Many UK-based entrepreneurs, investors, business owners, and skilled individuals – people who drive economic growth, innovation and employment – are actively exploring opportunities outside the UK.

Factors such as the abolition of the non-dom tax regime, rising capital gains and income taxes, new caps on business property inheritance reliefs and the closure of the Tier 1 Investor Visa scheme have all contributed to a climate of uncertainty that is undermining the UK’s ability to attract and retain internationally mobile people and businesses.

When combined with levels of social, political and economic volatility not seen in the UK for five decades, it is perhaps not surprising that alternative jurisdictions across Europe, the Middle East and Africa, Asia and in the Caribbean and Central and South America are being seen as increasingly attractive options.

A well-planned UK exit strategy will explore and consider the following important considerations:

1. Review current position, wishes and intentions: your long-term goals will dictate the structure of your move. It is essential to clearly define your family situation, business ties, and whether your intention is to return to the UK in the long term. These factors will dictate your classification under the UK Statutory Residence Test (SRT).
2. Alternate options for Residency and Tax Residency: you will need to secure a visa and review the domestic tax laws of your destination well in advance. Understanding how your proposed new home will tax your worldwide income and assets is essential to prevent unexpected liabilities.
3. Exit planning and timing: UK tax exposure is governed by strict rules, meaning the month of your departure and the timing of capital disposals or pension access can significantly impact tax exposures. You will need to check your position against HMRC Residence Rules and access to suitable Double Taxation Agreements to avoid paying taxes twice.
4. Asset Structuring, Wealth and Succession Planning: shifting countries will also shift your exposure to estate taxes and inheritance rules. It is critical to review your will, any trust arrangements, as well as your residence status under the new SRT.
5. Tax efficient asset management: how you manage your investments in tax neutral jurisdictions, property and bank accounts must all be reviewed before leaving. Liquidating certain assets or retaining UK properties (such as under the Non-Resident Landlord Scheme) requires a tailored strategy.

Navigating international relocation requires aligning your physical move with complex legal and financial frameworks to ensure tax efficiency, protect your wealth and preserve flexibility.

The most critical relocation mistake is seeking entry and exit advice after arriving in a new country. Optimal planning opportunities are often exclusively available before departure. To ensure a smooth transition and access to vital strategies, you should begin your relocation planning at least six to twelve months in advance. If you are selling a UK business, you should be planning even further in advance.

Countries offering attractive options to new residents

Many governments have taken notice of the increased demand from successful and self-sufficient businesspeople for better options and opportunities for themselves, their families and businesses. Offering attractive residency programmes and tax incentives to new residents enables them to:

• Secure foreign investment without debt.
• Attract people with proven track records and valuable networks.
• Create local employment, increased revenue and associated economic benefits.
• Enrich their economies and citizens.

The following European, Middle East and African, Asian, Caribbean, Central and South America countries offer a range of attractive residency and tax residency options to new residents.

Europe

1. Gibraltar – Gibraltar provides a highly tax-efficient, British-regulated quality Mediterranean lifestyle. Residents enjoy a warm climate with no value-added (VAT), inheritance or capital gains taxes.

Key Residency and Tax Benefits

• Residency rights for those who establish a local business.
• Self Sufficient Residency rights and a Special Tax Status. High-net-worth individuals can apply for Category 2 residency.
• Capped Income Tax: under Category 2 status, income tax is generally capped at £44,740 per annum.
• Category 2 residents are generally not taxed on passive income, dividends, capital gains or rental income arising outside of Gibraltar.
• No capital gains, inheritance or wealth taxes.
• No standard VAT.
• Double taxation agreements with the UK.

2. Portugal – Portugal offers an exceptional quality of life, defined by an affordable cost of living, with 300+ days of sunshine, and a relaxed, outdoor-oriented culture.

Key Residency and Tax Benefits

• Residency permit options via investment, business or self-sufficiency.
• The IFICI tax regime provides qualifying high-skilled professionals a flat 20% tax rate and foreign income exemptions for up to 10 years.
• Double taxation agreements with the UK.

3. Cyprus – Cyprus offers a highly desirable work-life balance, blending sunshine, a safe environment and tax efficiency.

Key Residency and Tax Benefits

• Residency permit options via investment, business or self-sufficiency.
• A low corporate tax rate of 15% for Cyprus tax resident companies.
• No income tax on dividend and interest related income.
• Significant tax incentives on income earned abroad and locally.
• Overseas pensions income that exceeds €5,000 is taxed at only 5%.
• No capital gains tax (except on immovable property situated in Cyprus), wealth tax, inheritance or gift taxes.
• Double taxation agreements with the UK.

4. Malta – Malta offers a laid-back, Mediterranean lifestyle, a rich history and a strong sense of community.

Key Residency and Tax Benefits

• Residency permit options via investment, business or self-sufficiency.
• While the standard corporate tax rate is 35%, Malta’s imputation system allows the effective tax rate to drop to just 5% for qualifying foreign holding and trading companies.
• Non-domiciled residents only pay taxes on foreign income remitted to Malta. Foreign capital gains are exempt, even if remitted to the country.
• Malta levies no inheritance tax, gift or wealth tax. There is also no tax on foreign savings remitted to the country.
• Double taxation agreements with the UK.

5. Greece – Greece provides a lower cost of living, a healthy Mediterranean lifestyle, a pleasant climate and rich culture.

Key Residency and Tax Benefits

• Residency permit options via investment, business or self-sufficiency.
• A fixed yearly tax of €100,000 on all income earned outside Italy, lasting for up to 15 years.
• Retirees receiving retirement income from abroad may qualify to pay a flat 7% tax rate on all foreign-sourced pension income for up to 15 years.
• Double taxation agreements with the UK.

6. Italy ¬– Italy has thriving business communities within its major cities, while smaller towns and cities offer a lower cost of living and a high quality of life. Those who value culture and a slower pace of life often find it an appealing place to live and work.

Key Residency and Tax Benefits

• Residency permit options via investment, business, or self-sufficiency.
• A fixed yearly tax of €300,000 on all income earned outside Italy, lasting up to 15 years.
• Retirees may qualify to pay a low 7% flat tax on all foreign income for up to 10 years.
• Double taxation agreements with the UK.

The Middle East and Africa

7. United Arab Emirates (UAE) – The UAE offers an exceptional expatriate lifestyle, ultra-low crime rates ensuring world-class safety, and a strategic hub connecting Europe, Asia, and Africa. Residents enjoy year-round sunshine, premium international schooling options, and modern, globally integrated communities.

Key Residency and Tax Benefits

• Residency permit options via investment, business or self-sufficiency.
• No personal Income Tax.
• No Capital Gains Tax.
• No Wealth Tax or Inheritance Tax.
• Double taxation agreements with the UK.

8. Mauritius – Mauritius combines a premium, safe tropical lifestyle with a highly favourable tax framework for expatriates and businesses.

Key Residency and Tax Benefits

• Residency permit options via investment, business or self-sufficiency
• No Capital Gains Tax.
• No wealth, inheritance, gift or exit taxes.
• Corporate Tax is capped at 15%.
• Income derived outside Mauritius is only taxable if it is remitted to Mauritius.
• Double taxation agreements with the UK.

The Caribbean, Central and South America

9. The Caribbean – The Caribbean offers an ideal quality of life, featuring a relaxed pace and year-round tropical weather. Multiple residency and citizenship by investment options provide favourable tax advantages, wealth protection and enhanced global mobility.

Key Residency and Tax Benefits

• Investors can acquire regional residency and/or citizenship through investment and self-sufficiency.
• Caribbean nations operate as tax-efficient hubs, often allowing investors to benefit from the absence of inheritance, estate and wealth taxes.
• Many apply no income tax or capital gains on foreign-earned assets or income.
• Members of the Caribbean Community (CARICOM) enjoy enhanced freedom of movement, providing the right to live, work and retire in participating states without the need for traditional visas or work permits.

10. Panama – Panama offers a blend of metropolitan luxury and tropical relaxation, characterised by a low cost of living, top-tier healthcare and favourable tax laws.

