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Residence (low-tax) in Gibraltar


If you are looking for a change of lifestyle, you will find that Gibraltar holds many attractions. The climate is good and we miss all the extreme weather conditions which both northern and southern countries have to endure annually. The standard of living is that of northern Europe. Education and public medical care are of the highest level. Southern Spain is a natural extension of Gibraltar and access to the rest of the world via London or Madrid is available by air.

The UK, as the country responsible for Gibraltar’s foreign affairs, is in the process of negotiating a Treaty with the EU Commission to extend the Schengen travel area to Gibraltar. An agreement of principles is already in place and a Treaty is in the process of beign negotiated. This would be a significant development as Gibraltar residents would then be entitled to passport and visa free travel to Spain and the other Schengen countries. In effect, Gibraltar residents would enjoy free movement across all EU States making residence in Gibraltar even more attractive.

Gibraltarians are enterprising and hardworking and have perfected a happy balance between industrious activity and leisurely enjoyment of life. Highest quality accommodation is available both for purchase and rental. All the commercial and business facilities and high-quality professional services which may be required also exist.

EEA nationals (EU as well as Switzerland, Norway and Iceland) are entitled. Such a resident would be liable to Gibraltar tax on their income in the same way as Gibraltarians who are ordinarily resident in Gibraltar.

There are two special low-tax regimes available in Gibraltar which are known locally as Category 2 Residence and HEPPS status. Further information appears below.


In Gibraltar this form of tax residence is popularly known as Category 2 Status.

Upon being granted Category 2 tax status, applicants will be issued with a tax ID number and they will pay a relatively low amount of tax on their worldwide income in Gibraltar. This can assist persons who have left, or are leaving, a higher tax jurisdiction in proving that they are tax resident in Gibraltar and are paying their taxes here.

To qualify for Category 2 Status applicants must establish two main things: (1) ownership of assets, which can include property and shares, worth in excess of £2 Million and (2) the availability to the applicant of approved residential accommodation in Gibraltar for their exclusive use.

Proof of Wealth

Bank statements or letters from a bank manager or accountant are acceptable as proof of wealth. Non-monetary assets such as shares and property are acceptable upon production of suitable documentary evidence such as an accountant’s valuation or surveyor’s report.

Most applicants either produce a bank statement/portfolio valuation or a letter from their accountants which details their net wealth.

Approved Property

A residential property approved by the Finance Centre Director must be purchased or rented within two months of being granted Category 2 Residence.


The amount of tax payable to the Gibraltar Government currently ranges between a minimum of £37,000 to £44,740 per annum. The precise amount of tax will depend upon: (a) how much money is remitted to the applicant in Gibraltar and (b) the amount of taxable income earned by the applicant within Gibraltar in each financial year. Payment of the tax is due on 1st November in each year.

Upon being approved, applicants must pay a deposit of £44,740 as a guarantee for future payments of tax. Upon relinquishing Category 2 Status (and provided that no tax is outstanding), the Gibraltar Government will return this sum.

The tax year runs from 1st July to 30th June. A return needs to be filed annually with the local Income Tax Authorities.

Application Procedure

The following documents must be produced.

Documentation showing net wealth in excess of £2 Million.
A character reference from a bank and a second one from a lawyer, accountant or other bank.
A CV documenting the applicant’s wealth source of wealth.
An application form, which we will provide, together with payment of a non-refundable application fee of £1,100 payable to the Gibraltar Government.

Spouses & Children

There is provision in the law to allow spouses and children (under 18 or in full time education) to be granted Category 2 Status under the same certificate as the principal applicant.

A spouse can also elect for their income to be considered a part of the applicant’s and this can be declared in the same tax return.


HEPPS status allows specialist skilled workers who earn more than £120,000 per annum to have an attractive fiscal status in Gibraltar. The company which employs the individual needs to make the application and, upon it being successful, the individual will be able to limit their tax liability to the first £160,000 only. In practice this currently amounts to just under £43,000 per annum. The HEPSS individual will not pay tax on any remuneration over and above the £160,000 paid by the employer.

The requirements are somewhat similar to applying for Category 2 Status and we can advise on and guide applicants through the process.

Agreement to extend the Schengen travel area to Gibraltar

Before the end of the Brexit transition period on 31st December 2020, the UK and Spain reached an agreement of principles in respect of free movement of people to and from Gibraltar. A transitional period has been agreed where the status quo of free movement of people across the Gibraltar land frontier has been maintained. This period of time will be used to negotiate a formal Treaty between the UK and the EU in this regard. Negotiations are ongoing with all main stakeholders (Spain, the UK and Gibraltar) having indicated their willingness to conclude such a Treaty as soon as possible.

The Treaty will provide for Gibraltar joining the Schengen travel area for passport free travel to Spain and the other Schengen countries. In turn, all Schengen nationals will be able to travel to Gibraltar without undergoing passport checks.

Right of admission for European Economic Area (EEA) nationals

EEA nationals are allowed to enter Gibraltar upon production of a valid national identity card or passport issued by an EEA State. A family member of an EEA national is also admitted into Gibraltar on the same basis.

Gibraltar controls its own immigration policy and does not follow criteria set by the UK. It is envisaged that there will be no change to Gibraltar’s policy and EEA nationals will continue to have the right of admission to Gibraltar.

Application for residency

In order for a person to attain residency they must satisfy the Gibraltar authorities that they are of good character and that granting them residence is in the interests of Gibraltar. The application should be directed to the Civil Status and Registration Office. The vast majority of applications for residence by EEA nationals are accepted.

Residency requirements

The Immigration, Asylum and Refugee Act provides details on the fundamental requirements which need to be fulfilled for the issue of such a residency permit. In addition, the Government of Gibraltar has issued guidelines highlighting factors which are of most importance in considering applications for residency. These can be summarised as follows:

  • Suitable accommodation is held. This can be achieved by the purchase or rental of a property sufficient in size to accommodate the applicant and all their family for residential purposes;
  • The applicant must establish that they are in good health;
  • The applicant must establish that they have adequate financial resources to maintain themselves and their family without recourse to Gibraltar public funds.

In order for the applicant to prove the latter requirement, applicants need to provide evidence that their status falls under any of the following categories:

  • jobseeker;
  • worker;
  • self-employed; or
  • self-sufficient (which includes Category 2 Individuals)

Services our firm can offer

We are able to advise and assist with all matters relating to applying for:

  • Category 2 Individual Status;
  • HEPSS; and
  • Ordinary residence.

In addition, we offer the following services to our High-Net-Worth Individual clients:

  • preparation of Gibraltar income tax return and other compliance matters;
  • establishment of Gibraltar companies to support their business;
  • tax planning;
  • succession planning;
  • replacing current driving licence for a Gibraltar licence;
  • other ‘concierge’ services, that is, assistance in making your relocation to Gibraltar all that much easier.