By Emma Zammitt, Senior Executive, Government of Gibraltar

When the Hon. Nigel Feetham KC MP, Minister for Justice, Trade and Industry took office in 2023, he brought with him a clear vision: to bridge the gap between Gibraltar’s young people and the wide array of careers available to them. From the start, he recognised a persistent challenge. Many students and young adults in Gibraltar were defaulting to familiar professions such as teaching, accountancy, and law, often without a full understanding of the dynamic opportunities in sectors like FinTech, Gaming, Insurance, and other financial services that are thriving in the jurisdiction.

With this in mind, the Connect Hub initiative was launched. A dynamic, ongoing programme designed to help students and young people explore career paths beyond the traditional. Through Connect Hub, the Ministry has aimed to raise awareness, inspire ambition, and equip the next generation with the insights and connections they need to thrive in Gibraltar’s modern economy.

A broader vision for career awareness

A key part of the challenge lies in deeply rooted cultural expectations. In Gibraltar, there has long been a strong emphasis, particularly among families, on pursuing well- known, traditionally “safe” professions. Many parents understandably encourage careers in law, education, accountancy, or positions within the civil service, viewing these roles as stable and respectable paths. While these professions are undeniably important, this mindset can sometimes limit the scope of what young people consider possible for themselves.

Minister Feetham believes it’s time to expand those horizons. “We want our young people to realise just how many doors are open to them,” he said. “Gibraltar’s economy is evolving, and we need to evolve with it. There is a huge demand for talent in sectors many students have never even considered.” Connect Hub provides that platform. From workshops and career days to networking events and industry talks, the initiative brings students face-to-face with professionals in cutting-edge industries. It allows them to ask questions, hear real-life stories, and get a genuine feel for what it’s like to work in sectors such as Marketing, Compliance, Software Development, Blockchain, eGaming, and more.

Highlights of the initiative

Since its inception, Connect Hub has hosted seven events across various different sectors. These have included Insurance, Banking, FinTech, Online Gaming, and Compliance, and have brought together students from local secondary schools, the Gibraltar College, the University of Gibraltar and local students studying abroad.

Some standout events have included:

• Gibraltar Bankers Association – A hands-on workshop introducing students to careers and operations within the banking sector, guided by industry mentors.
• Entain – An interactive session with one of the top international online gaming companies, giving students a behind-the-scenes look at one of Gibraltar’s largest employment sectors and its diverse career paths.
• Bitso & Bullish – Two engaging FinTech events where founders shared their career journeys and offered insights into Crypto Exchanges, Blockchain, and Gibraltar’s role as a regulated hub for Virtual Asset Businesses.
• Gibraltar Association of Compliance Officers – A practical workshop on the importance of compliance and risk management across Gibraltar’s financial services industry, with insights into regulatory frameworks that underpin Gibraltar’s reputation as a well-regulated jurisdiction.

Feedback has been overwhelmingly positive. Parents, who are also encouraged to attend these events, have praised the initiative and students have called it “eye-opening” and “inspiring,” with many expressing a newfound interest in pursuing opportunities they hadn’t previously considered.

A community effort

Minister Feetham is quick to point out that the success of Connect Hub is due in large part to collaboration with local businesses, educators, and government departments all working together to make it happen. Industry partners have welcomed the chance to connect with the next generation of professionals, and many have expressed their willingness to offer internships, mentorships, or even apprenticeships to promising students.

“This is about more than just career guidance,” said the Minister. “It’s about community-building. It’s about ensuring Gibraltar’s young people feel empowered, 10 Gibraltar International www.gibraltarinternational.com included, and ready to contribute to the future of our economy.”

Looking ahead

With more events in the pipeline and plans to expand the initiative further, the Ministry is committed to ensuring Connect Hub remains a cornerstone of youth engagement and career development in Gibraltar. The goal is to embed this kind of exposure and guidance into the educational journey of every student, not as an add-on, but as a core part of how young people prepare for their futures. As the local and global job markets continue to evolve, initiatives like Connect Hub are more important than ever. They remind us that while traditional careers will always have their place, the world is changing, and Gibraltar’s youth must be equipped to change.

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By Paul G. Astengo, Senior Executive, Gibraltar Finance, HM Government of Gibraltar

Artificial Intelligence (AI) is evolving rapidly, with groundbreaking advancements and innovative applications emerging in various sectors. From enhancing healthcare to revolutionising transportation, AI continues to transform industries and affect how we do things. The latest developments are marked by significant strides in areas such as natural language processing, autonomous systems, and ethical AI. This article looks into some of these key advancements, highlighting their potential impacts and future implications.

Natural Language Processing and Generative AI

One of the most notable advancements in AI is the progress in natural language processing (NLP) and generative AI. Open AI’s GPT-4, released in 2023, exemplifies this progress. GPT-4 is more capable than its predecessors, with improved understanding and generation of human-like text. This has opened new possibilities in various applications, including customer service, content creation, and language translation. GPT-4’s enhanced capabilities stem from its larger dataset and more sophisticated algorithms, enabling it to understand context better and generate responses that are more logical. This has made it an invaluable tool for businesses seeking to automate and enhance communication. Moreover, the rise of AI models that can process text, images, and other data types is pushing the boundaries of what AI can achieve in interpreting and generating content across different media.