Key Residency and Tax Benefits

• Residency is available through investment, business establishment or self-sufficiency.
• Territorial Basis of Taxation.
• No income tax on income earned outside Panama.
• No wealth, inheritance, gift or exit taxes.

11. Paraguay – Paraguay offers a highly affordable, laid-back lifestyle with a low cost of living. It operates a territorial tax system, which means foreign-sourced income is taxed at 0%. Additionally, local personal and corporate income taxes are generally capped at a flat 10%.

Key Residency and Tax Benefits

• Residency is available through investment, business establishment or self-sufficiency.
• Territorial Basis of Taxation.
• No income tax on income earned outside Paraguay.
• Local personal and corporate income taxes are generally capped at a flat 10%.
• No wealth, inheritance, gift or exit taxes.

12. Uruguay – Uruguay offers a relaxed, European-style quality of life, highly prized for its stability, safety and emphasis on a healthy work-life balance.

Key Residency and Tax Benefits

• Residency permits are available through investment or self-sufficiency.
• New residents can opt for an exemption on foreign-sourced capital income and capital gains for up to 11 years.
• No inheritance, estate or gift tax is applicable to foreign based assets.
• Double taxation agreements with the UK.

 Asia

13. Singapore – as Asia’s premier financial hub, Singapore offers a high quality of life with integrated green spaces, top-tier healthcare and world-class safety. Residency is available through investment or business establishment.

Key Residency and Tax Benefits

• Residency is available through investment or business establishment.
• Corporations benefit from a flat 17% headline tax rate.
• Substantial start-up exemptions are available.
• No capital gains or dividend tax.
• Individuals benefit from progressive tax rates capped at 24%.
• Foreign-sourced income is largely exempt.
• No inheritance, estate or gift taxes.
• Double taxation agreements with the UK.

14. Hong Kong – Hong Kong residents enjoy unparalleled safety, exceptional public transit, and a vibrant lifestyle that seamlessly balances a bustling urban metropolis with abundant, easily accessible nature and beaches.

Key Residency and Tax Benefits

• Residency is available through investment or for highly skilled individuals.
• Territorial Basis of Taxation.
• Low Corporate Taxation of 8.25% and 16.5%.
• Personal employment income is capped at a standard rate of 15% or 16%.
• Foreign-sourced income or profits are typically exempt, even if remitted back to HK.
• No Capital Gains and Wealth Taxes.
• Double taxation agreements with the UK.

15. Thailand – Thailand offers a low cost of living, world-class healthcare, year-round tropical weather, safety and a rich, vibrant culture.

Key Residency and Tax Benefits

• Residency is available through investment, business establishment or self-sufficiency.
• Foreign-sourced income is generally not taxed unless it is remitted to Thailand.
• Inheritance tax laws are not applicable to foreign based assets.
• Double taxation agreements with the UK.

The countries listed above have been selected as the leading countries offering residency rights and tax benefits to new residents in each region. The Sovereign Group advises and assists clients with immigration matters across more than 30 countries. If you are considering any other countries, please contact us via the contact details below.

International Mobility, Private Client and Corporate Services

Sovereign works closely with applicants through every stage of the planning and implementation process. When combined and managed correctly, the following Sovereign Group services enable individuals and families to develop and implement a comprehensive, flexible and tax efficient International Mobility, Private Client and Corporate Service strategy:

• International residency, tax residency and citizenship planning.
• International corporate establishment and management.
• Personal and corporate banking.
• Tax Planning.
• Trusts and foundations.
• Estate and succession planning.
• International retirement plans.
• Wealth management.
• International life and medical insurances.
• Yacht and Aircraft registration and management services.

Strategies are developed and implemented in accordance with each client’s specific needs. Comprehensive quotations will be provided during the planning process.

Contact Sovereign for further information

The Sovereign Group’s global network of offices, experienced client advisers and professional services partners mean that we are well-placed to assist, advise and support individuals, families, businesses and their advisers to unlock the potential of benefits of alternative residence or citizenship strategies, as well as to plan, implement and manage their assets.

For further information or to discuss your or your clients’ requirements, please contact Head of Residency & Citizenship Services Ceri Pratley below.

The post Leaving Britain? Post-UK International Mobility, Residency and Tax Residency Planning appeared first on The Sovereign Group.

Bahrain has widened its official definition of micro, small and medium enterprises (MSMEs) for the first time since 2017. The measure was introduced by Ministerial Decision No. 23 of 2026, issued by the Minister of Industry and Commerce Abdulla bin Adel Fakhro and published in the Official Gazette on 11 June. It came into force the following day.

The effect is not cosmetic. The ceiling for a medium enterprise is now expanded to 250 employees or BHD20 million (USD53 million) in annual revenue, which means many companies that were previously classified as large enterprises now fall inside the SME definition and can gain access to the support programmes, financing and procurement preferences that attach to that status.

What has changed?

By repealing Ministerial Decision No. 229 of 2017, the classifications of micro, small and medium enterprises are redefined as follows:

The new Decision also changes how the two tests interact. It sets out the employee count and annual revenue as separate criteria, and provides that either one of them, or both, may be used in determining a classification, in accordance with a guide to be issued by the Ministry’s SME directorate.

The 2017 rules contained an express tie-break, applying whichever measure better reflected the enterprise’s real position. That has been removed, so how the discretion is exercised in practice will depend on the guide.

Why does the SME Classification matter?

Extending the scope of a medium enterprise up to 250 employees or BHD20 million in annual revenue will greatly increase the number of businesses able to access the benefits of obtaining an SME Classification Certificate in Bahrain, which include:

• Access to several of Tamkeen’s enterprise programmes and to the Bahrain Development Bank’s (BDB) preferential profit rate on finance.
• Access to the BDB’s USD185 million SME Fund, which offers Sharia-compliant financing with repayment terms of up to five years to businesses that have been operational for at least two years.
• 10% advantage in bidding for government tenders.
• 10% advantage in bidding at auctions of public utilities held within the establishments of gov-ernment departments.
• 20% allocation of the value of government procurements and tenders to SMEs.
• Services and programmes of ‘Export Bahrain’, including funding support, credit and training.
• Future initiatives of the SMEs Development Board.

None of this is automatic. The SME Classification Certificate must be applied for online through the Ministry’s SME registration system using an advanced-level eKey account, supported by audited finan-cial statements or, for smaller enterprises, recent bank statements.

Growth cuts both ways. A company that crosses the upper limit of its band moves out of the programmes attached to it, and re-certification is evidence-based rather than self-declared. A business approaching BHD20 million in annual revenue or 250 employees should plan for this in advance rather than discover it at renewal.

What is not yet settled?

The decision requires the SME Directorate of the Ministry of Industry and Commerce to issue a guide covering SME contribution to the national economy, the SME database, and the electronic registration system through which classification certificates are issued.

At the time of writing this guide has not been published, and the Ministry’s website still carries the classification criteria document dated November 2022. Until the guide appears, how the two criteria will be applied to a business that sits in different bands on each measure remains open.

How has it been received?

The Bahrain Chamber welcomed the measure when the Cabinet approved the draft resolution in early June, stating that the updated classification criteria would enhance the effectiveness of national policies and financial programmes by enabling targeted support for enterprises at different stages of growth.

The expanded criteria now cover most of Bahrain’s business base. Even under the previous classifications, MSMEs represented 93.4% of active commercial registrations in the Kingdom, totalling nearly 85,700 businesses and employing more than 47,000 Bahrainis.

“These figures underscore the sector’s monumental role in driving economic growth, innovation and entrepreneurship, and highlight the critical importance of maintaining a supportive regulatory and legislative environment,” said the Chamber in a statement.

The Chamber also expected alignment with international standards to widen access to financing, strengthen integration into global value chains and lift productivity.

What should businesses do now?

Companies that already hold a classification certificate should check whether the new thresholds are likely to move them into a different band at their next renewal. Companies previously treated as large, particularly those turning over between BHD3 million and BHD20 million or employing between 100 and 250 people, should consider applying to gain access to SME benefits.

