As we kick off 2022, two of Hassans’ Associates give us their thoughts on developments for the year ahead in their areas of practice and for Gibraltar as a whole.
First up, James Noguera, an Associate within Hassans’ Corporate & Commercial department.
What’s the current state of play for your area of work within Gibraltar?
Gibraltar is a jurisdiction which has historically been able to successfully overcome and adapt to unexpected changes to its status quo. This very much continues to be the case today, being a jurisdiction with a consistently firm and progressive offering consonant with the commercial realities of the current global marketplace. Specific to the corporate space, Gibraltar’s activity continues to consistently rise in prominence, recently in light of two principal factors: (i) the ‘global rebounding’ effect of the corporate markets’ return to a more familiar normality and (ii) a surge in expressions of interest, and in many cases, pursuance of positive steps by both corporate players and high-net worth individuals establishing a presence in Gibraltar in anticipation of the resolution of the ongoing negotiations between the UK and the EU over Gibraltar’s prospective bespoke accession to the Schengen acquis, which if in fact comes to fruition, is expected to further enhance Gibraltar’s offering as a post-Brexit gateway to the European markets.
Are there any new pieces of legislation on the horizon and what benefits may these offer Gibraltar as a jurisdiction?
In recent months, numerous pieces of legislation have been enacted in Gibraltar, including the new Limited Partnerships Act 2021 (the “LPA”), which has been well received by industry professionals across the board. Building on its now repealed predecessor, and in addition to serving as an (increasingly in demand) alternative legal vehicle to limited companies, the LPA seeks to expand the scope and characteristics of traditional limited partnerships. The LPA is an excellent example of effective Gibraltarian innovation intended to meet current market demands, without undergoing wholesale reform – bravo!
Are there any specific legal developments which you would like to see be implemented in Gibraltar?
My wish-list for the New Year would include a favourable conclusion to the ongoing negotiations behind the application of the Schengen acquis (or parts thereof) to Gibraltar, together with the subsequent commencement of Gibraltar’s pursuance and establishment of a double-tax treaty network with a host of jurisdictions. I believe this would again, strengthen Gibraltar’s offering specifically in terms of: (i) lessening instances of double-taxation between Gibraltar and other jurisdictions; (ii) increasing legal certainty by facilitating exchanging of information between jurisdictions, as well as introducing specific rules applying to taxes on cross-border income streams; and importantly, (iii) further enhance Gibraltar’s reputation as a tax transparent jurisdiction which collaborates internationally to combat tax evasion. After five years of uncertainty in the wake of Brexit, I do believe we are on the brink of commencing a new chapter in Gibraltar’s storied trajectory, one full of continued stability and prosperous opportunities.
And next, Hannah Lopez, an Associate within Hassans’ FinTech team
What does the coming year look like for the FinTech industry in Gibraltar?
The success of the regulated FinTech industry in Gibraltar has been benchmarked by the Financial Services (Distributed Ledger Technology Providers) Regulations (the “DLT Regulations”) 2020, sculpting the regulatory landscape. These well-established regulations continue to attract quality firms wanting to operate using best practices and within a regulated environment.
The potential of Distributed Ledger Technology (“DLT”) and its ability to enhance the way businesses operate has been showcased by the rapid expansion and exponential growth of the crypto sector. We have seen, over the last few years, the development of new products and services being offered by Gibraltar virtual asset service providers, under the supervision of the GFSC who are always keen to work closely with Gibraltar regulated virtual asset service providers so that they are able to launch new products that are in keeping with market demands in as safe a way as possible. Recently, on the 7th December 2021, the Government of Gibraltar announced that it is exploring the integration of blockchain technology into its electronic systems.
Are any new pieces of legislation in your area of practice and what benefits may this offer Gibraltar?
The Proceeds of Crime Act 2015 (Relevant Financial Business) (Registration) Regulations 2021 came into force in March of last year. These regulations impose an obligation on “relevant financial businesses” to register with the Gibraltar Financial Services Commission (“GFSC”) for the purposes of anti-money laundering (“AML”), counter terrorist financing (“CTF”) and counter proliferation financing (“CPF”) supervision. “Relevant financial businesses” will not have to register with the GFSC if it is already subject to supervision by a regulatory authority in Gibraltar.
These regulations are designed to capture token issuers and other service providers such as OTC desks or liquidity providers who would have previously fallen outside of Gibraltar’s regulatory scope entirely. Companies undertaking such business activity will now be required to register with the GFSC and show that they comply with Gibraltar’s Anti Money Laundering provisions. Applicants will also have to show that the principles behind the operation are fit and proper.
What opportunities do you believe Gibraltar has to offer for Financial Services?
There are countless opportunities. Gibraltar-authorised financial services firms have an exclusive passporting right into the UK market which is one of the largest financial services markets in the world. Passporting rights will continue for firms operating between the UK and Gibraltar.
Gibraltar is a reputable finance centre and FinTechs as well as virtual asset service providers can benefit from the legal and regulatory certainty that our Financial Services legislation provides. In Gibraltar, we work closely with key stakeholders to protect the reputation of the jurisdiction. Our professional excellence and probity in the financial services space, and in particular around the legal and regulatory complexities presented by virtual asset service providers is first class and provides businesses with opportunities to flourish in a very exciting emerging market.