Autonomous Systems and Robotics

AI’s integration into Autonomous Systems and Robotics is another area witnessing advancements. Self-driving cars, drones, and industrial robots are becoming increasingly sophisticated, thanks to AI-driven innovations. US companies like Tesla and Boston Dynamics are at the forefront of this revolution, in Europe Volvo and Daimler are actively developing electric and autonomous vehicles that could make transportation safer and more efficient. Tesla’s Full Self-Driving (FSD) system, for instance, has made significant progress in recent years. With advanced AI algorithms and vast amounts of real-world driving data, Tesla’s FSD is continually improving its ability to navigate complex driving environments. In the realm of robotics, Boston Dynamics’ robots are becoming more adept at performing complex tasks. These robots, powered by AI, can navigate challenging terrains, perform intricate manoeuvres, and even collaborate with humans in various settings. The applications of such advanced robotics span across industries, including manufacturing, logistics, and healthcare, where they can enhance efficiency and reduce human labour and error.

AI in healthcare

The healthcare sector is experiencing a transformation with AI-driven advancements that are improving diagnostics, treatment, and patient care. AI algorithms are being utilised to analyse medical images, predict disease outbreaks, and personalize treatment plans. This not only enhances the accuracy of diagnoses but also accelerates the process, enabling timely intervention. For example, AI tools may be capable of detecting conditions like cancer at earlier stages through the analysis of medical imaging. Companies like IBM Watson Health and Google Health are leveraging AI to sift through vast amounts of medical data, identifying patterns and providing insights that aid in early detection and treatment planning. Additionally, AI-powered predictive analytics are helping healthcare providers anticipate patient needs and optimize resource allocation, improving overall patient outcomes.

Ethical AI and Regulatory developments

As AI continues to advance, ethical considerations and regulatory frameworks are becoming increasingly important. The potential for bias in AI systems, data privacy concerns, and the impact of AI on employment are critical issues that need addressing. Governments and organizations worldwide are recognizing the need for robust ethical guidelines and regulations to ensure the responsible development and deployment of AI technologies. The European Union’s AI Act, for instance, aims to create a comprehensive regulatory framework that balances innovation with ethical considerations. This legislation focuses on ensuring that AI systems are transparent, accountable, and free from bias, promoting trust and safety in AI applications. Similarly, initiatives like the Partnership on AI, which includes major tech companies and research institutions, are working towards developing best practices and guidelines for ethical AI.

Future implications and challenges

The rapid advancements in AI present both opportunities and challenges. On one hand, AI has the potential to drive economic growth, enhance productivity, and solve complex problems. On the other hand, it poses significant challenges, including ethical dilemmas, the need for upskilling the workforce, and the risk of aggravating inequalities. Ensuring that AI developments mirror social values and benefits all of humanity is key. This requires collaboration from governments, businesses, and education to create policies that promote responsible AI innovation. Investing in education and training programs to equip the workforce with AIrelated skills is also essential to mitigate the potential disruption caused by automation.

Conclusion

The latest developments in AI are transforming various sectors and offering new possibilities for innovation and growth. As we continue to harness the power of AI, it is imperative to address the associated challenges and ensure that these technologies are developed and deployed in a manner that is ethical, transparent, and beneficial for all.

The post Is Artificial Intelligence the way of the future? appeared first on Gibraltar International Magazine.

By James Lasry, Partner, Deputy Head of Financial Services, and Wayne Fortunato, Partner, Deputy Head of Trusts, Hassans International Law Firm

In an ever-evolving landscape of international finance, Gibraltar has long been regarded as a strategic hub and jurisdiction of stability and security. Known for its robust regulatory framework and attractive tax environment, Gibraltar has cultivated a reputation as a global financial centre and become a premier destination for individuals and corporations seeking to protect and grow their wealth. Among the many financial tools available, Private Trust Companies (PTCs) in Gibraltar have gained prominence as versatile vehicles for the preservation and management of assets.

A Trusted Legacy

Gibraltar has a rich history as a financial centre, and its trust industry is testament to its enduring legacy. Trusts are intricate legal arrangements that allow individuals, families, and businesses to separate the ownership and control of assets and play a crucial role in estate planning, wealth preservation, and facilitating the efficient transfer of assets to future generations. Gibraltar’s trust sector, bolstered by a robust legal framework, has consistently attracted high-net-worth individuals and families seeking a safe harbour for their wealth.

The Evolution of Private Trust Companies

Within the wider history of Gibraltar trusts, the introduction of PTCs through the Private Trust Companies Act 2015 represent a relatively recent addition to Gibraltar’s financial toolkit. PTCs offer a unique advantage by granting the settlor (the person establishing the trust) a vehicle through which greater control over the management of the trust and investment decisions can be maintained. This increased level of control is particularly attractive to families with complex asset portfolios and specific preferences regarding the management of those assets. In a traditional trust structure, a professional corporate trustee is entrusted to oversee the trust’s assets and provide a degree of impartiality and level of expertise to the management of the assets of the trust. However, in certain instances, the settlor’s vision for the management of the trust may require a more bespoke arrangement which a PTC would allow. Through the incorporation of a PTC to act as trustee of their trust, a settlor is able to have a greater degree of input and control over the management of the affairs of the trust and maintain a more direct influence over their settled wealth’s direction.

In order to be registered as a PTC in Gibraltar a company must either be incorporated under the Companies Act 2014 as a private company limited by shares, a private company limited by guarantee (having or not having a share capital), a private unlimited company, or, have established domicile in Gibraltar under Part XIII of the Companies Act 2014 and Part I of the Companies (Re-Domiciliation) Regulations 1996.

Companies registered as PTCs in Gibraltar must ensure that, at all times, they have a Registered Administrator in appointment who holds a valid Class VII or Class VIII Licence and registered office in Gibraltar and that the PTC shall not solicit Trust Business or carry on any business other than Connected Trust Business or carry on Connected Trust Business in respect of anyone other than the Designated Individual, or carry on any activity other than its Connected Trust Business or any activity incidental to its Connected Trust Business.