Businesses looking to set up in Bahrain should also factor their likely classification into how the entity is structured and staffed from the outset. SME classification is one of several points that shape how a business should be set up in Bahrain, and it is the kind of question we handle for clients every week.

Sovereign Business Hub Bahrain

Bahrain is one of the most open economies in the Middle East and North Africa (MENA) region and is well-positioned to provide investors and start-ups with investment opportunities and access to regional and international markets.

The Bahrain government is focused on encouraging foreign direct investment (FDI) in the manufacturing, logistics, information and communications technology (ICT), financial services, tourism, health and education sectors.

The Sovereign Business Hub is a business incubator and accelerator that is designed to increase the successful business set-up, development of new businesses, job creation and employment in specific sectors that are aligned with the Kingdom of Bahrain’s areas of opportunity.

Our Business Hub provides entrepreneurs, start-ups and small businesses with all the necessary support and facilities needed to achieve early growth in the GCC region, combining:

• Commercial registration and company formation in Bahrain.
• Practical support throughout the set-up process, covering office space, residency permits, operational requirements and ongoing administration and regulatory compliance.
• Serviced office and incubation space for early-stage businesses.
• Access to Sovereign’s international network and to other entrepreneurs and start-ups working across the region.

For more information, contact Nabil Khoury, Managing Partner of Sovereign Trust Consultancy (Bahrain), by phone on +973 1777 2011 or by email below.

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Gibraltar introduced the world’s first dedicated regulatory framework for prediction markets with the publication of the Prediction Market Regulations 2026, as Legal Notice No. 176 of 2026, in the Gibraltar Gazette on 13 July.

Now in force under the Gambling Act 2025, these landmark regulations establish a legal framework governing prediction market operators and contracts, distinguishing the sector from traditional gambling activities.

A prediction market is defined as a system, platform or arrangement that facilitates the creation, trading or settlement of prediction market contracts – financial instruments whose value is determined by the occurrence or non-occurrence of a specified event or outcome.

“Gibraltar has always been prepared to act where others hesitate,” said Nigel Feetham, Gibraltar’s Minister for Justice, Trade and Industry. “We took a deliberate decision to create a licensing framework for prediction markets because we recognise the enormous opportunity they represent, economically, technologically and for the global financial ecosystem.

“This is more than a new regulatory framework; it is a statement of intent. My ambition is to position Gibraltar as a leading jurisdiction for responsible digital innovation and for the development of new markets underpinned by high regulatory standards.”

Regulation 4 provides that activity carried on under the Regulations is not to be treated as betting, gaming or a lottery, while Part 2 confirms that a prediction market authorisation is neither a Part 4 gambling licence nor an authorisation to carry on a regulated financial activity.

This provides legal certainty for operators while establishing prediction market activity as a distinct statutory category with its own authorisation, operational requirements and supervisory framework.

All event contracts are required to be approved and certified by the Gambling Authority and must be “clear, capable of objective settlement, not readily susceptible to manipulation and consistent with the regulatory objectives”.

The Authority has the discretion to restrict or prohibit certain prediction market contracts if it considers them inappropriate or contrary to the public interest. These include any contracts relating to criminal conduct, death, serious injury or terrorism, or the occurrence of war or armed conflict.

Licensed prediction market operators will be required to implement comprehensive market integrity measures, including systems designed to prevent, detect and address market manipulation, insider trading, wash trading and collusive trading. Operators must also establish policies to identify, manage and disclose conflicts of interest while ensuring fair and orderly trading.

In addition, the framework requires operators to provide participants with accurate and transparent information and maintain robust anti-money laundering (AML) and counter-terrorist financing (CTF) controls.

The Regulations expressly permit cryptocurrencies, including stablecoins, to be integrated into the sector’s accepted methods of payment, and users will not be prevented from using digital assets to fund accounts, settle transactions or make withdrawals. They also confirm that their use does not alter the legal character of the contract or the operator.

The dedicated rules come after Gibraltar gave approval to ADI Predictstreet to offer its event contracts under a ‘betting intermediary’ licence in early March 2026 and the grant of a second prediction market licence to WagerWire in June 2026.

“Predict Street became FIFA’s first Official Prediction Market Partner for the FIFA World Cup and secured partnership agreements throughout the tournament. Today, it has become one of the most visible new brands associated with the competition,” said Feetham.

“I licensed Predict Street because we believed it was the right thing to do, supporting innovation while ensuring it operated within a robust, well-regulated framework. Predict Street’s success is a reminder that today’s start-ups can become tomorrow’s global brands, and Gibraltar is committed to supporting innovative businesses with the ambition to achieve that success.”

Feetham said the regulatory framework was developed through months of collaboration with industry participants. He expected to issue its first prediction market licence under the new regime shortly. An Approval in Principle has been granted to one operator and another approval is anticipated in the coming weeks.

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As multinational groups continue to expand across Africa, managing liquidity, foreign exchange exposure, intra-group financing, banking relationships, and working capital across multiple jurisdictions has become increasingly complex. Establishing a regional treasury centre is no longer a luxury but a strategic necessity. Mauritius has emerged as one of the leading jurisdictions for the centralisation of treasury operations through its Special License category for Global Treasury Activities (GTA) Licence, issued by the Financial Services Commission (FSC) Mauritius.

What is the Global Treasury Activities Licence?

The GTA Licence allows multinational groups to establish or relocate their treasury management functions to Mauritius and provide treasury services to related group companies. Licensees are expected to provide at least three treasury services to three or more related entities within their group. Eligible activities include:

• Group funding and credit facility arrangements
• Liquidity and cash pool management
• Corporate finance advisory services
• Credit administration and control
• Factoring, forfeiting and re-invoicing activities
• Derivative arrangements and risk management
• Guarantees, standby letters of credit and remittance services
• Management of funds for designated investments

Why Mauritius?

1. Strategic Gateway to Africa

Mauritius is widely recognised as a leading international financial centre serving Africa. Its political stability, bilingual workforce, sophisticated banking sector, and regulatory framework make it an attractive location for regional headquarters and treasury operations. Many international groups use Mauritius as a platform to coordinate investments and business activities across multiple African jurisdictions.

2. Enhanced Group Cash Management

A centralised treasury function allows multinational groups to:

• Improve visibility over group cash positions
• Optimise liquidity across subsidiaries
• Reduce borrowing costs
• Enhance foreign exchange management
• Strengthen treasury controls and governance
• Streamline banking relationships

Centralisation can result in significant operational efficiencies and improved decision-making at group level.

3. Attractive Tax Incentives

A company holding a GTA Licence may benefit from a five-year tax holiday on its qualifying income, subject to meeting the prescribed substance requirements. These include maintaining a physical office in Mauritius, employing qualified professionals locally, and meeting minimum expenditure thresholds.

4. Strong Banking Ecosystem

Mauritius hosts a range of international and regional banks offering multi-currency banking, trade finance, treasury products and cross-border payment solutions. The absence of exchange controls further supports efficient treasury operations.

5. Robust Regulatory Environment

The GTA Licence is issued under the Financial Services Act and supervised by the FSC Mauritius, providing multinational groups with the comfort of operating from a well-regulated and internationally recognised jurisdiction.

Practical Examples

Mining Group Operating Across Southern Africa

A mining group with subsidiaries in Zambia, Mozambique, Tanzania and South Africa can centralise treasury functions in Mauritius, manage group funding, negotiate banking facilities, monitor foreign exchange risk and optimise surplus cash positions.

Pan-African Consumer Goods Business

A group operating across West and East Africa can establish a treasury centre in Mauritius to oversee cash pooling, supplier financing, foreign currency management and working capital optimisation.

Private Equity Portfolio Platform

An investment group with multiple African portfolio companies can use a Mauritius treasury vehicle to manage capital deployment, refinancing arrangements and intercompany funding requirements.

Recent Success Story

We are pleased to confirm that we have recently and successfully obtained another Global Treasury Activities Licence for one of our multinational clients, demonstrating our practical experience and ability to guide clients efficiently through the licensing process from structuring and application preparation to regulatory approval and post-licensing implementation.

As African businesses continue to grow and regionalise their operations, the Mauritius Global Treasury Activities Licence offers a compelling solution to centralise treasury functions, improve efficiency, strengthen governance and create long-term value for multinational groups operating across the continent.

