Gibraltar - your regulated payment
gateway to the UK

Can financial services firms passport into the UK?

Yes, Gibraltar firms can continue to passport into the UK following Brexit. Regulated European businesses from the EEA are no longer able to passport and so must become authorised in the UK or Gibraltar in order to service the UK market.

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The Issue: The UK regulators, particularly the FCA, are overwhelmed with administrative issues arising from decoupling from the EU, staff turnover problems and an ever increasing compliance burden for itself and its authorised entities. The sheer size of the UK market makes the FCA’s role challenging, and the ever broadening regulatory landscape only makes that challenge more acute.

In addition, Brexit has meant that European firms wishing to access the UK financial services market have had to become authorised directly in the UK (or in Gibraltar and then passport into the UK from Gibraltar)

The difficulty in engaging and maintaining relationships with the same case officers during UK applications and having a “one to one” regulator relationship means that UK authorisation applications and ongoing maintenance of authorisation is very costly and uncertain for payment and e-money businesses.

For example, over 50% of applications for e-money and payments services licences fail in the UK (and we are advised that recently the current success rate is closer to 5% when factoring in simple abandonment of application):

In the crypto asset space, the difficult situation facing persons seeking AML registration with the FCA led to a large number of operators abandoning the UK. 

“The process has been a total disaster from the FCA’s side of things”

Some of these operators sought VASP registration in Gibraltar, given that the process only takes 2-3 months here given that it has been set up to be supportive of VASP registrations.

Make Gibraltar your payments passport into the UK

The solution: As a small jurisdiction, it means that access to the regulators, government departments and service providers is face to face and more immediate. Old fashioned human interactions are the key to success here.

Ramparts has put together a fixed fee package to make it easier for UK facing payment services and e-money businesses to move to Gibraltar and passport into the UK.  This can involve an international group structure that has a UK presence as needed (for example via a technology, marketing or human resources service company in Gibraltar or a UK holding company). Please see our Fintech & Payments section for more info.

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About Gibraltar

• English law
• Passporting: Regulation 4 of the Gibraltar Financial Services (Passport Rights and Transitional Provisions) (EU Exit) Regulations 2020 preserved passporting rights between Gibraltar and the UK as a matter of Gibraltar law. This provision is not time-limited and will continue in place until the Gibraltar Authorisation regime is in place.
• Passporting in and out of Gibraltar | FCA & GFSC
• Language & Currency: English & Gibraltar Pound Sterling
• Corporate tax: 12.5%
• VAT: No VAT (therefore no VAT on most B2B services received in Gibraltar including many technology and marketing services)
• Capital Gains Tax: 0%

Special Personal Tax Regimes

CAT 2 – Wealthy individuals with more than £2m in net assets may apply for Category 2 residence.

An individual who has been issued with a Category 2 Individual certificate shall be liable to income tax on the first £ 118,000 of assessable income only and the amount of tax due and payable in any year of assessment shall be not less than £ 37,000. 

HEPSS
A High Executive Possessing Specialist Skills Individual shall be charged to tax limited to the first £160,000 of his assessable income. The standard personal income tax is an effective top rate of income tax at 27%. 

Capital Requirements

– EMI: Initial and ongoing capital of:

●      €350,000; or

●      2.2%* of the average outstanding electronic money (as projected at application), whichever the highest.

GFSC Application & Authorisation Fees

• Application fee: £27,500
• Annual Fee: Base + Variable + Ancillary
• Base Fee A = £21,433.
• Variable Fees are based on AEO over the previous 6 months:

●      – £0 ≤ AEO ≤ £1,000,000 – no additional charge

●      £1,000,001 ≤ AEO ≤ £2,000,000 – £10,716

●      £2,000,001 ≤ AEO ≤ £5,000,000 – £19,289

●      £5,000,001 ≤ AEO ≤ £10,000,000 – £26,791

●      £10,000,001 ≤ AEO ≤ £20,000,000 – £32,149

●      AEO ≥ £20,000,001 –  £37,508.

Ancillary Fees:

●      £108 per jurisdiction for passporting on a services basis, subject to a maximum of £540.

●      £1,072 per jurisdiction for passporting on an establishment basis, subject to a maximum of £5,360.

●      £214 per agent.

●      £108 per distributor.

Estimated time for authorisation

9-12 months from inception of the project assuming we work collaboratively together and the client is prompt in completion of necessary documents and forms.

What is included?

●      Incorporation of Gibraltar trading entity, registered office and company secretary

●      Registration with the Department of Employment (ETB)

●      Corporate Tax registration

●      Initial meeting with the GFSC

●      Formal authorisation application and liaison with the GFSC

●      Individual and body corporate questionnaires

●      Due diligence and onboarding of initial directors and shareholders

●      Review of and support in preparation of Business Plan, Financial Projections and AML/CFT Policies and Procedures

●      Review of Outsourcing Strategy and Arrangements

●      Review of Capital Adequacy & Safeguarding Arrangements

●      Preparation of Mapping Assessment (how the application meets the relevant legislative threshold requirements – i.e. statutory/regulatory criteria for licensing under relevant Act/s)

●      Bank/payment account opening support (5 hours included)

●      5 hours corporate and tax structuring advice 

Additional services on request

●      Annual accounts and tax filing

●      Cat 2 and HEPSS registrations

●      Employment Contracts and Handbook

●      Cross-border tax advice (UK-Gibraltar)

●      Corporate structuring advice (multi-national)

●      Fixed fee outsourced in-house legal support (including terms and conditions, regulatory queries, contracts with business partners, arrangements with MasterCard and Visa)

●      Corporate or Individual Directorship 

Note: many forms of income are not taxable in Gibraltar (including such as dividends from companies outside of Gibraltar and interest and royalties from listed companies).

* Disbursements (including to Companies House and the GFSC are excluded. 

Gibraltar is the perfect fit for financial services firms that want better relationships with key stakeholders and more business-friendly integrated relationships with their regulators. 

About Ramparts: 

Ramparts consists of a law firm and a fiduciary business based in the World Trade Center, Gibraltar. Our fiduciary business specialises in private foundations, company administration and fund administration for crypto entrepreneurs.

We are proud members of the UK Payments Association.