Financial Incentives

Under the Government’s Enterprise Initiative businesses may benefit from a comprehensive range of assistance to help both start-up and expanding businesses. The Government has introduced three schemes offering financial assistance, brief details of which are given below:

European Union funding has been a major source of finance for economic regeneration in Gibraltar in recent years. Gibraltar has been entitled to support through the European Regional Development Fund (ERDF) (for business development, tourism, technology transfer and infrastructure projects) and the European Social Fund (ESF) (for training and retraining projects). Gibraltar currently participates in the Objective 2007-2013 EU Programme.

Gibraltar also benefits from funding under the European Social Fund which primarily targets development of training activities and development of skills. The present Structural Fund Programmes focus mainly on employment and skills issues and will support projects to increase competitiveness, employment and skills and encourage diversification and use of new technology Both the ERDF and ESF will operate within the Competitiveness and Employment Objective which is where Gibraltar becomes eligible.

Under the present programme Gibraltar has been allocated €5.8 million with an equivalent amount contributed by Government. Therefore monies available under the objective amount to €11.6 million.
Wholesaling, retailing, financial services and mobile investments are areas of business activity not eligible for funding.

Development Aid

The Development Aid Act provides that licenses may be granted for certain development projects. Applications for a Development Aid license must be made to the Development Aid Advisory Committee which is headed by the Minister for Trade and Industry. If the application is successful and a Development Aid license is granted, the Development Aid Advisory Committee will determine what portion (in percentage terms) of the total qualifying capital expenditure is available for tax relief. The percentage reflects the perceived economic and social benefits that the project will bring to Gibraltar.

The Development Aid license entitles the developer to exemption from corporation tax in respect of any gains or profits from the relevant development until aggregate gains less losses first exceed the approved portion of capital expenditure on the project.

The profits of the concern may also be distributed to the beneficial owners free of any taxes up to the amount granted under the licence.

Interest received on loans made to any person for the purposes of a development project to which Development Aid applies is exempt from income tax, provided the terms and conditions of the loan have been approved by the Minister responsible for Trade and Industry.

In addition, occupiers of property relating to a project which has been granted a Development Aid licence are automatically entitled to relief on the rates payable. This takes the form of an allowance in percentage terms) of the amount which would normally be payable.

For more details please refer to our publications "Doing Business in Gibraltar" and "Gibraltar Tax Facts".