How We Can Help

Our team provides comprehensive assistance with:

• Structuring and feasibility assessments
• Preparation of business plans
• Licence application and FSC liaison
• Governance and substance planning
• Regulatory compliance frameworks
• Ongoing company secretarial, accounting and compliance support
• Banking introductions and operational setup

Contact us to discuss whether a Mauritius Global Treasury Activities Licence could support your group’s African expansion and treasury strategy.

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The Maltese government introduced the Malta Business Wallet on 14 May, a new platform designed to improve the ease of doing business in Malta by enabling business owners to users to manage and selectively share their personal and corporate data with competent authorities and subject persons through a secure digital repository.

Available as an application on the Apple Store and Play Store, the Malta Business Wallet will introduce the ‘once only’ principle in relation to due diligence. It is intended to lead to a more standardised system, reduce unnecessary delays and increase efficiency.

The legal and operational framework under which the system operates was established by the Companies Act (Central Data Repository) Regulations 2026, issued as Legal Notice 151 of 2026 on 15 May, which provide for:

• The creation of a secure digital central data repository managed by the Registrar of Companies that allows company officers and legal representatives to manage personal and corporate data in a single location.
• Assistance to subject persons and competent authorities in discharging their duties under anti-money laundering and counter-funding of terrorism laws.
• The use of advanced technological standards, such as Application Programme Interfaces (APIs) and biometric data, to verify the identity of users and ensure the authenticity of uploaded documents.
• The implementation of the principle of “selective disclosure”, ensuring that users retain total control over which specific relying parties can access their information and that the repository remains a tool for convenience rather than a mandatory burden for involved parties.
• Assurance that verified electronic data within the repository is deemed a valid copy for all legal purposes and cannot be denied legal effect due to its digital form.
• The elimination of bottlenecks and decreased operational costs by providing a seamless data-sharing mechanism that remains strictly voluntary for all parties.
• Positioning the Malta Business Registry as a supervisory authority that ensures all data processing aligns with the Data Protection Act (Chapter 586 of the Laws of Malta) and the EU’s General Data Protection Regulation (GDPR) (EU Regulation 2016/679).

The Regulations define the Registrar’s duties as being to establish, manage, operate and maintain the repository and establish a five-year data retention period, which is extendable to a maximum period of 10 years if the data is required for investigating serious crimes, such as money laundering or terrorism financing.

Authorised users of the repository, include company officers, partners, and representatives of bodies corporate. Relying parties who may be authorised to access and use the repository include competent authorities and subject persons conducting due diligence. Relying parties making use of the repository are required to inform the Registrar of any unauthorised or unjustified access to the repository promptly.

The Registrar is empowered to terminate or suspend access to the repository and to any data and information it contains to any relying party that fails to implement the necessary security safeguards and to only reinstate it once the necessary measures have been implemented to prevent the same from occurring again.

The specific data and information that users can upload, submit, store, retrieve, rectify, erase and submit on the repository, include identity documents, evidence of registered addresses, and documentation of subject person engagement.

The Regulations clarify that using the repository does not exempt users or subject persons from their existing legal obligations to provide or collect information for customer due diligence purposes in accordance with applicable laws and regulations.

Competent authorities are required to designate specific officers or employees to access the repository, and to implement safeguards for data used in investigating financial crimes.

The Registrar is required to verify all data and user identities using secure electronic systems, ensuring third-party providers meet strict data protection standards. Biometric data is permitted only when strictly necessary to prevent identity fraud, and the Registrar may access information from other public authorities to ensure the repository remains accurate and functional.

Importantly, users have the right to choose which relying parties see their data, information and reports stored in the repository and the right to vary or revoke such access to any one or more relying parties following the procedures established by the Registrar.

The Registrar is authorised to charge fees for access to and use of the repository, including fees relating to registration, maintenance, access and verification services. The Regulations establish criminal penalties for providing false or misleading information through the repository, or for making fraudulent use of the repository, including a fine of up to €50,000 and, or up to three years imprisonment.

“The Malta Business Wallet will represent an important transformation for our country’s business ecosystem,” said Dr Geraldine Spiteri Luca, Chief Executive Officer and Registrar of the Malta Business Registry. “As the Malta Business Registry, we remain committed to delivering efficient and effective services.”

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The Malta Financial Services Authority (MFSA) launched a public consultation on 18 May on the potential tokenisation of financial instruments and real-world assets, which would represent a significant step forward in integrating distributed ledger technology (DLT) within Malta’s financial services framework.

Tokenisation refers to the digital representation of ownership rights in financial instruments or real-world assets, which can enable activities such as trading, settlements and record-keeping of investments to take place through digital platforms.

It can also improve transparency and auditability through the maintenance of a shared, time-stamped transaction records that are accessible to authorised participants within a controlled network environment, subject to appropriate governance and data protection.

The Malta initiative reflects growing international momentum, including the EU’s 2023 DLT Pilot Regime, which effectively introduced a regulatory sandbox for the trading and settlement of financial instruments within the Markets in Financial Instruments Directive (MiFID) II framework using DLT, as well as broader global adoption trends across capital markets.

To inform future policy direction, the MFSA is seeking feedback from industry stakeholders and the public to better understand market readiness, identify priority asset classes and evaluate the infrastructure, legal, and regulatory considerations required to support tokenised markets in Malta.

The MFSA said it recognised that tokenisation could offer potential benefits such as enhanced efficiency, transparency, automation, and improved access to investment opportunities, but emphasised that such developments would need to be carefully aligned with existing regulatory objectives, including investor protection, market integrity and financial stability.

The consultation aims to assess whether tokenised financial instruments can be accommodated within existing EU legislative frameworks, or whether additional interpretative guidance, national measures or future EU regulatory developments might be required. The key areas of focus include:

• Market appetite and strategic positioning, including the identification of asset classes most suitable for tokenisation in Malta.
• Legal and regulatory considerations, such as ownership rights, settlement finality and the enforceability of smart contracts.
• Market infrastructure requirements, including token registries, interoperability between DLT systems and custody arrangements.
• Investor protection and risk management, covering emerging technological, operational and financial risks.
• Domestic market development, including the role of investment firms, crypto-asset service providers (CASPs) and other market participants.

The MFSA is also seeking views on whether tokenisation can be effectively implemented within existing regulatory frameworks or whether targeted updates will be necessary to facilitate scalable adoption.

In particular, it is seeking to identify operational challenges, regulatory gaps, infrastructure needs, and potential use cases that could support the responsible development of tokenised financial markets in Malta.

“Tokenisation enhances efficiency across the issuance, trading, and post-trade processing. The use of permissioned DLT can support near real-time processing and facilitating the role of transfer agents, thereby reducing operational risk,” said Ian Meli, MFSA Head of Investment Services Supervision.

“By complementing existing regulatory frameworks, including those under MiFID and Alternative Investment Fund Managers Directive (AIFMD), and taking into account the broader EU digital finance framework, including the Markets in Crypto-Assets Regulation (MiCA) where relevant, tokenisation can reinforce Malta’s positioning as a forward-looking financial centre that remains responsive to technological developments.”

The structured approach being taken by the MFSA is aimed at developing a better understanding the implications of tokenisation across different areas, while ensuring that any developments take place within a controlled framework that preserves legal certainty.

“The MFSA wants to ensure that any new framework will be robust from a customer-protection and market integrity perspective, which requires that the right infrastructure, legal and regulatory considerations are in place before it starts to operate,” said Stephen Griffiths, Managing Director of Sovereign Trust (Malta).

“It must also ensure that any regulatory framework remains proportionate and aligned with existing requirements. This includes ongoing engagement with stakeholders through consultation process, as well as continued assessment of emerging developments and practical implementation considerations.”

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Changes to the Isle of Man’s immigration rules relating to the Worker Migrant route come into effect on 1 June. They are designed to align more broadly with the UK Skilled Worker route, while retaining Island-specific requirements designed to reflect local labour market needs.

