Gibraltar has a well-established banking sector with total assets and third party Funds under Management (as at March 2009) of approx. £14.2 billion and £7.8 billion respectively.  Most of Gibraltar’s banks are branches or subsidiaries of major UK and other European and US banks or financial institutions.

Gibraltar’s transition to a low tax jurisdiction (corporate tax rate of 10% from 1 January 2011 and which is applicable now for new start ups) coupled with its’ robust regulatory environment (Gibraltar is a member of the EU having joined with the United Kingdom and is required to implement all EU Directives) places Gibraltar in a good position to attract new quality business.

The conduct of banking business in Gibraltar is governed by the Financial Services (Banking) Act. Detailed rules and regulations have been issued under this Act to give effect to all EU directives relating to banking including the Deposit Guarantee Directive.

In 1999 the UK government agreed that Gibraltar had implemented the necessary standards of supervision and regulation with regards to banks which matched UK practice. This paved the way for Gibraltar to take advantage of the Single European Passport for Banking. The passport allows Gibraltar licensed banks to set up subsidiaries and branches in other EEA member states.

Responsibility for the supervision of the banking sector rests with the Commissioner of Banking (who is also the Chief Executive Officer of the Financial Services Commission). Day to day supervision is carried out by the Head of Banking & Investment Services Supervision.

The banking sector provides a wide range of services including private banking and investment services as well as corporate banking including import and export finance and commercial loans.

In addition to banks there are three building societies operating in Gibraltar all of which are branches of well known UK societies. Also, in 2002, Gibraltar gave effect to the EU Directive on E-Money which facilitates the authorisation and supervision of e-money institutions.  The benefit of being able to passport into other EEA member states is likely to attract interest in this area.

Gibraltar has in place a well established telecommunications, legal, accounting and audit platform to provide the full range of services required by banks and e-Money institutions.