Gibraltar company formation

Gibraltar’s DLT regulatory regime, introduced on 1 January 2018, is focused on the application of principles rather than rigid rules that couldquickly become outdated for businesses based on rapidly evolving technology. It aims to create a centre of excellence for these technologies and an environment in which operating models and organisational structures can be explored, with new entrants able to participate freely.

In order to take advantage of Gibraltar’s entrepreneurial regulatory approach to DLT regulation, firms will have to demonstrate that they have ‘sufficient substance’ in Gibraltar. In practice, this will require premises in Gibraltar, local directors with expertise, anti-money laundering reporting requirements, satisfying capital adequacy requirements and the ability to meet local accounting and other reporting requirements.

In short, you cannot benefit from this ground breaking regulatory regime without contributing to Gibraltar’s reputation and economy. It is worth noting that if you already operate in Gibraltar under another licence, you may not require DLT licensing. The requirement for substance, however, is unaltered. 

Initial Coin Offerings (ICOs) are a means of raising finance, especially by early-stage tech start-ups, typically for DLT related projects. Gibraltar isreleasing a complementary regulatory framework covering the promotion and sale of tokens or coins, operating secondary market platforms trading in tokens, as well as providing investment and ancillary services relating to tokens. Gibraltar’s token regulations are aligned with the DLT framework.

Cryptocurrencies or digital currencies can be traded for other assets, such as conventional fiat money, or different digital currencies via acryptocurrency exchange or digital currency exchange (DCE). For any clients with requirements to trade crypto via a corporate entity, Sovereign offers the following services:

• Establish the legal entity
• Assist banking introductions
• Custodian Services through trusted partners
• OTC, discretionary and execution only investment services through trusted partners

Gibraltar’s Experienced Investor Fund (EIF) has become a popular vehicle to establish crypto funds. The EIF is an authorised collective investment scheme that is exclusively for investment by experienced investors and is designed to invest in a wide range of traditional or alternative asset classes. No regulatory approval is required before a fund can begin to raise capital and commence with its investment activities. A fund may be launched based on a legal opinion that confirms that the fund has met all legal and structural requirements for its operations, and provided that the fund’s documentation is submitted to the regulator for registration within 10 business days of its launch.

Sovereign will engage a local law firm of your choice to ensure that your fund is properly established.

Gibraltar is a popular jurisdiction for investment funds and their managers, offering robust fund legislation, favourable tax advantages, within an EU framework, efficient regulation, the flexibility of a small jurisdiction and quality infrastructure. Gibraltar’s main attraction to investors is as an EU domicile, which provides entry to the single market in financial services, thereby enabling passporting throughout the member states of the EU.

An Experienced Investor Fund (EIF) is an authorised collective investment scheme that is exclusively for investment by experienced investors and is designed to invest in a wide range of traditional or alternative asset classes.

No regulatory approval is required before a fund can begin to raise capital and commence with its investment activities. A fund may be launched based on a legal opinion that confirms that the fund has met all legal and structural requirements for its operations, and provided that the fund’s documentation is submitted to the regulator for registration within 10 business days of its launch.

A Gibraltar fund may also be licensed in accordance with the EU laws on UCITS (Undertakings for Collective Investment in Transferable Securities) where the intention of the fund is:

• To operate with the sole object of collective investment in transferable securities or in any other liquid financial assets
• Raise capital from the public and invest on the principles of risk-spreading;
• Issue units that are, at the request of holders, redeemed, directly or indirectly, out of those assets.

Non-UCITS Retail Funds can be structured as hedge funds.

The EU’s Alternative Investment Fund Managers Directive (AIFMD) was transposed into Gibraltar law on 22 July 2013 and investment management firms that fall within the Directive can avail themselves of the European passport and market across EU member states.

The online gambling industry has grown tremendously alongside the worldwide web. The first casino is thought to have gone online in 1994 and By 1998 when the first online poker sites were launched, the global online gambling and betting market was estimated to be worth USD830 million per year. Fast forward Two decades later this market accounted for USD45.8 billion and is expected to double to over USD90 billion by 2024, which would represent a compound annual growth rate of 10.9% (Source: Zion Market Research).

Technological developments such as in-play betting, hand-held devices and Smartphone penetration have contributed hugely to growth in the industry over the past decade and this trend will continue as improved connectivity and accessibility enable more players to take part online from anywhere in the world. New growth areas currently being developed are the use of crypto currencies and virtual reality games.

This growth has also been facilitated by developments in licensing and regulation. It is essential for online gambling (eGaming) operators to be licensed and regulated in a reputable jurisdiction if they are to demonstrate legitimacy around the world.

The intellectual property (IP) associated with a business name or system can be one of its most valuable assets – but only if it is properly protected. Any business that wishes to establish a national or international identity should take steps to protect the use of its name, logo or other IP, such as patent rights, formulae/processes, designs, trademarks, franchises, licence agreements, ‘know-how’ and copyrights.

It is not possible to make an original application to register a patent or trademark in Gibraltar. Applications must be made to the UK Intellectual Property Office (UKIPO) and then extended to include Gibraltar within three years of the date of issue of the UK patent or trademark. The register for patents or trademarks is based at Companies House, Gibraltar. The holder can take action through the UK or Gibraltar courts to enforce a patent or trademark.

Income from IP rights may be derived by way of royalties. As with other sources of income, the tax planning of IP should focus on maximising the after-tax profits. To ensure that arrangements made to receive royalties are effective, it is necessary to analyse how various countries treat the payments of royalties, whether tax is withheld on such payments and how the income receipts and expenditures are treated.

Sovereign can provide cost effective advice to clients on the acquisition, exploitation, use and enforcement of IP rights on both a domestic and cross-border basis.