They are also intended to strengthen safeguards within the system, reduce the risk of abuse and ensure the route remains fair, robust and responsive to the Island’s economic and workforce needs.

Key changes include updated occupation codes, a greater focus on higher skilled roles and a new Sequential Labour Market Test, which will prioritise recruitment both locally and within the Common Travel Area (CTA) before being extended overseas. Other measures also strengthen rules on which roles can bring dependants, changing employers, and employer compliance.

New salary thresholds for Worker Migrant roles also took effect from 1 June. The changes update salary requirements while balancing employer access to essential skills with safeguards against low-wage migration and exploitation. Thresholds will be kept under review using UK salary data, local labour market evidence, and recruitment trends to ensure the system remains fair and responsive to the Island’s economic needs.

These changes apply to new Worker Migrant visa applications only. Any Visa or Confirmation of Employment applications that were submitted before 1 June will continue to be considered under the previous rules. Any Confirmation of Employment issued before the 1 June, which supports a visa application received after 1 June, will also be processed under the previous rules.

People already living and working in the Isle of Man under an existing and valid Worker Migrant visa will not be affected.

‘These reforms provide greater clarity and consistency for employers, while ensuring appropriate safeguards are in place to protect the integrity of the system,” said Isle of Man Treasury Minister Chris Thomas. “Together, they support a balanced and sustainable approach to inward migration that meets the needs of the Island’s economy and workforce.’

The CTA is an administrative arrangement between the UK, Ireland and the Crown Dependencies (Isle of Man, Guernsey and Jersey) which is implemented in UK domestic law in statute. It was developed to facilitate the principle of free movement for British and Irish citizens between the UK, Ireland and the Crown Dependencies, and ensure that British and Irish citizens continue to benefit from a mutual enjoyment of rights.

Schedule 4 of the Immigration Act 1971 as extended to the Isle of Man, makes specific provisions to ensure that the immigration laws of the UK, Jersey, Guernsey and the Isle of Man are integrated. In practice, this means that where a person has been granted leave to enter or remain in the Crown Dependencies and then proceeds directly to the UK, or the other way around, that leave and any conditions attached to it is treated as if it had been granted in the UK.

The Isle of Man government engaged with the Island’s business community through workshops with the Chamber of Commerce and industry-specific meetings to communicate the changes. Building on feedback, additional operational guidance and updated FAQ documents have been published to ensure further clarity for businesses and migrants.

“As more entrepreneurs, investors and businesses explore relocation opportunities in the Isle of Man, this provides more clarity and transparency within the immigration framework and reinforces the Isle of Man’s position as a forward-thinking international business centre that welcomes skilled individuals while supporting the needs of the local economy and workforce,” said Sharon Lannigan, Director of Business Development & Marketing at Sovereign Isle of Man.

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The Sovereign Art Foundation (SAF) has been enjoying a busy few months in Portugal, bringing artists, patrons and families together through art.

We kicked off the season with a special exhibition event in support of O Banquete (1), a new open-call prize for emerging Portuguese artists organised by Galeria NAVE in Lisbon. The event was a wonderful opportunity to connect with the wider creative community, while shining light on some of Portugal’s emerging artistic talent.

As part of the collaboration, one finalist will be awarded direct entry into the 2026 Sovereign Portuguese Art Prize. O Banquete (1) has appointed Howard Bilton, Chairman of both SAF and Sovereign Group, to its judging panel, strengthening ties between the two organisations.

SAF also organised a hands-on workshop for children at the exhibition, which was led by and inspired by the practice of Portuguese artist Sebastião Castelo Lopes, one of the O Banquete (1) shortlisted artists. Participants worked together to create a large-scale installation using words, drawings, symbols and personal stories, exploring how art can be a powerful tool for expression and connection. The room was filled with energy and enthusiasm as participants discovered new ways to tell their stories and connect.

We were also delighted to welcome Iranian artist Sharzadian for a workshop inspired by her mirror-based artworks and the ancient Persian poem The Conference of the Birds. In the poem, a flock of birds embarks on a journey in search of a leader, only to discover that the answers they seek lie within themselves.

Drawing on these themes of reflection and self-discovery, Sharzadian explored how mirrors can encourage us to look more closely at our identities and experiences. Participants then created their own mirrored artworks, reflecting on how we see ourselves and relate to others.

It was a pleasure to welcome internationally acclaimed New Zealand-born an artist, jeweller and taxidermist Julia deVille to Ando Living Rooftop for an intimate evening of conversation and connection. Known for her distinctive works inspired by Victorian traditions, natural history and the decorative arts, Julia shared insights into the themes of beauty, remembrance and the natural world that run throughout her practice.

The audience-led format encouraged thoughtful discussion and offered a rare opportunity to engage directly with the artist. The evening was made possible with the support of Howard’s Folly Wine, and was co-produced by Sassy Women Society and beautifully documented by photographer Zoya Magda.

To close the summer term, we will be hosting a free one-day filmmaking workshop for young people in Lisbon led by Chloe Jenden, the founder of Future Youth Media at the end of July. It is a co-production with filmmaking community initiative O QUADRO and the Sovereign Art Foundation, built specifically for kids who cannot afford access to creative programmes and might not otherwise get the chance to try visual storytelling with a camera in their hands.

This special one-day programme at the Palácio Grilo invites young people into the world of visual storytelling through hands-on filmmaking, encouraging creativity, self-expression and collaboration. We look forward to seeing participants explore new ways of sharing their ideas and experiences through film.
Looking ahead, we are excited to be bringing the 2026 Sovereign Portuguese Students Prize finalists’ exhibition to the Howard’s Folly winery in Estremoz, following a successful exhibition at Espaço JALI in Silves in the Algarve.

Celebrating the creativity, imagination and individuality of young artists from schools throughout Portugal, the exhibition brings together an inspiring collection of 30 shortlisted works and offers a glimpse into the diverse perspectives, ideas and artistic approaches of a new generation.

The exhibition in Estremoz opens on 8 August 2026 and runs through to October, before being presented once more at the Sociedade Nacional de Belas-Artes in Lisbon later in the year. The public vote is already underway. Members of the public are invited to vote for their favourite artwork in person at the exhibition or online as part of the Public Vote Prize.

All the shortlisted works are also available for purchase through the Sovereign Art Foundation’s charity auction. Proceeds from artwork sales support both the young artists themselves and the Foundation, which runs expressive arts programmes in Portugal led by certified art therapists, providing carefully structured sessions that use creative practice to support emotional wellbeing, communication and confidence.

We invite you to discover the finalists’ work, support these talented young artists and help raise funds for SAF Portugal’s charitable programmes here.

Whether through exhibitions, workshops or shared conversations, it has been a joy to see art bring people together and create meaningful experiences for our community. Together, these experiences have been a reminder of the many ways art can spark creativity, encourage self-expression, and foster meaningful connections.

We are grateful to everyone who has supported and participated in these programmes, and we look forward to welcoming more artists, families and supporters as we continue to build opportunities for engagement and communities through art.

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Businesses entering Qatar generally have a choice between establishing through the Ministry of Commerce & Industry (Mainland), the Qatar Financial Centre (QFC), the Qatar Free Zones (QFZ), operating via a branch, or incorporating another suitable legal structure, depending on their business activities and objectives. For many investors, the  Limited Liability Company (LLC) remains the default option where the intention is to build a long-term presence in the domestic market.

It is a familiar and well-established corporate vehicle that allows businesses to contract directly with customers in Qatar, employ staff and conduct licensed activities through a locally incorporated entity. While the most appropriate structure will depend on the proposed activity and ownership objectives, the LLC is often the starting point when looking beyond a representative presence or project-specific arrangement.

What is a Qatar LLC?

A Qatar LLC is a company incorporated under Qatari Commercial Companies Law No. 11 of 2015, with its own separate legal personality. In practical terms, the company exists independently from the people who own it. It can enter into contracts and take on obligations in its own name.

That separation is one of the reasons the LLC remains widely used. The business operates through a recognised legal framework and the rights and responsibilities arising from its activities belong to the company itself rather than directly to its shareholders.

