Gibraltar’s strengthening confidence as a dynamic International Financial Centre

Gibraltar recently released its 2025 National Risk Assessment (NRA), providing a clear view of the government’s approach to managing financial crime risks, especially in the key areas of money laundering, terrorist financing, proliferation financing and sanctions circumvention, in line with the standards of the global watchdog, the Financial Action Task force (FATF).

This comprehensive assessment, the first since 2020, is an important milestone for Gibraltar as it continues to balance innovation with regulatory strength. Following removal from the FATF Grey List in 2024, the Gibraltar government is now preparing for the next evaluation of its anti- money laundering (ML) and terrorist financing (TF) framework and practice by MONEYVAL, the EU anti-money laundering body, in 2027.

For clients and professionals working with corporate structures, funds and trusts in Gibraltar, the NRA provides an invaluable insight into how the jurisdiction continues to evolve and where opportunities lie.

From tradition to transformation

Gibraltar’s financial sector was built on traditional products and services, notably corporate structuring and private banking. But as the 2025 NRA highlights, over the last 20 years these have increasingly been replaced by digital innovations such as online gaming, e-money products, and most recently, Distributed Ledger Technology and Virtual Asset Service Providers (DLT/VASPs).

This transformation demonstrates Gibraltar’s ability to adapt and stay relevant in a rapidly changing global financial environment, while maintaining strong regulatory oversight. Since Gibraltar’s removal from the FATF grey list, the government has continued to strengthen law enforcement and inter-agency coordination to combat complex cross-border financial crime.

Given its small size, the most complex cases involve cross-border elements and require close cooperation with overseas counterparts. The NRA highlights Gibraltar’s priority to ensure enhanced inter-agency coordination and to ensure that suspicious activity is properly investigated and supported by strong evidence for prosecution.

The NRA also draws attention to the announcement made in June 2025 regarding a political agreement between the UK and the EU for the conclusion of a treaty concerning Gibraltar’s future relationship with the EU, including with the Schengen area. It notes that this treaty is expected to bring further regulatory and operational changes in border control, data sharing, law enforcement cooperation and the movement of persons. This, it says, may have consequential impacts on Gibraltar’s exposure to ML and TF risks, increasing its broader international obligations.

Distributed Ledger Technology and Virtual Asset Service Providers

The inclusion of e-money institutions and DLT providers in the latest NRA underscores how significant these industries have become to Gibraltar’s financial landscape. In 2018, Gibraltar was among the first jurisdictions worldwide to regulate Distributed Ledger Technology (DLT) by implementing a regulatory framework, requiring businesses using DLT for the transmission or storage of value to be authorised by the Gibraltar Financial Services Commission (GFSC)

In 2021, Gibraltar strengthened its position further by introducing the Virtual Asset Service Provider (VASP) registration regime, ensuring alignment with international standards and expanding regulatory oversight. Since then, the sector has continued to grow under the supervision of the GFSC – authorised DLT providers and VASPs now hold more than £3.75 billion in client assets.

This growth reflects investor confidence and reinforces Gibraltar’s reputation as a global leader in regulated digital finance, offering a range of virtual asset (VA) services from exchanges and custodial wallets to token sales, over-the-counter (OTC) exchange services, and leveraged trading services.

Remote gambling and insurance

Gibraltar is an international hub for remote gambling operators with a small and closely regulated gambling sector consisting mainly of remote gambling operators in the Business to Customer (B2C) and Business to Business (B2B) game supply sectors. The number of gambling operators has remained steady with B2C operators increasing from 17 in 2019 to 21 in 2024, which represent about eight million active customers at any given time.

The insurance sector in Gibraltar consists primarily of general insurance companies and is one of the largest contributors to the local economy. The sector currently comprises 37 general insurers, 23 general insurance intermediaries, three life assurers and 13 life assurance intermediaries.

According to the NRA report, most of these firms underwrite risks outside of Gibraltar. Gibraltar’s insurance industry is estimated to underwrite approximately 30% of all UK car insurance policies. In contrast, the provision of life assurance products is relatively small and is undertaken by only a handful of local insurers who issue policies in lower risk jurisdictions.

As of 31 December 2024, there were 18 insurance companies offering life insurance and other investment linked insurance, generating total premium income of £38 million from 35,369 clients. Once one of Gibraltar’s fastest growing sectors, the insurance industry has now matured into a stable and well-regulated pillar of its financial ecosystem.

Strengthening cross-border oversight

Gibraltar is uniquely positioned as a gateway between Europe and Africa, but the NRA report highlights Gibraltar’s geographic exposure to Spain and Morocco, which are both assessed as higher-risk jurisdictions for ML and TF. This, it said, underscores the importance of cross-border risk management and firms must ensure robust due diligence and compliance when structuring international transactions.

The UK, by contrast, presents a more moderate profile, with ‘medium’ ML and low TF risks. The NRA also notes that fraud, cyber-enabled fraud, and the laundering of criminal proceeds remain areas requiring vigilance. These findings reflect not only the challenges faced by Gibraltar but its commitment to applying proportionate safeguards.

Raising the bar for Fund structures

Private and alternative investment funds were a key focus of the NRA. The assessment emphasises the requirement for local fund administrators and custodians, reinforcing Gibraltar’s commitment to substance, governance and investor protection. This strengthens Gibraltar’s reputation as a jurisdiction where fund oversight is taken seriously, which is particularly important in the fast-growing area of crypto and alternative investment funds.

Commitment to international standards

Gibraltar’s successful removal from the FATF grey list in 2024 marked a turning point, and the 2025 NRA builds on that achievement. The report highlights the jurisdiction’s ongoing alignment with FATF standards, with particular emphasis on transparency of beneficial ownership and the effective monitoring of complex cross-border structures. For clients, this provides confidence that Gibraltar remains firmly positioned as a trusted and compliant international financial centre.

While the NRA identifies areas of potential vulnerability, it also highlights Gibraltar’s strengths:

• Digital assets – by recognising DLT and e-money providers within the risk framework, Gibraltar reinforces its position as a credible hub for digital finance.
• Cross-border advantage – Gibraltar’s strategic location enables businesses to leverage opportunities between Europe, Africa and global markets, underpinned by strong compliance.
• Investor confidence – transparent, rigorous risk assessments enhance Gibraltar’s appeal to institutional and high-net-worth investors who value both innovation and security.

“The 2025 NRA is more than a regulatory report,” said Karl Cervan of Sovereign Gibraltar’s Business Development Team, “it is a clear signal that Gibraltar is raising standards while continuing to innovate. By addressing emerging risks in areas such as digital assets and cross-border activity, Gibraltar demonstrates that robust regulation and business opportunity can go hand in hand.

“At Sovereign Gibraltar, we understand that adapting to these shifts requires both strategic insight and practical structuring solutions. Our team is here to help clients navigate this changing environment and ensure that their corporate, trust and fund structures remain compliant while taking full advantage of Gibraltar’s evolving strengths.”