Benefits and Uses of Gibraltar PTCs

The versatility of Gibraltar PTCs allows for them to be tailored to meet the specific needs and preferences of clients wishing to take advantage of Gibraltar’s offering, factoring in benefits and uses which include:

1. Robust Regulatory Framework

Gibraltar is a common law jurisdiction renowned for its rigorous financial regulations and robust regulatory environment which instil confidence in investors and maintains the jurisdiction’s reputation as a reliable financial centre. The Judicial Committee of the Privy Council in London is the highest Court of Appeal for Gibraltar and hears appeals from the Gibraltar Court of Appeal. The trust industry in Gibraltar is overseen by the Gibraltar Financial Services Commission who ensure that PTCs adhere to these stringent compliance standards.

2. Tax Efficiency

Gibraltar boasts a favourable tax regime that can significantly benefit trusts and their beneficiaries. There are no taxes on wealth, inheritance, or capital gains in Gibraltar, which makes it an attractive location for managing assets within a trust structure, especially for those seeking to minimize tax liabilities.

3. Expertise and Services

Gibraltar has a well-established network of professional service providers, including lawyers, accountants, and financial advisors, who are experienced in trust and estate planning matters. This expertise ensures that PTCs in Gibraltar are able to receive top-tier support and guidance.

4. Family Wealth Management

PTCs are often utilised by high-net-worth individuals as a means of centralising control and management of their settled assets, which may include investments, real estate, and family-owned businesses, and enable them to ensure that their settled wealth is preserved and passed down to future generations according to their wishes.

5. Corporate Holding Structures

Businesses can also benefit from the protection and continuity afforded by PTCs in Gibraltar, with trusts being used as holding structures for shares in various companies, facilitating efficient management and succession planning.

6. Philanthropic Initiatives

For those who may be more committed towards philanthropy, PTCs can play a crucial role in managing charitable foundations and trusts, where Gibraltar’s favourable tax environment could enhance the impact of their philanthropic initiatives.

7. Asset Protection

Gibraltar’s PTCs can also be employed to shield assets from potential risks and liabilities. By placing assets within a trust structure, individuals and businesses can add a layer of protection to their settled wealth from legal claims and financial challenges.

Conclusion

Gibraltar’s Private Trust Companies offer a powerful tool for the preservation and strategic management of wealth. With a robust regulatory framework, tax advantages, and a reputation for stability and expertise, Gibraltar has emerged as a prominent destination for individuals, families and businesses seeking to establish PTCs. Whether it’s for family wealth management, corporate holding structures, philanthropic initiatives, or asset protection, Gibraltar’s PTCs provide a flexible and reliable solution which can be tailored to the unique needs of each client.

In an ever-changing financial landscape, Gibraltar stands as a guardian of trust and security, preserving wealth for generations to come.

The post Wealth Preservation: The strategic role of Private Trust Companies in Gibraltar appeared first on Gibraltar International Magazine.

One of my fondest childhood memories is listening to my grandmother repeat the same personal financial advice every time she gave me a few pounds: “don’t spend it all in one go.” Although I often chose to neglect her wise words, and instead opted to buy as much ice cream or candy as those happy pounds would allow, I now look and understand the importance of her message: saving is very important.

However, the lesson that I had to learn myself, which I often discuss with clients, is that saving alone won’t increase your standard of living significantly. This is especially true in times like today, where inflation not only reduces our ability to save – compared to last year, diesel and food now represent a significantly larger slice of everyone’s budget – but it also reduces the value of our hard-earned savings.

HM Government of Gibraltar last published its quarterly inflation data* (the index of retail prices, a broad measure that attempts to calculate the cost of living) in April 2022, showing that prices, in general, rose by 7.6% when compared to April 2021. In simple terms, saying “the inflation rate went up by 7.6%,” is the same as saying that the average Gibraltar resident’s cost of living increased by 7.6% and that every £1 they have deposited in a non-interest-bearing account, can now only buy £0.924’s worth of groceries. Inflation is a stealthy and penalising tax.

It gets even worse. By doing some simple maths, we can calculate that if inflation averages 5% over the next 10 years, the £1 you have today will only be worth £0.60 in 2032.

Fixed income

If upon retiring, you decide to downsize and invest the leftover proceeds in fixed income paying 5% interest per year, and that is your main source of income, you will be disap – pointed when you notice that the interest you receive is no longer enough to meet your monthly budget and that you’re forced to either reduce spending or tap into other savings you may have. The picture is likely to be even worse when the July figures are re – leased. For reference, May’s inflation figure in the UK came out at a surprisingly high 9.1%: In other words, £1 in May 2021 can now only buy £0.909 worth of goods and services.

Before we move away from the doom and gloom of inflation, let us look at the most recent budget update from Gibraltar’s Chief Minister, and what it means for the immediate outlook for inflation. The £45.3 million budget deficit immediately stands out, together with the expected increase in net debt of £11.5 million. Inflation has a centuries- old history of association with worsening government finances and debt increases. Furthermore, in their speeches, central bank leaders suggest that until we see a resolution in 1) the Russia-Ukraine war and 2) covid- induced supply chain disruption, inflation is likely to persist at elevated levels.

What can you do to (try) keep up with inflation?

I’ve addressed how fixed interest investments aren’t the solution to inflation-proofing your income and wealth, and for obvious reasons, leaving money in the bank earning less than 1% interest also won’t do any good when your purchasing power is being eroded by 7% and more every year. So, what can you do?

To help us answer this, let’s look at the 1970-1982 period and use data available for the USA. Throughout this period, inflation grew at an average rate of 7.64% per year, oscillating between 3.30% (1971) and 13.30% (1979). This was indeed a very challenging period for savers. In the chart below, we compared how $100,000 growing in accordance with the annual USA inflation rate performed VS an investment in a theoretical medium-risk portfolio (60% stocks, 30% fixed income, 10% commodities). In this exercise, we also included a 1.30% total annual cost ratio on the medium-risk portfolio.