For most commercial activities, the LLC is a familiar and workable structure. Certain sectors remain subject to additional regulation or licensing requirements, but the underlying concept is straightforward.

Limited liability

Shareholders in an Limited Liability Company (LLC) are generally liable only up to the amount they have invested in the company.

For many business owners, this is an important consideration. The company’s obligations do not automatically become personal obligations of its shareholders simply because they own the business and the investor’s personal assets remain outside of the liability scope. If the company encounters financial difficulties, shareholders are not ordinarily exposed beyond their agreed contribution.

That protection is not absolute. Directors and managers still need to ensure that the company is managed properly and complies with applicable legal requirements. Even so, the separation between the company and its owners remains one of the defining features of the LLC structure.

The LLC can typically have between 1 to 50 shareholders and there is no statutory minimum capital for an LLC under current MOCI guidance.

Foreign Ownership Considerations

Foreign ownership rules in Qatar have evolved significantly in recent years thanks to Foreign Investment Law No. (1) of 2019.

Historically, foreign investors establishing an LLC were generally required to partner with a Qatari national shareholder. Legislative reforms have since expanded the circumstances to permit foreign investors to qualify for full ownership of a company. Since this change, business investors have been far more interested in Qatar as a business destination.

The position is not uniform across all activities though. Eligibility for foreign ownership depends on the nature of the proposed business and, in some cases, approvals from the relevant authorities. For that reason, ownership requirements should be reviewed as part of the initial structuring exercise rather than assumed once the incorporation process has started. What applies to one activity may not necessarily apply to another.

Understanding these points early can save time and avoid the need to revisit the proposed structure further down the line.

Carrying on Business in Qatar

For businesses intending to operate within the Qatari market, the LLC often provides a practical route through which to conduct day-to-day activities.

Subject to obtaining the appropriate licences and registrations, a Qatar LLC can trade with local customers, enter into commercial arrangements and employ staff directly. This distinguishes it from structures that may be more appropriate for limited activities or a defined project.

Businesses that expect to establish an ongoing presence in Qatar often prefer the certainty of operating through a locally incorporated entity rather than relying on a temporary arrangement.

LLC type structures are available through different establishment authorities in Qatar, including the Ministry of Commerce & Industry (Mainland), the Qatar Financial Centre (QFC), and the Qatar Free Zones (QFZ), each offering a distinct legal and regulatory framework depending on the nature of the proposed business.

Governance and Management

The governance framework of a Qatar LLC is generally familiar to international investors.

The company’s constitutional documents set out how it will operate and define the relationship between its shareholders. Managers are appointed to oversee the day-to-day running of the business and their authority can be clearly documented from the outset.

This can be particularly useful where there is more than one investor involved. Taking the time to agree how decisions will be made at the establishment stage often avoids unnecessary disagreements later on.

Regulatory Requirements

LLC company formation is only one part of the process. Once established, an LLC is subject to ongoing obligations that need to be addressed as part of normal business operations.

Depending on the nature of the activities undertaken, this may involve maintaining corporate records, renewing commercial registrations and meeting applicable filing requirements. Certain sectors may also be subject to additional conditions imposed by the relevant authorities.

These obligations are not unusual, but they should not be treated as an afterthought. Understanding what is required from the outset makes it easier to plan for the practical aspects of operating the business.

Is a Qatar LLC the Right Structure?

There is no single answer. The right structure will depend on what the business is trying to achieve and how it intends to operate in Qatar.

In some cases, a free zone entity may be more suitable. In others, a branch structure may achieve the desired commercial outcome. Businesses intending to establish a continuing presence in Qatar, employ personnel locally and undertake activities within the domestic market will often find that an LLC deserves careful consideration.

The Qatar LLC has been used by local and international businesses for many years. It is a familiar structure that remains suitable for a broad range of commercial activities and is often the benchmark against which other establishment options are assessed.

How Sovereign Group can help

Sovereign assists clients with establishing business entities in Qatar. We advise on the appropriate company structure, including setup of LLC and choosing the proposed business activities. We coordinate the incorporation process with the relevant authorities.

Once the company has been established, we can also provide ongoing corporate administration support where required. The focus is on ensuring that the structure continues to support the commercial objectives of the business as it develops.

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The UK Insolvency Service reported on 9 June that it had shut down two more companies as part of its campaign against unregulated firms that have been exploiting the Companies House register to provide more than 12,000 overseas clients with a false UK business presence.

UK Sinosia Business Ltd and Longshine Overseas Ltd, which were both wound up in the High Court in London on 2 June, had registered more than 4,300 UK companies for predominantly China-based clients, diverting all fees to Chinese bank accounts, and providing no evidence that they had carried out the required money laundering checks.

Foreign companies register on Companies House because it provides respectability and legitimacy and potentially opens up new markets and investment. However, companies that have no presence in the UK undermine economic confidence and are at high risk of being used as vehicles for fraud and money laundering.

The UK’s Economic Crime and Corporate Transparency Act 2023 (ECCTA) gave the Insolvency Service a range of tools to tackle corporate abuse and clean up the register. The cases were referred by Companies House, reflecting the two agencies’ close collaboration in cracking down on abuse of the UK company register.

UK Sinosia Business was incorporated in December 2020, with Longshine Overseas following in October 2021. Both companies charged overseas clients to register UK companies, provide registered office addresses and act as company secretaries. Both companies had no presence in the UK and were based in China.

Firms can act as a ‘broker’ for companies and provide registered UK addresses via Companies House. However, there is a legal requirement to register with HM Revenue & Customs (HMRC) as a ‘Trust or Company Service Provider’ (TCSP). UK Sinosia Business’s application was rejected by HMRC and Longshine Overseas failed to register, with no evidence of carrying out anti-money laundering checks.

UK Sinosia Business provided a registered office address to at least 2,597 client companies, while Longshine Overseas acted as company secretary to a further 1,746 and appeared to be squatting in a genuine Fleet Street address without the landlord’s knowledge or consent. They also used a single apartment in London as the registered office for 2,873 companies.

Insolvency Service investigators discovered that client fees were being paid into personal or third-party bank accounts in China and the listed director was on the record admitting that UK Sinosia Business and Longshine Overseas were essentially ‘one company’, with the same operating mode, structure and clients. She further claimed that UK Sinosia Business was registered as a TCSP, but this had been granted to a separate Hong Kong company with no legal standing in the UK.

Both companies were in reality under the control of a single Chinese national up until November 2024. His identity had not been disclosed on the Companies House register, and he denied all knowledge of the companies. But records showed he was proprietor of the leasehold address and had a signed rental agreement with UK Sinosia Business.

Following their winding up, continued enforcement action is being taken by Companies House in respect of the client companies, which were registered as trading in sectors ranging from the wholesale of alcohol to the supply of computer equipment. The clients were predominantly based in China.

The Insolvency Service has now taken action against five companies this year, which had registered more than 12,000 businesses in the UK, mostly from China. Three companies were wound up in January after the Insolvency Service discovered that they had registered more than 8,500 companies to a single address in South Croydon alone.

“Unregulated companies are bad for the economy. Public confidence in the Companies House register depends on the information on it being accurate,” said Dave Magrath, Director of Investigation Services at the Insolvency Service.

“We won’t stand for a business model based on abusing the Companies House register which damages consumer confidence and presents real risks to our economy. We’re working with our partners across government to tackle these rogue entities and protect the UK’s reputation as a trusted place to do business.”

The impact of the ECCTA has been significant. Some 151,000 company addresses have been removed from the Companies House register, almost four million individuals have verified their identities and linked their appointments, and collaboration with law enforcement partners has seen seizure of millions in suspected criminal proceeds.

Companies House is now on track to deliver the next phase of reforms. Further identity verification rollout, enhanced transparency of the Register of Overseas Entities, and a more systematic, intelligence-led approach to enforcement are all underway. It said the next phase will ensure action remains targeted, proportionate and effective, supporting legitimate businesses while targeting those who seek to abuse the system.

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14 July 2026, the UK Supreme Court held that a director cannot rely on a sincere belief that he or she is acting in the company’s best interests to justify covert and disloyal behaviour that subverts the board of directors’ agreed strategy.

