p>Supplement EditorGuy ClappertonDesign &amp; ProductionLeon ParksGraphicsSean Messin</p><p>Commercial DirectorPeter Coombs020 7936 6753Account DirectorEleanor Ng 020 7936 6417</p><p>Small Rock, big business</p><p>The Chief Minister speaks P4</p><p>Business and nature P14</p><p>4 The Chief Ministers storyGibraltar is looking forward and growing, says Fabian Picardo</p><p>8 The Rock is open for businessMany business sectors are thriving in Gibraltar, says Christian Hernandez</p><p>10 Financial state of the nationThe hard facts are laid out by the Gibraltar Finance Centre</p><p>12 Prosperity from going it aloneThe Rock is great, its neighbour should reciprocate, says William Dartmouth MEP</p><p>14 Business and ecologyThe environment is vital and can help businesses thrive, says Dr John Cortes </p><p>The paper in this magazineoriginates from timber that issourced from sustainableforests, responsibly managedto strict environmental, socialand economic standards. The manufacturing mills haveboth FSC and PEFCcertification and also ISO9001and ISO14001 accreditation.</p><p>Gibraltar is tiny. It is far from the UK, almost in Africa, but by dint of history initially in the Treaty of Utrecht but through manysubsequent agreements, reluctant or otherwise it has been British for 300 years. Strategicallyimportant during the Second World War, it has now become economically veryimportant to a lot of companies.</p><p>It has become an epicentre of the electronicgambling industry, with almost 30 companieslicensed to operate there. It is home to a largenumber of financial services and shippingcompanies. This has undoubtedly been</p><p>influenced by its low tax regime; but dont fallfor the hype it is a rigorously enforced regime,compliant with more European directives thanmany of its neighbours.</p><p>Its location means it is a natural gateway bothto Europe and to Africa. These may be amongthe factors apparently insulating it from theworlds economic downturn, through which itcontinued to grow albeit at a slower rate thanbefore. Its growing its software industry andangling its tourism to ensure longer visits frompeople at different times of the year. Its tiny allright but its prospects have never been so. l</p><p>CO</p><p>VER</p><p>: SH</p><p>UT</p><p>TER</p><p>STO</p><p>CK</p><p>/DE</p><p>SIG</p><p>N B</p><p>Y L</p><p>EON</p><p> PA</p><p>RK</p><p>S</p><p>First published as a supplement to the New Statesman18-24 October 2013. New Statesman Ltd. All rightsreserved. Registered as anewspaper in the UK and USA.</p><p>This supplement, and other policy reports, can be downloaded from the NS website at newstatesman.com/supplements</p><p>A centre for commerce P8</p><p>CONTENTS</p><p>ARTICLES</p><p>03 contents:Statesman supplements 15/10/2013 12:08 Page 3</p></li><li><p>4 | NEW STATESMAN | 18-24 OCTOBER 2013</p><p>Recent blockades on its border havethrown the news spotlight on toGibraltar once more. The Spanish,to outsiders, seem to have an ex-cellent argument; just look at the</p><p>map and where the Rock is located this isobviously Spanish territory. Its an under-standable point of view.</p><p>History, however, can make a mockery ofcommon sense. If the territory is obviouslya part of Spain, then Spain, as its part of thesame land mass, is surely part of Portugal.Or the other way around. Or part of a singlecountry called Europe. And how comeEurope isnt part of Asia, anyway? Coun-tries and their boundaries have for a longtime been defined by agreement and treatyfollowing conflict, Gibraltar among them.</p><p>This is why it is currently British and hasbeen for 300 years in other words, longerthan America has been American. And thepeople are very pro-British one way to en-sure a population is fiercely proud of its na-tionality is to challenge it. If self-determin-ism means anything, the Rock is British.</p><p>Its important to understand this point ofview even if you dont share it, to compre-hend the backdrop against which the HonFabian Picardo became Chief Minister ofGibraltar in December 2011. Heading up acoalition between the Liberals and theGibraltar Socialist Labour Party, which hadbeen in opposition for 16 years, he hasfound himself in the middle of the latest in along line of tense exchanges betweenGibraltar and its immediate neighbour.