Source: Abacus Wealth Management

Conclusion

During times of rising inflation, if investors don’t want to see the value of their savings eroded, it is essential that they learn not to put all their eggs in one basket. Besides being diversified, it’s equally important that they allocate a proportion of their portfolios to risky instruments like stocks, as some blue-chip companies can pass on some of their rise in costs to consumers. Thus, they provide an important inflation-protection element to portfolios.

* Source: https://www.gibraltar.gov.gi/press-releases/index-of-retail-prices-7985

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By Jonathan Garcia, Partner and investment funds specialist, Isolas LLP

Asset classes continue to dominate the majority of investment conversations – but how have these changed over time? And what will asset classes look like going forward?

An asset is ‘a resource of economic value that can be controlled by a person, organisation or country’. While the paper definition hasn’t changed, the ‘resource’ that constitutes an asset has changed greatly.

Today, there are countless categories of asset classes. The ancient, such as gold; the historic, such as currency; the modern, such as classic cars; and the disrupters that are currently being rapidly adopted, such as cryptocurrencies.

As technology and ‘tastes’ change, so do the assets with which people want to interact. The good news for asset holders is that there are now so many respected asset classes that their portfolios aren’t just being diversified for better returns, but specifically tailored to the areas of interest of the investor.

Established and traditional

No commentary on the evolution of assets would be complete without discussing the established ‘traditional’ asset classes. Equities, bonds, property, foreign currency, and commodities are still, by far, the dominant players in the industry, holding a larger store of value than other classes. This is because they are all highly regulated with defined processes of exchange, ownership, and taxation. They are, for want of a better phrase, safe as houses.

However, while they are regulated, no asset class is risk-free. They are all traded on the open market and, as with all assets, are only worth as much as a buyer is prepared to pay. The prices of equities, bonds, commodities and currencies fluctuate continually and, while the value of property does not often shift quite as quickly, it still experiences large variation in value.

These characteristics are at the root of their appeal, and there is still the possibility for assets to appreciate. However, given the view that no asset class is risk-free, it is no wonder that new disrupters continue to appeal.

While not viewed as ‘traditional’, there are several other proven asset classes that fall into the category of ‘exotic’ assets. These include art, fine wine and spirits, antiques, as well as rare coins and stamps. These assets can be bought at both high price points and stored to further accumulate, or bought earlier in their evolution as a riskier bet as their value is anticipated to grow.

When put alongside the developing classes of assets, such as online gaming and film development, these assets can be grouped as ‘passion’ assets. These being places for people to invest money into areas that interest them with the hope they get a return so in many cases this class doubles as a store and accumulator of assets, but also a hobby.

The assets of today

In recent years, the definition of an asset has evolved even further. Cryptocurrencies and digital assets stored on the blockchain are growing in popularity. They are increasingly becoming a part of established portfolios, as well as attracting a new market of retail investors into the space. While cryptocurrency was viewed as a risky bet, increased regulatory scrutiny in established jurisdictions, such as Gibraltar, has enabled it to become more trusted, and we are continuing to see institutional capital moving into the sector. Just recently we have seen Wall Street titan Goldman Sachs looking to recruit a VP to grow its digital assets unit. Crypto is the asset of the moment, and institutions are looking at ways to increase their stake in it. Organisations and jurisdictions that are embracing the trend look set to flourish in this chapter of the evolution of assets.

While it is important to understand where assets have been, and what the current shape of the market is, it is also important for all involved in the financial services industry to be mindful of what comes next. Staying ahead of the pack is often a huge advantage. You only have to look at PwC’s 2020 Cryptocurrency Industry report to see that Gibraltar is small but mighty, having the third-largest number of crypto hedge fund managers, showcasing that early and dynamic acceptance of new asset classes can be beneficial.

The assets of tomorrow

In the decades before the advent of Cryptocurrency the idea of a line of code representing a unit of value that can be traded and exchanged for goods and fiat respectively may have sounded fanciful, but today it seems almost as natural as foreign exchange. It is always tough to predict what is on the horizon for the asset allocators of tomorrow. However, it is expected that, as in our daily lives, technology will play an ever-increasing role. Digital assets will become much broader in its meaning, encompassing more than just Cryptocurrency and a few niche tokenized assets. We will start to see huge ranges of traditional assets, from gold (already underway) to fine art and wine, tokenised, and available to trade.

However, this change may be far from the most significant. Many may think that the biggest evolution of assets in the future is their form, but in fact, it could be the access to them. Technology can democratise access to investing. Gone will be the days of needing to allocate large sums to get the best deals, we will see more people choosing to put away a slice of their earnings. This democratisation could be the biggest evolution in the history of assets, and frankly, with a bigger pool of investors, traders, and innovators, we will all be better for it.

Staying ahead in the ever-evolving landscape of assets challenges can be tricky, but managing your funds from established and respected jurisdictions with a reputation for quickly adapting to changes, such as Gibraltar can provide a head start.

The post The evolution of assets appeared first on Gibraltar International Magazine.

By Daniel Pitaluga, Senior Associate, Abacus

It’s no secret that dealing with financial matters such as investments, life assurance or retirement planning, can be complex. Just getting to grips with the language used can be challenging enough. With national governments and financial regulators constantly changing the legal and regulatory frameworks for financial services, professional advice is essential in every aspect of financial planning. It is crucial that you choose an adviser you can trust and is capable of delivering your goals and objectives.

Your adviser should be both qualified and regulated in the field you are seeking advice. You should expect to receive the most suitable recommendation and possible financial solution, personalised to your circumstances.

