The economy of Gibraltar consists largely of the services sector. While part of the European Union until Brexit, the British overseas territory of Gibraltar has a separate legal jurisdiction from the United Kingdom and a different tax system.Gibraltar Taxation home page The role of the UK Ministry of Defence, which at one time was Gibraltar's main source of income, has decreased, with today's economy mainly based on shipping, tourism, financial services, and the Internet (mostly gambling).
As of 2020, Brexit represents a major uncertainty for the Gibraltar economy.
History of manufacturing in Gibraltar
Pre-1900 History
1704 – The HM Dockyard in Gibraltar is established after the Capture of Gibraltar. The initial facilities include a quay, careening wharf, and multiple workshops. 1720 - South Mole is built during the 1720s. It is a small dockyard with a careening wharf, mast house, and multiple workshops as well. 1810 – Marcus Henry Bland arrives in Gibraltar and founds Bland Group as a shipping agency. 1840 – Coaling facilities are introduced to Gibraltar. 1891 – The Gaggero family take over operations of the Bland Group, as Joseph Gaggero buys the company.Gaggero, Joe. (2005) Running with the Baton: A Gibraltar Family History. Gibraltar: Joe Gaggero. p. 16. 1895 – Captain Augustus Phillimore's plan for a new naval dockyard is approved by Parliament.
20th-century history
1902 – An air lock diving-bell plant and barge are imported to install heavy moorings in Gibraltar's rocky seabed."Entrance to a Diving-Bell". Illustrated London News: 1 (Cover). 25 March 1906.Davis, RH (1909). Diving Scientifically and Practically Considered. Being a Diving Manual and Handbook of Submarine Appliances (6th ed.). Tolworth, Surbiton, Surrey: Siebe Gorman & Company Ltd. p. 693. 1914 – Two Bland Group ships are attacked by German submarines. 1931 – Gibraltar Airways is launched. 1969 – The Spanish-Gibraltar border closes, and the Bland Group shifts its focus to tourism. 1972 – Gibraltar Industries is founded. 1984 – The HM Dockyard is sold to A&P Group, later passed to the Government of Gibraltar as Gibraltar Ship Repair. 1990 - The HM Dockyard is taken over by Norway's Kværner, then closed in 1996 for 18 months.
Modern Day (21st Century)
2005 - Gibraltar Corporation is founded. It is a manufacturer of springs, wire forms, and metal stampings. 2020 – Bassadone Automotive Group supplies ambulances and other project vehicles converted locally from SUV vehicles to the United Nations and other agencies, employing some 320 staff across its range of activities. 2022 – The HM Dockyard is acquired by UK-based Balaena Ltd, reviving the military ship repair operation. 2022 – KeyBanc Capital Markets closes a syndication of a US$400M Senior Secured Revolving Credit Facility for Gibraltar Industries, Inc.
Sectors Shipping
Bunkering Gibraltar is one of the largest bunkering ports in the Mediterranean Sea, with 4.3 million tonnes of bunkers delivered in 2021 to over 5,500 ships. This has become the main activity within the Port of Gibraltar. Increased competition from Algeciras in 2022 resulted in a fall to around 3.4m tonnes.
Finance Until Brexit Gibraltar was a constituent part of the European Union as a Special Member State territory, having joined the European Economic Community with the United Kingdom in 1973, under the provisions of the Treaty of Rome relating to European dependent territories. However, it is exempt from the Common external tariff, the Common Agricultural Policy and the requirement to levy Value added tax.Gibraltar's EU status
Financial institutions operating in Gibraltar are regulated by the Gibraltar Financial Services Commission.Gibraltar Financial Services Commission Gibraltar has had a stock exchange since 2014, the Gibraltar Stock Exchange.
Subject to notifying the EU Commissioner, who must be satisfied that they meet certain criteria in accordance with the relevant EU Directive, Gibraltar-licensed or -authorised financial institutions can provide services throughout the EU and European Economic Area without having to seek separate licences or authorisation in the host Member State. This is known as the passporting of financial services.Gibraltar Financial Services Commission – Overview
In December 2008 in a landmark decision the European Court of Justice ruled that:
This allowed the implementation of a new low tax system which took full effect in 2010.
Referred to as an International Finance Centre,Gibraltar Financial Services Commission – Building a good reputation Gibraltar was among 35 jurisdictions identified by the Organisation for Economic Co-operation and Development (OECD) as a tax haven in June 2000.OECD, March 2002 Gibraltar Commits to Co-operate with OECD to Address Harmful Tax Practices . Retrieved on July 2006 However, the list's disclaimer states:OECD issues a disclaimer on outdated report
As a result of having made a commitment in accordance with the OECD's 2001 Progress Report on the OECD's Project on Harmful Tax Practices, Gibraltar is not included in the OECD's list of uncooperative tax havens. It has also never been listed on the FATF Blacklist of uncooperative countries in the fight against money laundering. It may also be referred to as an offshore financial centre, by international institutions such as the International Monetary Fund (IMF).IMF, 4 June 2006 Offshore Financial Centers (OFCs): IMF Staff Assessments. Retrieved July 2006.