</p><p>Gibraltar: the Chief Ministersstory</p><p>by Guy Clapperton</p><p>Recent border skirmishes with Spain have highlighted the tensions between theBritish territorys history and geography. How-ever, Fabian Picardo believes the place is asound place to invest</p><p>INTERVIEW</p><p>Normally, however, the 30,000-strongpopulation conducts its business as usualand connects not only with Spain and theUK, but with Africa, visible on a clear dayfrom the top of the Rock. </p><p>For such a small place it attracts a lot of in-terest, the chief minister agrees. Gibraltarrepresents added value as a place to do busi-ness within the European Union, he ex-plains. Its a kind of stepping stone for peo-ple who are establishing themselves withinthe EU from outside, and its a great placefor headquarters if you are already within it.We apply all the standards you would ex-pect to see within the City of London to, forexample, the financial services that are pro-vided here, and in respect of gaming we areundoubtedly the most highly regulated ju-</p><p>4-7 Chief Minister:Statesman supplements 15/10/2013 12:48 Page 4</p></li><li><p>18-24 OCTOBER 2013 | NEW STATESMAN | 5</p><p>risdiction in the world. This might comeas a surprise to people who have boughtinto the classic caricature of Gibraltar assome sort of tax haven. The facts arestraightforward; tax is low (the jurisdic-tions Finance Centre outlines them onpage 10), but regulation of certain indus-tries and the imposition of these taxes isstrict. Contrary to the beliefs of some peo-ple in the UK and elsewhere, Gibraltardoesnt cost us anything. There are Britishmilitary bases there, as there are in a num-ber of countries, but in every other sensethe Rock is financially self-sufficient.</p><p>Picardo is in no doubt that as a combina-tion it works. Its why we have attractedthe biggest names in online gaming. I like todescribe Gibraltar as the Silicon Valley of</p><p>online gaming and I believe all sectors hereare striving for that same level of excel-lence. By this, he explains, he means an ex-cellent environment in which to do busi-ness, and, to boot, in southern Europe, sobetter weather!.</p><p>Gaming has certainly been an importantfacet of Gibraltarian business and it is in-structive to consider the other industries ithas brought through in its wake. Wereseeing a software industry develop aroundthose who are established in gaming here,he says. The gaming companies neededwebsite developers, then suddenly thosecompanies found they needed apps for thevarious different devices on which theirclients wished to play and the skills to ac-commodate these changes are migrating</p><p>towards the Rock. We can also see an in-dustry building up throughout the finan-cial services industry based around soft-ware, he adds. We have a critical mass ofpeople with the software skills. Not asmuch as wed like, but there is a body ofpeople gathering around the industries thatgive them work. They have skills in thenew computer language, HTML5, and themove towards different devices for the endcustomer. It reminds me of Silicon Valley.We may not produce a Microsoft or Appleevery year but theres always a companydoing well and innovating.</p><p>If London has its Silicon Roundabout,though, isnt there a danger of simple band-</p><p>The Rock: a stepping stone for business </p><p>4-7 Chief Minister:Statesman supplements 15/10/2013 12:48 Page 5</p></li><li><p>6 | NEW STATESMAN | 18-24 OCTOBER 2013</p><p>waggoning when it comes to encouragingtechnology firms to set up on the Rock? Picardo acknowledges the possibility, butpoints to the immediate and direct conse-quences of what is happening in Gibraltar.In our economy, if I were to inject an extra1m into the health service we would all seea huge change in the health services we re-ceived. Thats the sort of immediacy there isin an economy the size of Gibraltar, hesays, and the impact of large amounts ofnew companies is evident very quickly inthe same way. Its possible to see whatsoftware companies around the financialservices and gaming industries are doingand how likely they are to achieve criticalmass and survive in the context of how theindustries they serve are doing. </p><p>The economy was strong before remotegaming arrived, but its arrival meant theRock had to be ready for an increase in mod-ern business. There has been investmentin Gibraltar airport, by the previous admin-istration and there are investments in infra-structure by the current government.These are not just in relation to broadbandavailability, but also in relation to power,port infrastructure all these things are es-sential to run a proper diversified modernEuropean economy, says Picardo. Not thathe feels the government should be in chargeof business. The government has a role to</p><p>play in that, which we see as facilitatorrather than intervenor.</p><p>So much for the sales pitch. What canpeople expect from Gibraltar when theyturn up with a view to setting up a businessor putting an existing company on to theRock? We are governed by the rule of lawand this is very much part of what Gibraltarrepresents. The British way of doing thingsis hugely important in a place where peoplewant to establish themselves, says Pi-cardo. In a place where there is certainty,</p><p>where resolution of disputes is fair, equi-table and quick in that context, what wedo from the point of view of taxation, whatwe do from the point of view of social in-surance, its a good place to have large num-bers of employees and to set up a corpora-tion. Tax competition, he says, is a goodthing to offer positively.