Listed below are some guidelines that should be considered when seeking financial advice:

Qualifications & Regulation

You should always seek advice from a professional who is qualified to the National Vocational Qualifications Framework (NVQF) level 4 and above. These qualifications require rigorous study, are testament that the individual has taken the time, and made the sacrifice to reach the enhanced standard that many regulators require. The Gibraltar regulator, Gibraltar Financial Services Commission – (GFSC) does not impose this requirement but does stipulate that every license holder is responsible to ensure any employees are suitably qualified and that they impose controls to ensure this remains the case. You are within your rights to ask an adviser to show evidence of their qualifications .

It is also imperative that the adviser’s company you decide to engage with is authorised and regulated by a recognised regulatory body. This assures you that the company meets the rigorous regulatory requirements set by its regulator to become licensed. In becoming licensed, the company has undertaken to comply with all directives and regulations issued by its home state regulator and those issued by other regulators in other countries where the license holder may be authorised to conduct business. Such directives and regulations are generally designed to uphold the highest standards of integrity and consumer protection and firms can be heavily penalised (and have their licenses revoked) for non-compliance.

Appropriate advice

An adviser can only provide appropriate, personalised advice, once he/she has obtained detailed information about your personal and financial circumstances as well as understanding what your objectives are. You should provide your adviser with as much information as possible and provide him/her with appropriate letters of authority in order that they can request details of any information that you may be missing on any existing financial products, where necessary. The correct diagnosis can be provided only once the information has been analysed. If an adviser attempts to provide you with recommendations without going through this process, you should ask them why. At best, they are working blindly and that may not lead to the best possible results.

Cost transparency

One of the main prejudices the public has with financial advisers is that they never really know how much they are paying or whether they are paying too much, or what is a fair and reasonable charge. It is not unusual for financial advisers to be remunerated on a commission basis and receive this commission payment from an insurance company, to then claim their advice is free. If you hear this claim, it should ring a very big alarm bell. You are fully entitled to ask how your adviser is being paid for his/her work and how much they are going to receive. Commissions paid by product providers, are ultimately funded by you as the client (and not by the insurance company as some advisers would have you believe) from your lump sum investment or regular premiums. These commissions are usually funded by way of additional charges to then product your purchase and can be as high as 8%! You should always request a full breakdown of all fees involved in the process including those of your adviser, and any third party product/service providers. When a financial adviser makes a product recommendation, he should always provide you with a product illustration before you commit to proceeding with the application.

Simplicity

An adviser’s aim should be to make the whole process of receiving advice as simple as possible. It would be unethical and unscrupulous for an adviser to recommend a solution to a client without them knowing exactly what they are getting himself or herself into. One of the main aspects of this simplification process is breaking down unnecessarily complicated jargon into terms understood by people who are not financial professionals. If you don’t understand something, make your adviser explain it in simple terms. They should have no issue in doing so. It is in their interest as much as yours because it should ensure a happy customer and no surprises which in turns fosters a trusted relationship

Professionalism, trust and integrity

One of the most important (if not the most important) aspects of the customer-adviser relationship is trust. However, trust is only earned over time and should not simply be granted because of the adviser’s position in the relationship. A trusted adviser will always act in your best interests, even if this means advising a client against a certain course of action for which the adviser could be remunerated. A good adviser should be willing to prove to you, by his/her manner and performance, that they always have your best interests in mind.

Keeping in touch

It goes without saying that a good adviser will be committed to provide a first class service and aim to obtain the best possible results at all times. The adviser should make this a long-term commitment. Circumstances and plans change which are likely to lead to changes to financial plans. A review of your arrangements should be undertaken at least annually.

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Gibraltar Tames the Wild West

By Daniel Pitaluga, Senior Associate at Abacus Financial Services Ltd

What started out in January 2017 as another ordinary year, in the aftermath of a unpredictable 2016 which saw Donald Trump elected US President and in which Britain voted to leave the EU, slowly evolved into a revolutionary era with the rise of a phenomenon understood properly only by an elite of tech experts but which would, in a similar fashion to Trump and Brexit, shape the future of the financial world.

Bitcoin

This was, as you may have guessed, the emergence of cryptocurrencies, more popularly referred to loosely by the name of the first and leading cryptocurrency, Bitcoin. In January 2017, the price of a Bitcoin was around $950 and as the world started whispering about its potential, people flocked to any cryptocurrency exchange willing to accept them so they could get their hands on some precious and seemingly valuable Bitcoin.

Whether it was genuine investors who saw the potential of cryptocurrency as a new asset class, fraudsters who heard they could shelter money and make anonymous transactions, or anyone who heard of it as this year’s get-rich-quick scheme, the rush brought Bitcoin and blockchain technology directly into the global spotlight. By December, the price of Bitcoin had surged to over $20,000, representing a return for investors of over 2000% in under 12 months.

This, unsurprisingly, led to talk of an impending bubble bursting, one similar to the dot.com bubble in the late 90s, which would surely knock cryptocurrency off the grid once and for all and allow us to return to life before Bitcoin. This early period was a time when governments were unsure how, or indeed if, cryptocurrencies could be regulated; when banks were terrified of the threat this new technology posed to their well-established and over-relied-on system; the rise of scam Initial Coin Offerings (ICOs); and people purchasing their cryptocurrencies on unregulated exchanges. It could only be described as the crypto wild west.

Regulatory framework

2018 ushered in a time of change, with many governments banning or curtailing the use of blockchain technology and anything related to it. There were, however, a few jurisdictions which embraced the change and saw the opportunities it might give rise to.

The Government of Gibraltar made the bold decision to try to be the first jurisdiction to release a regulatory framework governing the use of distributed ledger (or blockchain) technology (DLT). It was a move similar to that made at the turn of the millennium when Gibraltar began regulating the iGaming industry and attracting high quality, new business which now sees an estimated 60% of bets made online processed by a Gibraltar-based company. The aim is to now open the doors to blockchain companies and emulate this success.