In Saxon Woods Investments Ltd and others (Respondents) v Francesco Costa (Appellant) [2026] UKSC 21, the appeal concerned the standard of behaviour required of a company director, as a fiduciary who owes a duty of loyalty to the company, and who is required to act in good faith, when the director genuinely disagrees with his or her fellow directors as to the best way forward for achieving success for the company.

Spring Media Investments Ltd (SMI) was a company incorporated in England and Wales. It was the holding company for a group of companies that provide creative services to existing businesses in the fashion, beauty and luxury brand sectors. The appellant, Francesco Costa, was a director at all material times until October 2025, and chair of the board until July 2024. Costa was not himself a shareholder in the company but held a substantial indirect interest through a Luxembourg entity. The first respondent, Saxon Woods Investments Ltd, held 22.33% of the shares as at 31 December 2019.

The business was originally founded in 1996 as Spring Studios Ltd (SSL) by its initial chief executive Mark Loy, and two other individuals who left soon afterwards. On 20 May 2016, a new shareholders’ agreement was executed in respect of SMI replacing an earlier shareholders’ agreement from 2013. The parties to the agreement were: SMI, SSL, and all the invested shareholders including Saxon Woods and Loy.

Under the agreement, SMI and the investors agreed to work together in good faith towards achieving an ‘exit’ – the sale of SMI or its shares – by no later than 31 December 2019. Although the conduct of the SMI’s affairs was primarily entrusted by its constitution to its board of directors, it delegated the conduct of the sale process exclusively to Costa.

The sale process was not carried out in accordance with the agreement because Costa believed that a sale later than by the end of 2019 would be likely to generate a better financial return for SMI and the investors. The trial judge found that Costa had adopted various tactics to achieve his objective of effectuating a later sale.

These included: ensuring that no other director (save for one) had any knowledge or involvement in the sale process, misleading the board by giving his fellow directors the impression that SMI was fulfilling its obligations under the agreement (whereas to his knowledge it was not) and failing to disclose to the board that his instructions to SMI’s advisors in connection with the sale did not encompass achieving a 2019 exit.

Costa ultimately achieved his strategic objective of delaying any sale beyond the end of 2019. Unfortunately for Costa, SMI and the investors, the prospect of a profitable exit was destroyed by the adverse impact of the Covid Pandemic on SMI’s business in and after 2020.

Saxon Woods presented a minority shareholders’ petition against Costa for relief from unfair prejudice under sections 994-996 of the Companies Act 2006 (CA 2006). It did so on the basis that Costa had been personally responsible for SMI’s failure to abide by the agreed exit strategy, so that he should be ordered to buy out Saxon Woods’ shares in SMI at the price reflecting the value which those shares would have had if that strategy had been followed and an exit achieved in 2019.

At the trial, the judge held that Saxon Woods’ case on unfair prejudice had been made out, but Costa’s conduct had not amounted to a breach of fiduciary duty under section 172 CA 2006 or involved dishonesty on his part. The judge therefore made only a conditional buy-out order requiring Costa to buy Saxon Woods’ shares at the value they would have had at the end of 2019 if it could be proved at a later hearing that, had SMI complied with the agreed exit strategy agreed in the SHA, a final offer of more than USD75 million net of debt would have been received for SMI by the end of 2019.

Both Saxon Woods and Costa appealed. The Court of Appeal dismissed Costa’s appeal and allowed Saxon Woods’ appeal. The Court of Appeal ordered an unconditional buy-out by Costa of Saxon Woods’ shares, with the exact value (as at the end of 2019) to be determined at a further hearing in the High Court. The primary reason for the Court of Appeal’s departure from the trial judge’s order was that it considered that Costa had been in breach of fiduciary duty under section 172 CA 2006.

In the Appeal Court’s view, Costa’s deception of the board was dishonest according to the modern objective test of dishonesty in Ivey v Genting Casinos (UK) Ltd (t/a Crockfords Club) [2017] UKSC 67; [2018] AC 391, and therefore not in good faith. In addition, the Appeal Court held it was not open for Costa to formulate or act upon his own judgment about a strategy for the success of the company, since that had been conclusively determined by the shareholders’ agreement. Costa appealed against both conclusions to the Supreme Court.

The Supreme Court unanimously dismissed the appeal. Giving the judgment, Lord Briggs said it was a long-standing principle that the court would not interfere with the exercise of the business judgment of directors in managing the affairs of a company provided that the directors acted bona fide in what they considered to be in the best interests of the company.

The directors’ duty as articulated in Re Smith and Fawcett Ltd [1942] Ch 304 was understood as a fiduciary duty of loyalty, and the test to determine whether that duty had been breached, whether by the board or by individual directors, was described as ‘subjective’.

‘Subjective’ in this context meant that the court would not interfere with the view that directors actually and genuinely held merely because it formed a different objective view of what was really in the best interests of the company. This principle had come to be applied not only to decisions of the board, but also to decisions or acts of individual directors, in deciding whether a particular act was a breach of fiduciary duty.

However, no authority prior to the enactment of the CA 2006 suggested that the court’s respect for the business judgment of directors extended to a case where one director had sought to pursue his or her own judgment as to the best way to promote the company’s interests by a covert strategy, concealed from fellow directors, to pursue an objective that directly conflicted with the business judgment and strategy already agreed by the board as a whole. Such conduct would appear to be obviously disloyal by a fiduciary, contrary to the mode of governance established by the typical company’s constitution, and not acting in good faith.

Counsel for the appellant submitted that the requirement of good faith meant only that the director’s thought process, rather than conduct, fell within the obligation of good faith, but the Supreme Court found there were powerful judicial statements to the contrary.

A duty not to covertly or otherwise to subvert the management of the company’s affairs by the board as a whole was not expressly mentioned in section 172 or elsewhere in Chapter 2 of Part 10 of the 2006 Act, which set out what are described as the general duties of directors. But such a duty was best regarded as part of the s172 general duty, rather than something completely separate from it. This was for a number of reasons:

1. Section 172 might be read as imposing a communal obligation to promote the success of the company on the members of the board.
2. If the primary responsibility of the board was to be discharged effectively, an individual director was obliged to bring his independent view of the way best to promote the success of the company to the attention of colleagues on the board and must not by covert conduct pursue some other strategy than that decided upon by the board.
3. There were numerous indications in Chapter 2 that it was intended to affirm rather than impede the governance of the company in accordance with its constitution.
4. The concept of assimilating specific duties by directors to make disclosure to the board within what was now the s172 duty was affirmed by authority.
5. It was no answer to a claim of a breach of the s172 that the matter complained of looked more like a breach of one of the other general duties, because the s172 duty was closely related to the other general duties, and a director who acted in breach of the other general duties would also often be in breach of duty under s172 as well. In this case, Costa’s conduct might have been characterised as a breach of both limbs of s171, but that did not exclude it from the ambit of s172.

When read in isolation, said the Supreme Court, it might be suggested that the language about good faith in s172 governed the director’s thinking, rather than his conduct. On this construction, it had been contended by the appellant, that if a director genuinely believed that a certain course for the company to take was best calculated to promote its success, then the director was free (and perhaps obliged) to adopt any course of conduct he or she wished to secure that the company took that course, regardless of whether, objectively speaking, such conduct involved lies, cheating, deception, dishonesty or disloyalty.

The alternative view supported by Saxon Woods was that the requirement for good faith extended not merely to the director’s thinking but also to his or her conduct in the pursuit of achieving what he or she believed was the best course for the company to take. Saxon Woods submitted further that, even though the court would not second guess the director’s genuine view about the best way forward for the company by its own objective assessment, the requirement for good faith did involve at least some objective element if the director’s conduct was challenged in court.

The Supreme Court found that while the rigorous application of grammatical rules might be said to favour the first of those alternatives, the second construction was clearly to be preferred for three main reasons:

1. It was more consistent with a codification of the existing law – according to which the court adopted an objective assessment to the determination of the extent of a fiduciary’s duty of loyalty, and alleged breaches of it.
2. It fitted s172 better into its context as part of Chapter 2, and with its purpose.
3. It strained credulity to think that the first alternative could have been intended, because of its consequences. The notion that the careful and experienced framers of this important codification of directors’ duties thought that a director was required by s172 only to think (and not also to act) in good faith was highly unlikely and would be a recipe for chaos and paralysis in corporate governance, and destructive of the collegiality of the board.

