Time to go Offshore?

Many South African Families and investors are considering whether they should place a portion of their portfolios offshore. The vast choice of offshore jurisdictions can be confusing and misleading. However, the stable jurisdiction of Gibraltar offers advantages relevant to South Africans more than any other jurisdiction. Europa Trust Company Ltd reports on Gibraltar.

A dreary outlook for the domestic economy of South Africa, the drop in the Rand and the sovereign ratings downgrade has got a lot of South African families and investors considering whether they should place a portion of their portfolios in offshore structures.The most important uses of offshore trusts and companies are trading, investment holding financing, consultancy of professional offerings, patent, royalty and copyright protection, ship administration and yacht owning, personal and company tax planning.

Once a decision has been made with regards to moving part of a portfolio offshore, the obvious question remains; “where” and “which jurisdiction” ?
When choosing an offshore location it’s hard to look beyond self-sufficient Gibraltar; an English speaking economy largely based on financial services, shipping, online gaming and tourism. It is a recognised well-regulated finance centre.

Gibraltar is located two and a half hours flying time from London and is commonly referred to as “The Rock”. It is a British territory, geographically forming part of the European mainland and politically, within the European Union. Being at the entrance of the Mediterranean, Gibraltar is described as the Gate-Way to the continents of Europe and Africa for businesses or families wishing to expand into these markets. As part of the European Union, Gibraltar provides easy access to the EU financial markets and as such is subject to its directives and regulations.

The jurisdiction has established itself as a prosperous financial centre over the last 40 years. Gibraltar is a popular financial destination for an eclectic mix of international executives, authors, sportsmen, corporations, individuals, celebrities, families and many others, who want to achieve their financial and business objectives. Gibraltar’s client demographic covers all four corners of the globe and its business and investment interests are likewise spread across the globe, and managed from Gibraltar.

The most popular products and services offered by Gibraltar are Trust & Company formation and management, banking, insurance and reinsurance, captives, fund management and fund administration, investment services, experienced investor funds, and maritime services. New Islamic products, e-gaming and hedge funds are likely to play a more important role in the future securing Gibraltar’s position ahead of its competitors.

The jurisdiction benefits from a stable and growing economy and a favourable tax regime. Its political stability, robust commercial and professional infrastructures contribute to its attractiveness as a financial jurisdiction. It has an International airport and excellent road and sea links into Europe and Africa. The currency is the Pound Sterling, and Euros are widely used.

Gibraltar is a cooperative and responsible jurisdiction, regulated by a supportive regulator known as the Gibraltar Financial Services Commission. Gibraltar is fully committed to international standards, and has long been relieved of the stigma of a “tax-haven”. Gibraltar is not seen by authorities or business counterparts as some ‘exotic’ island in the middle of a vast ocean. It is a responsible, progressive and competitive international financial centre with a stable government, established infrastructure and British legal system.

Why is Gibraltar perfect for South Africans?

Gibraltar is a stepping stone from Africa into Europe and more importantly, the European Union. Gibraltar is on the same time-zone as South Africa for six months of the year and therefore observes a uniform standard time for English legal, commercial, and social purposes.
South Africans would find the main advantages and benefits of Gibraltar are that it is a low tax jurisdiction and is VAT free. Gibraltar has a low corporate tax-rate of 10%, however only profits accrued in or derived from Gibraltar will attract corporate tax. Gibraltar also has no capital gains, estate duty, wealth, inheritance, gift or other capital taxes.

Many South African families and investors who are considering placing a portion of their portfolios offshore can feel confident in considering Gibraltar. The location, advantages and international status of the jurisdiction put Gibraltar ahead of other jurisdiction considerations for South Africans.