Fast forward to June 2018 and the Gibraltar Financial Services Commission (GFSC) is processing over 30 licence applications for blockchain companies, with big players such as Xapo and e-Toro publicly stating that Gibraltar will be integral to their future. The Government is about to release its second regulatory framework, this time focused on token sales. This aims to facilitate an ecosystem that eradicates scams and wild ideas and focuses on bringing high quality blockchain business to Gibraltar.

In addition to the well-established players, there will also be many smaller startups wanting to launch their token sales and bring their ideas to fruition. In order to do this and to abide by the new regulations they must set up in Gibraltar, or at least be able to evidence that the mind and management of the company is in Gibraltar. This might be achieved by the appointment of locally based corporate directors or via the relocation of the entire team, or part of its senior management to Gibraltar.

The pursuit of a regulatory license does not come without its challenges. The first step for any prospective licensee is to obtain a legal opinion from a Gibraltar lawyer. Once the legal opinion is attained, the company will be incorporated and a bank account opened. There are currently two crypto-friendly banks in Gibraltar. The lawyers will assist with any license applications required. These key steps to a successful relocation are not the only considerations when setting up. The company will require additional services, such as company secretary, corporate governance advice, accounting and local tax compliance.

The bigger picture requires not just these services but a whole range of others that require local know-how and the right professional networks. Whether it involves obtaining office space, recruiting skilled staff, executing payroll or even a company pension scheme. Any company wanting to move to Gibraltar will benefit from a trusted partner to take care of their obligations, while the entrepreneurs focus on what they do best, their business, ideas and plans and prepare for that successful launch.

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 By Paul Astengo, Senior Executive, Gibraltar Finance and Adrian Pilcher, Partner, Isolas

In March, Albert Isola, Minister for Commerce, presented a Bill in the Gibraltar Parliament that would allow for the creation of Private Foundations in Gibraltar.

In 2012, the Gibraltar Society for Trust and Estate Practitioners proposed a number of legislative reforms to the Ministry of Financial Services in the area of trusts and family offices. Inter alia, these proposals included a recommendation for the introduction of foundations legislation providing for the establishment of private foundations in Gibraltar.

The introduction of foundations legislation provides additional choice and flexibility for the fiduciary sector of the financial services industry, and its clients, whilst allowing Gibraltar to continue to meet international obligations through high standards of transparency and compliance.

 STEP

The Ministry resolved to introduce foundations and directed STEP to prepare the relevant legislation, with the help of the Government Law Offices and as part of an industry wide working group bringing together expertise from across the private and public sectors in Gibraltar.

Private Foundations have existed in Europe since at least 1926 and were introduced to provide a civil law equivalent to common law trusts. Since the 1990s, a number of common law jurisdictions introduced foundations legislation, for example Panama in 1991 and the Bahamas in 2004. The Foundations (Jersey) Law came into force in 2009, and likewise the Foundation (Guernsey) Law in 2012.

No single legal definition of a foundation exists however; it may be described as a legal entity created when a person provides assets for a specific purpose. The foundation holds the assets for purposes set out in its constitutive documents and administered according to contractual rather than fiduciary principles – principles that make them acceptable to people who are uneasy about using trusts. The foundation is a distinct legal entity but unlike a company, it has no shareholders.

Public register

Foundations are structures used in similar circumstances to traditional family trusts but are familiar to clients and intermediaries with a civil law background. As foundations, unlike trusts, are legal entities they will, in accordance with Gibraltar’s legal tradition, be entered onto a public register administered by the Gibraltar Registry.

Foundations generally have common features including legal personality and in many jurisdictions are visible on a public register. The Founder, who provides the initial assets of the foundation known as the endowment, forms them. The foundation holds assets for the purposes set out in its constitutive documents and administered according to contractual rather than fiduciary principles. Run by a council (or board) which is responsible for fulfilling its purpose it has no shareholders and, depending upon its purpose, may or not have beneficiaries. A requirement is that at least one councillor is a Gibraltar resident company licensed as a professional trustee in Gibraltar.

Beneficiaries have contractual rights to enforce the operation of the foundation in accordance with its constitutive document – rather than proprietary rights in its assets, or equitable rights such as are available to beneficiaries of trusts. A foundation may also have an advisor or protector if its rules so provide.

There is a demand for foundations domiciled in a well-regulated, co-operative and transparent jurisdiction.

Private foundations are flexible philanthropic vehicles, often created to fulfil the philanthropic goals of a family. They are not usually designed to carry out charitable work but they do instead support charities in carrying out that work.

Private foundations have become increasingly popular and in some cases have become highly visible as people of significant wealth carry out philanthropic work. In some very high profile cases the monetary value held by private foundations runs into the billions. The increase in popularity is also due to a greater awareness among advisors of the benefits of establishing private foundations for example.

At the outset, the main contributor will decide whether it is the intention to have control over activity the private foundation undertakes. This allows ongoing and flexible decisions on how the funds are to be invested and distributed.

It is usual for family members over several generations to have a hands on role in the activity undertaken providing invaluable experience and an early understanding of the value of good giving.