</p><p>He does not accept the commonly heldview that its some sort of tax dodgershaven, though. In response to the sugges-tion that Gibraltar is anything but an on-shore financial services centre, you just</p><p>have to look at the position of the UK, hesays. The difference between corporationtax in the UK and Gibraltar is smaller thanthe difference between corporation tax inthe UK and Spain, or the UK and Ger-many. Gibraltar is not on any reasonablyestablished blacklist, he points out. We areon the whitelist of the OECD, were on thewhitelist of the IMF, were signatories to sixinformation exchange agreements, wecomply with European Union rules onmoney laundering and on directives that af-fect financial services. </p><p>In addition, Gibraltar complies with allEuropean directives and is ahead of manymember states in this respect, he adds in-cluding Spain, which allows SICAVs in-vestment vehicles allowing investors to pay1 percent tax. I think often people have tolook beyond the rhetoric, he says. It isworth noting, however, that Spain is farfrom the only country to allow SICAVs the term itself is French, short for socitd'investissement capital variable, they alsooperate in Luxembourg, Switzerland, Italy,Belgium, Malta, France and the Czech Re-public and there are restrictions.</p><p>So, people wanting simply to avoid taxshould also avoid Gibraltar? Gibraltar iscompletely opposed to tax evasion and anymechanism somebody may want to put inplace to facilitate it, says Picardo. Youwould find it very difficult to find peoplewho were in Gibraltar to evade tax.</p><p>As laid out clearly many times, theGibraltarians feel very strongly about theirright to be British. Nonetheless, one canthelp wonder whether British is reallysuch a badge of quality for investors fromelsewhere. The kitemark of the UK rule oflaw is so attractive, argues Picardo. Itswell known that people have come to Lon-don to sue in defamation actions, and incommercial actions. This is not becausethe laws are skewed in favour of theclaimants, he believes, but because there is arecognition that the UKs justice system isvery good indeed. </p><p>This has been replicated by Gibraltar for anumber of years. People who have donebusiness in other areas may find, he says,that foreign systems are less familiar andtake longer in dispute resolutions, share-holder disputes and so forth. We do thatvery well in Gibraltar. We do ship arrestvery well because of our location and because we can apply the English rules for</p><p>Fabien Picardo, Chief Minister of Gibraltar</p><p>INTERVIEW</p><p>The kitemark of the UK ruleof law is attractive to many</p><p>businesses</p><p>4-7 Chief Minister:Statesman supplements 15/10/2013 12:27 Page 6</p></li><li><p>18-24 OCTOBER 2013 | NEW STATESMAN | 7</p><p>the arrest of ships subject to the modifica-tions necessary for Gibraltars circum-stances. Replicate that rigour across thesectors and Gibraltar is well known for itseven-handedness.</p><p>Unless youre just across the border inSpain. It is indeed the case that many Span-ish people commute to Gibraltar every day;there is little or no issue on a personal level.In terms of leadership, recent times haveseen the Spanish authorities complain tothe UN about British dominion overGibraltar and, of course, the blockade.What would the chief minister say aboutsetting up in a territory in which, realisti-cally, this issue is going to flare up every fewyears? It depends on which sector yourein, he says. If you were thinking of open-ing up a small shop in our main street thatdepends on people crossing the frontier astourists to come and shop, you might takeone view. Just about every other sector ofthe economy has been insulated, he says.There has been a lot of noise from Madrid,but in terms of action theres just been anannoyance as people wait for long periodsto cross from Gibraltar into Spain and viceversa.</p><p>It would have more of an effect on peoplewanting to live in one territory and work onthe other, he suggests, but even they arentsuffering unduly. In fact, most people wholive in Spain and work in Gibraltar haveknown this can be an issue, so people tendto park their cars in Spain and walk to work in Gibraltar. Given the size of theRock, this is achievable for most people. It'san annoyance, he says, because life shouldbe easier. </p><p>Day to day, the Rock is up for business asusual and Picardo is considering which in-dustries are likely to be successful in the fu-ture as well as in the present. There is athriving retail sector on the main street andhe believes this will soon be backed by asubstantial online e-commerce market.That is already developing very nicely. Ituses the internet as a portal for the sale were l...</p></li></ul>