Accordingly, the Supreme Court held that the Court of Appeal was correct to have reversed the trial judge on the question whether a breach by Costa of his duty under s172 was made out on the facts: it clearly had been. However, while the Court of Appeal focused its analysis on a conclusion that Costa had acted dishonestly, applying the objective test laid down in Ivey, Lord Briggs’s analysis proceeded upon a broader basis, concentrating on the requirement for good faith rather than dishonesty on its own, even though the dishonesty question might form part of that wider enquiry.

The test for dishonesty elaborated in Ivey made sense in the context of legal duties that arose irrespective of a pre-existing or separate fiduciary relationship. But where the defendant owed a fiduciary duty of loyalty, the question was whether that duty has been breached, and while dishonesty might be evidence of that, the duty itself supplied the relevant analytical framework; it was unnecessary to elaborate it by reference to Ivey.

The outcome in this case – that there was a breach of s172 by Costa – was the same, so the order made by the Court of Appeal could not be impugned. Lord Briggs preferred to express no view as to the correctness of the Court of Appeal’s second conclusion that Costa had been independently in breach of the s172 duty simply because the shareholders’ agreement had determined the route for SMI’s success. This was unnecessary for the Supreme Court’s resolution of the appeal.

In its judgment, the Court of Appeal had been right to hold that the trial judge had erred in ruling that Costa did not act in breach of his s172 duty to SMI. That was an important matter relevant to the exercise of discretion as to the remedy to be ordered. For that reason, and the additional reasons given by the Court of Appeal’s judgment, the trial judge’s exercise of discretion as to remedy could not stand. The Court of Appeal was therefore required to exercise its discretion as to remedy afresh and was entitled to hold that the appropriate remedy was the unconditional buy-out order which it had made.

The full judgment of the Supreme Court can be accessed at https://supremecourt.uk/uploads/uksc_2025_0149_judgment_068a722678.pdf

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The UK government signed the historic UK-EU Treaty on Gibraltar in Brussels on 14 July. The Treaty secures border fluidity for people and goods crossing the Gibraltar-Spain border, delivers economic and trade certainty for people and businesses in Gibraltar, while maintaining the full protections of British sovereignty.

From 15 July, the treaty eliminates border controls and customs checks to create a fluid frontier, allowing for the immediate removal of the border fence that has physically separated Spain from Gibraltar since 1908. This will particularly benefit the ‘frontier workers’ who cross into Gibraltar from Spain on a daily basis.

Under the treaty, Gibraltar will be connected to the Schengen Area, without becoming part of it. Persons entering Gibraltar by port or airport will face immigration checks by Gibraltarian officials and then a Schengen check, carried out by the Spanish authorities on behalf of the Schengen Area. This includes registration under the EU’s new Entry/Exit System (EES) where it applies. This will ensure that people cleared at the airport will then be able to travel freely between Gibraltar, Spain and the wider Schengen Area.

The Agreement includes provisions on visa-free travel, residence rights for persons resident in Gibraltar, and coordinated procedures for the approval of new or renewed residence permits. These provisions allow the relevant authorities in Spain to ensure that residence permits that will allow access to the Schengen area are granted in line with key provisions of EU law designed to protect public safety and security.

Gibraltar residence will be evidenced by an ID card or residence permit. Gibraltar residents are exempt from passport control and both the Entry/Exit System (EES) and the obligation to register under the European Travel Information & Authorisation System (ETIAS). Gibraltar residents also have the right to transit through Schengen EU Member States to return to Gibraltar unless specifically excluded.

The new Treaty establishes a bespoke customs model between Gibraltar and the EU, removing tariffs, duties and quotas on goods moving between them. It delivers enhancements to Gibraltar’s existing indirect taxation system that brings certain rates closer to those in the EU, without adopting VAT or any form of sales tax.

Gibraltar’s current import duty regime will be replaced by a new Transaction Tax (TT), which will be applied initially at a transitional standard rate of 15%. This rate will be increased to 16% for year two and for year three will be aligned to the lowest standard rate of VAT being applied in the EU, which is currently 17%.

The TT will be levied at the point of importation or manufacture, or when goods are brought out of bond, rather than applied at the point of sale. The tax rate will be applied to the customs value of the goods. All revenue from the TT and excise duty will be charged in Gibraltar.

A reduced rate of 5% and a super reduced rate of 0% will apply to certain goods as listed in Annex III of the EU VAT Directive. The choice will be determined by that list. Bunkering fuel, ship supplies and goods that are not to be put up for sale in Gibraltar will be exempt from the TT and from excise duties.

If goods are imported from the UK that do not meet the UK-origin rules contained in the UK-EU Trade & Cooperation Agreement, EU Common External Tariff rates will be applied. The TT would also be applied if the goods are to be placed on the market in Gibraltar.

To achieve fluid movement across the border operationally, the majority of goods destined for Gibraltar will be cleared by EU customs offices in Spain so they can enter Gibraltar without further checks.

The Treaty defines the rights of cross-border workers, who live in Spain and work in Gibraltar or vice versa, to provide a secure framework for employment, supporting the integrated labour market between Gibraltar and the surrounding region. It provides mechanisms for social security coordination so that contributions, entitlements and benefits can be administered without disruption.

Under Article 291, frontier workers are defined as either EU citizens legally residing in the Kingdom of Spain or UK nationals legally residing in Gibraltar who pursue an economic activity as an employed person (or as a self-employed person under the respective UK and Spanish laws) either in Gibraltar or in Spain and who return at least once a week to Spain or to Gibraltar, respectively.

Frontier workers’ rights are also extended to their family members – spouses, registered partners, dependant children under 21, and dependant direct relatives – provided they also legally reside in Spain or Gibraltar respectively.

There is no direct application of EU law to Gibraltar through the Treaty or enforcement role for the Court of Justice of the EU in Gibraltar. It contains provisions confirming how Gibraltar’s domestic legal system will incorporate EU law where alignment is required and confirms it will be enforced by Gibraltar’s own authorities and courts.

To enable the necessary free flow of personal data between Gibraltar and the EU, the Treaty contains provisions of the Treaty operationally viable, without the need for a data ‘adequacy’ decision for Gibraltar, in return for Gibraltar’s continued alignment with key EU data protection rules.

The Treaty also includes commitments to ensure a level playing field as regards State aid, tax transparency, labour standards, trade, sustainable development, anti-money laundering and transport. It further provides for adaptation to EU environmental law to ensure compliance with EU environmental standards and for the creation of a joint environmental impact assessment mechanism.

The Treaty was signed in the presence of the Chief Minister of Gibraltar Fabian Picardo and the Spanish Foreign Minister Jose Manuel Albares and had the unanimous backing of the Gibraltar Parliament. The government of Gibraltar was at the heart of negotiations throughout.

Gibraltar was left out of the UK-EU Trade & Cooperation Agreement following Brexit, creating the prospect of a ‘hard border’ for the 15,000 people – over half of Gibraltar’s workforce – who cross the land border between Spain and Gibraltar every day.

The new Treaty delivers practical solutions to avoid the need for onerous checks and lengthy delays at the border, providing certainty for people and businesses in Gibraltar, and opens new opportunities for flights and economic growth. It also safeguards British sovereignty and protects the autonomous operation of UK military facilities.

“This historic agreement delivers certainty for the people and businesses of Gibraltar, protects British sovereignty, our military facilities, and has the full backing of the government and parliament of Gibraltar,” said UK Minister for Europe, North America and Overseas Territories Stephen Doughty.

“Gibraltar has been at the heart of these negotiations throughout. A cherished part of the British family, its economic future and thousands of jobs depended on finding a practical solution to the challenges created by Brexit. Our support for Gibraltar remains as solid as the Rock. This agreement opens a new chapter with the EU and Spain, supporting jobs, growth and prosperity on both sides of the border.”

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