The Private Foundations Act 2017 commenced on 11th April 2017 and can be viewed here: www.gibraltarlaws.gov.gi/articles/2017-03o.pdf

This Act has created consequential amendments and these reflect in the following:

1. Income Tax Act 2010 www.gibraltarlaws.gov.gi/articles/2010-21o.pdf
2. Financial Services (Conduct of Fiduciary Services Business) Regulations 2006 www.gibraltarlaws.gov.gi/articles/2006s139.pdf
3. Financial Services (Investment and Fiduciary Services) Act www.gibraltarlaws.gov.gi/articles/1989-47o.pdf
4. Rates of Tax Rules 1989 www.gibraltarlaws.gov.gi/articles/1989s096.pdf

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2014 proved to be a significant year for expansion of Gibraltar’s overseas representation politically and for business development, but this year is likely to play an even more critical role

James Lasry, Chairman of the year-old AMCHAM (American Chamber of Commerce) Gibraltar group told Gibraltar International in April that following a US trade mission by ten firms in November, “we have a couple of big deals that are still cooking – deals in the areas of energy and renewable energy that will really impact on Gibraltar in a big way”.

“They are subject to a tender process that began last May; if successful, they will mean millions of pounds of inward investment”, promised the Hassans lawyer.

AMCHAM Gibraltar – now with 27 member firms – was promoted by Chief Minister, Fabian Picardo, to give impetus to his push for inward investment from beyond traditional (principally, UK) markets.

Picardo said in the Gibraltar International interview nearly 18 months ago: “I think you can expect to see great interest from US commercial entities seeing what they can do in Gibraltar with access to the EU and also to North Africa, which is becoming increasingly important to the US.”

Since establishing representation in Washington in 2012, several high profile visits by the Chief Minister and his deputy, Dr Joseph Garcia, has given Gibraltar greater prominence.

The pair have met with the Council on Environmental Quality in the White House and outlined Gibraltar’s aim for carbon neutrality, including changing power generation fuel from diesel to gas to reduce emissions and introduction of alternative energy sources.

Gibraltarian and long-time US resident, Joe Carseni, a member of the Gibraltar-American Council, was appointed The Rock’s American representative to garner political support, but he also promotes “the attraction of business opportunities and commercial investment in Gibraltar”.  Holland & Knight, a law and lobbying specialist agency, was appointed in May to raise Gibraltar’s profile before the Executive and Legislative branches of the Government in Washington.

A mix of politics and business generation is on the agenda too for significantly expanded EU representation. Last October former South West & Gibraltar MEP, Sir Graham Watson, was appointed to lead and direct lobbying from new, larger Brussels premises, as well as “facilitating the promotion of business in Gibraltar”. Sir Graham’s emphasis is on relations with the European Parliament and MEPs elected last year, and with the new European Commission, enhancing communication with the UK’s Permanent Representation to the EU (UKREP).

The Rock’s business interests with particular EU significance include eGaming, taxation, aviation, environmental and maritime matters. Sir Graham – an MEP for ten years – arranged meetings with the Parliament and Commission in April for Garcia’s second Brussels visit this year, to include the latest developments relating to Gibraltar’s position in the EU.

It was timely: Picardo had controversially just called for each part of the UK to have an individual say in negotiations if there is to be a vote on Britain’s possible EU exit – something that will become clearer after the UK General Election on 07 May. “The only existential threat to our economy is one where we are pulled out of the European Union against our will and denied access to the single market,” he told the Financial Times in an interview.

The push for greater EU recognition began under the previous administration.  However, “it is true to say that the Brussels office had been downgraded in the past and that this Government has chosen to upgrade it once again”, Dr Garcia told Gibraltar International.

“There are a whole host of issues that affect Gibraltar’s position in the European Union and we must be there to meet those challenges”, he explained, pointing to Spain’s decision to abandon a 2006 Cordoba agreement with Gibraltar that has seen efforts to exclude Gibraltar Airport from EU civil aviation legislation, which he told MEPs would be “illegal and contrary to the [EU] Treaties”.  Spain was also hindering the free movement of people at the La Linea border.

Two Gibraltar exhibitions – accompanied by numerous meetings with EU politicians and officials and media – have been held at the Brussels Parliament.  The first – in June 2013 – marked the 300th anniversary of the signing of the Treaty of Utrecht, which gave Gibraltar its British credentials, as well as the 40th anniversary of Gibraltar’s entry into the European Economic Community (as then) as a European Territory for whose external affairs a Member State [the UK] was responsible.

Gibraltar engages with the EU directly, because it otherwise relies on the UK to represent its interests. As part of mainland Europe, Gibraltar is able to passport financial services such as funds and insurance throughout the 27 EU countries: “Gibraltar may have more appetite for more Europe than the UK in the coming years”, Picardo has emphasised.

Dr Garcia admits the Brussels office focus will be mainly political, but said: “There is scope for commercial and economic activity as well and many of the issues that the office will touch upon, like aviation, the frontier and tax, will have a clear economic impact as well”.

EU representation is being modelled on the success of Gibraltar House in London’s Strand: it has been “essential to maintain the position there and to lobby for Gibraltar on the different political issues that arise”, Dr Garcia opined.

But it wasn’t always so. As London office director, Albert Poggio, recounts: “Initially, when I began in 1988 we had opposition from the Foreign Office, which didn’t want us working in London and didn’t recognise us.  In those days, when the Chief Minister came to London we were lucky to get five MPs to meet him; now the Gibraltar Group is the second largest lobby group in Parliament with 120 MPs”.

After May’s UK general election however, “we will need to build up again the support for Gibraltar”, Poggio noted, adding: “But at least the Foreign Office is now on-side.”

Gibraltar Finance (GF) no longer has its own full-time representative at the London office following Victor Galliano’s decision to return to the City.  The London role, for which members of the Gibraltar Finance Centre Council long campaigned, was described as “a strategic presence in the heart of Europe’s largest financial centre and one of the most important globally”.

Galliano assisted three Gibraltar-based colleagues – in insurance, funds and private clients – with London contacts and sought opportunities for business development.  Jimmy Tipping, GF director, says there are no plans at present for a replacement – that aspect has been “paused”.