However, in its April 2009 progress report, the OECD listed Gibraltar in the list of jurisdictions which, although committed, had not "substantially implemented" yet the internationally agreed tax standard. Following Gibraltar's signing of 12 additional Tax Information Exchange Agreements (TIEAs), as of October 2009, with jurisdictions including the UK, US and Germany, to sum 13, Gibraltar is currently listed in the OECD "white list", and is considered a jurisdiction that has substantially implemented the tax standard. It therefore shares the same status as OECD member states such as the UK, the US, Spain or Germany.
Fiscal advantages, including no tax on capital income, are offered to a maximum of 8,464 offshore qualified companies incorporated in Gibraltar.Gibraltar Tax Exempt Company Registration Changes . Retrieved on July 2006 After an agreement with the European Union in 2005, this tax exempt regime is due to disappear on 31 December 2010.
A 2007 IMF report on the regulatory environment and anti–money laundering has once again endorsed Gibraltar's robust regulatory environment.
According to the report:
In 2008 Gibraltar was listed for the first time in the Global Financial Centres Index published by the City of London Corporation. The Rock was ranked 26th in a list of 69 leading finance centres around the world based on an online survey of 1,236 business professionals, who provided a total of 18,878 assessments.Global Financial Centres Index In the most recent GFCI report of 2011, Gibraltar was ranked 63rd in the world, and 8th of the leading offshore financial centres (OFCs).
The Tax Justice Network ranked Gibraltar at No. 43 out of 71 jurisdictions on its 2011 Financial Secrecy Index. Gibraltar's "secrecy score" was 78, equating to Switzerland in that category.
Gibraltar was also ranked in the top 20 centres for e-readiness, coming 20th after major capitals and leading offshore centres.Gibraltar Chronicle Story
Tourism
Tourism in the British territory often provides as a large economic factor for the city. The territory gets about 10.5 million tourists annually, of which, about 80% of all people who arrive on Gibraltarian soil come from the nation of Spain. According to statistics recorded in 2024, tourism ramps up more so in the latter half of the year, peaking at around October.
Tourist spots in the territory often compose of geographical features on the Rock of Gibraltar, including Apes' Den, St. Michael's Cave, along with many others outside of the rock like the city center.
Internet business Gibraltar offers a favourable tax system, good internet connectivity along with a well-developed regulatory system. All gambling operations in Gibraltar require licensing under the Gambling Act 2005. The Gibraltar Regulatory Authority is the Gambling Commissioner under the Gambling Act 2005, and therefore the regulatory body.The Gibraltar Regulator The UK has published plans to protect online gamblers from crime and exploitation by banning gambling adverts from poorly regulated countriesUK Gambling ad ban plans published which specifically mention Gibraltar as an approved location.
Defence spending
The UK's Ministry of Defence was originally the mainstay of Gibraltar's economy but this has greatly reduced to around 6% of the gross domestic product. In 2006 the Ministry of Defence announced that the provision of services to the military base would be contracted to make further cost savings. This was finalised in January 2007.MoD to make cost cuts
Taxation
In 2019, the International Agreement on Taxation and Protection of Financial Interests between Spain and the United Kingdom on Gibraltar was signed by all three countries. This agreement covers such issues as tax co-operation between the authorities in Gibraltar and Spain, the criteria for tax residence of individuals and companies and procedures for administrative cooperation.
Interaction with the nearby area In September 2009 the Gibraltar Chamber of Commerce released an Economic impact study and analysis of the economies of Gibraltar and the Campo de Gibraltar produced by Professor John Fletcher of Bournemouth University.chamber releases report on economy The report aimed at clarifying the effects of Gibraltar's economy on the Campo area. It demonstrated that Gibraltar's economy has a significant and very positive economic impact on the Campo de Gibraltar. It also noted that the Campo region played a "significant role [..] in Gibraltar's economic development as well", concluding that "[b]oth economies and societies would be the poorer without the other..."An Economic impact study and analysis of the economies of Gibraltar and the Campo de Gibraltar , by John Fletcher, September 2009. Introduction (page 2)
Its conclusions were:An Economic impact study and analysis of the economies of Gibraltar and the Campo de Gibraltar , by John Fletcher, September 2009. Executive Summary (page 6)
Economy in detail
Gibraltar benefits from an extensive shipping trade, a well regulated international finance center, tourism, and has become a global leader in the virtual gaming industry.FCO company profileGibraltar proves a winning bet
Self-sufficient Gibraltar benefits from an extensive shipping trade, offshore banking, and its position as an international conference center. The British military presence has been sharply reduced and now contributes about 7% to the local economy, compared with 60% in 1984. The financial sector, tourism (almost 5 million visitors in 1998), shipping services fees, and duties on consumer goods also generate revenue. The financial sector, the shipping sector, and tourism each contribute 25%–30% of GDP. Telecommunications accounts for another 10%. In recent years, Gibraltar has seen major structural change from a public to a private sector economy, but changes in government spending still have a major impact on the level of employment.
Figures from the CIA World Factbook show the main export markets in 2006 were United Kingdom 30.8%, Spain 22.7%, Germany 13.7%, Turkmenistan 10.4%, Switzerland 8.3%, Italy 6.7% while the corresponding figures for imports are Spain 23.4%, Russia 12.3%, Italy 12%, UK 9%, France 8.9%, Netherlands 6.8% and United States 4.7%.