Having grown from three Gibraltar House staff to ten, Poggio in 2008 persuaded the then government to buy the present £6m+ four-storey premises that has since quadrupled in value. Poggio now plans retirement next year, but aims to continue as a part time consultant.

His nominated successor is Jason Cruz, the 41 years old representative of Gibraltar in Hong Kong (HK), where opening of the Asian office a year ago was a surprise; no reference had previously been made to the former British colony being a target for trade development.

But Cruz, in the course of work for major Asian firms in financial services, banking and property investment, had introduced over previous years several local business partners and investors to “a dialogue with Gibraltar”.

Candidly, Picardo recently admitted it was a move that “should have happened a long time ago. It is an area that has unfortunately been neglected.

“We have therefore seen the growth of the Chinese economy to a great extent pass us by and we’re arriving late to the party, but it’s a party we cannot afford to miss, even if we are arriving late to it.”

Cruz, with an assistant, has organised six ministerial visits to Hong Kong covering education, the financial sector, tourism and maritime services, which he believes have resulted in “some business”.  Another visit is imminent – this time led by the private sector and includes representatives of the new Gibraltar Stock Exchange on their fourth trip.

But Cruz, in the course of work for major Asian firms in financial services, banking and property investment, previously had introduced several local business partners and investors to “a dialogue with Gibraltar”.

The new office will encourage Chinese investors to use Gibraltar for both direct investment on the Rock and crucially as an entry-point into the European market, something that Financial Services Minister Albert Isola emphasised to HK funds sector firms last September.

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With Listing Members now signed up and approved, and listing applications being filed with GSX Limited (GSX), interest is turning towards the listing process itself. What are the benefits and how does the listing process work?

GSX was granted its authorisation to commence its operations as Gibraltar’s first ever regulated stock exchange on the 10th October 2014 with the listings business expected to commence during the first quarter of 2015. GSX currently operates as a listing only exchange for open-ended funds that are licensed, registered, authorised and/or regulated as a Collective Investment Scheme (CIS) by a competent authority empowered to supervise financial services in a GSX recognised State. To that end, GSX is a regulated exchange that operates in many ways as a European fund distribution platform. Some allocators are restricted from investing a % of a fund or clients assets in vehicles that are un-regulated or unlisted and GSX provides a straightforward solution to a European listing option for a fund. Similarly, a listing can form an important part of any investors due diligence process on a fund and the approval of a regulated exchange, support from a Listing Member (or ‘sponsor’), and approval from the listing authority can provide a strong message to potential investors.

GSX offers a simple, cost effective, and professional listing option for a fund in a European jurisdiction. In the most recent independent Global Financial Centres Index (16th Edition) Gibraltar ranked higher than the Cayman Islands, Malta, the Isle of Man or Jersey as a Financial Centre.

The advantages of a GSX listing

GSX provides a secure platform for investors and managers to come together, and it delivers a reliable, fast to market, and cost effective service that enables applicants to market to investors looking for greater transparency and visibility through an EU listing.

The GSX portal allows investors to filter their searches by individual or multiple criteria in order to identify their preferred choice of investments including geography, asset class, manager, and currency.

Over time, GSX plans to adopt a graduated progression to a full service stock exchange providing trading and execution services across a wide range of products, but not limited to debt and equities.

Listing of open-ended collective investment schemes: need to know

Other than the conditions specified in the CIS Code, the following general conditions must be met for those wishing to apply for listing:

^l An applicant must be duly incorporated or otherwise validly established according to the relevant laws of its place of incorporation or establishment of a GSX Recognised State, and must operate in conformity with its Constitutive Documents.

^l An applicant must be an Open-Ended Fund and must be regulated by the Competent Authority of a GSX Recognised State or be otherwise acceptable to GSX Limited and the Listing Authority.

^l An applicant must have audited accounts for the last financial year.

^l An applicant may not change its principal investment objectives and policies as set out in its Listing Particulars unless the consent of the unit-holders representing a majority of the Units of the applicant that are in issue has been obtained in advance.

^l An applicant must not be permitted to issue bearer shares and/or Units under its constituting documents.

^l The applicant must satisfy GSX and the Listing Authority that its Controllers together with any appointed investment manager have sufficient and satisfactory experience in the management of investments of the type in which the applicant intends to invest, or currently invests.

^l The Controllers of the applicant must be able to demonstrate their ability to act independently of any appointed investment manager of the applicant.

^l The aggregate market value of the Units of an applicant must be at least €1,000,000 or the foreign currency equivalent within 12 months of the applicant’s launch if the applicant is a new Fund, or above €1,000,000 if the Fund has been active for more than 12 months.

^l Once listed, an applicant must continue to comply with all requirements of the CIS Code.

Application process: an outline

Typically, the fund will select a Listing Member (who are approved by GSX, and listed on the GSX website). The Listing Member will manage the application process adhering to the application for admission to listing set down in the CIS Code.

The Listing Member is then responsible for dealing with GSX on all matters relating to the listing application and will work closely with their advisors and the applicant in preparing the applicant for listing. The Listing Member will also work with the applicant post-listing in ensuring that the applicant is aware of and adheres to its continuing obligations, fulfilling its regulatory responsibilities.

The applicant will require that its Listing Particulars comply with the GSX requirements. This will involve the disclosure of detailed information relating to the fund and its business, including the fund’s controller names and contact information, its location, legal status, investment strategy and assets under management.

Once an application has been completed and submitted, membership is then considered by GSX’s Membership Committee. Documents that need to be submitted include the application for the listing, as well as a completed checklist, and the listing particulars which will need to be compliant with the Listing Code. Once the application is completed, GSX will then consider the application and, once approved, deliver this to the Listing Authority.

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