Table of Contents The Brexit Reality: What Has Actually Changed? Gibraltar vs Malta: The Quick Comparison Legal Situation: What Brexit Really Means Taxes and Finances: Where Can You Save More? Business Setup: Practical Steps Compared Quality of Life: More Than Just Taxes Cost of Living: Budget Reality Check Practical Decision Guide: Which Location Suits You? Frequently Asked Questions The Brexit Reality: What Has Actually Changed? Do you remember life before 2020? Both Gibraltar and Malta were attractive EU destinations for international entrepreneurs. Then Brexit hit, and suddenly everything changed. In the past four years, I have guided dozens of entrepreneurs torn between these two locations—and I can tell you first-hand: The decision has become more complex, but not impossible. Here’s the heart of the matter: Since January 1, 2021, Gibraltar is no longer part of the EU Customs Union. Malta, on the other hand, remains a fully fledged EU member with all associated benefits. Sounds like a clear win for Malta? Not so fast. What Brexit Means for Gibraltar-Based Entrepreneurs Legally, Gibraltar is now in an in-between position. The Gibraltar Protocol governs relations with the EU, but many specifics remain unresolved. For you as an entrepreneur, this means: greater uncertainty but also potential opportunities if you’re flexible. Key Brexit impacts: – No more automatic access to the EU market – More complex trade relationships with EU countries – Restricted passporting for financial services providers – Unclear future tax treaties Malta’s EU Advantages in Detail Malta, meanwhile, enjoys all the rights of EU membership. Here you get full access to the four freedoms: movement of capital, services, and establishment. That makes many things easier, though Malta has also developed its own challenges. What does this mean for you? If your core business is focused on the EU market, Malta offers a structural advantage. For global ventures, Gibraltar is often still interesting—Brexit or not; the only question is, at what price? Gibraltar vs Malta: The Quick Comparison Before we dive in, here are the key facts at a glance: Criteria Gibraltar Malta EU Status Non-EU (Brexit) EU Member Corporate Tax 12.5% 35% (effective often 5-6.25%) Income Tax (Foreigners) Up to 25% 15% (Non-Dom) / 35% (Dom) Languages English, Spanish English, Maltese Area 6.7 km² 316 km² Population 34,000 520,000 Climate Subtropical Mediterranean Currency Gibraltar Pound (GIP) Euro (EUR) First Impressions Can Be Misleading At first glance, Gibraltar seems more attractive tax-wise—12.5% corporate tax is clearly less than Malta’s nominal 35%. But Malta’s refund mechanism drastically lowers the effective tax burden. Size Matters Gibraltar is tiny. I mean really tiny. You can walk across the whole territory in 30 minutes. That has pros and cons: everything’s close, but options—from restaurants to apartments—are limited. Malta offers much more space to breathe. What does that mean for you? If you’re used to big-city life, Gibraltar can feel claustrophobic. Malta is also small, but big enough for variety. Legal Situation: What Brexit Really Means Gibraltar’s Unique Legal Status Since Brexit, Gibraltar is a third country with special ties to the EU. The Gibraltar Protocol creates a hybrid status, but many provisions are still pending. As an entrepreneur, you operate here in grey areas. Practical consequences: – More complex bank account openings (many EU banks have become more cautious) – Restricted passporting for financial services providers – Potential trade barriers with EU clients – Uncertain recognition of qualifications A real-world example: Sarah, a German tax advisor, tried to relocate her practice to Gibraltar in 2022. Suddenly, recognition of her German qualification got complicated since Gibraltar no longer automatically follows EU regulations. Malta’s Solid EU Foundations Malta enjoys full EU legal certainty. All EU directives apply automatically, qualifications are recognized, and you get access to all EU programs and markets. But Malta also has its legal pitfalls: – Complex dual tax system – Strict beneficial ownership rules – Tighter anti-money laundering laws since 2019 – Substance requirements for tax benefits Looking Ahead: Stability vs. Flexibility Malta offers legal stability through EU membership. Gibraltar is more flexible but less predictable. The key question: What risk profile fits your business? What does this mean for you? If you need planning certainty and are mainly active in the EU, Malta is the safer choice. For global, flexible business models Gibraltar may still be interesting, despite its uncertainties. Taxes and Finances: Where Can You Save More? Gibraltar’s Simple Tax System Gibraltar goes for simplicity. Corporate tax is a flat 12.5% on all profits. Period. No complicated refund systems, no hidden pitfalls. What you see is what you pay. Gibraltar’s tax advantages in detail: – 12.5% corporate tax (flat rate) – No taxes on profits generated outside Gibraltar (territorial system) – No capital gains tax for non-residents – No inheritance tax on foreign assets Sounds great, but there’s a catch: Since Brexit, many countries have reviewed their double taxation treaties with Gibraltar. For instance, Germany now classifies Gibraltar as a third country, which can limit tax advantages. Malta’s Complex but Powerful System Tax-wise, Malta is more complex—but potentially even more advantageous. The refund system reduces the nominal 35% corporate tax down to an effective rate of 5%-6.25%, depending on profit type. Here’s how Malta’s refund system works: – Corporate tax: nominal 35% – Refund to shareholders: 6/7 of taxes paid – Effective rate: 5% (trading income) to 6.25% (other profits) A quick example: With €100,000 in profit you pay €35,000 tax. After refund, you’ll get €30,000 back. Actual tax paid: €5,000, or 5%. Income Tax: The Key Distinction Personal taxation is where key differences emerge: Gibraltar: – Residents: up to 25% on local income – Non-residents: taxed only on Gibraltar-source income – High Net Worth Individuals (HNWI): special flat-rate regime Malta: – Non-Dom status: 15% flat tax on Malta-source income – Dom status: up to 35% on worldwide income – Minimum tax: €5,000 yearly for Non-Doms Banking and Financial Services Here’s a real Brexit disadvantage for Gibraltar: Many EU banks have restricted or closed ties with Gibraltar. Opening a bank account takes longer and has become more difficult. Malta, as an EU country, offers better access to European financial services—but compliance checks have increased significantly since the MoneyVal report. What does this mean for you? Malta can be cheaper tax-wise if you have the right structure, but Gibraltar is easier to grasp. For bank accounts, Malta is now the clear winner. Business Setup: Practical Steps Compared Incorporating in Gibraltar Setting up a Limited Company in Gibraltar is surprisingly straightforward—if you have the right partners. The process usually takes 5–10 business days and costs €2,000–€4,000 including professional support. Step-by-Step Guide Gibraltar: 1. Name Reservation (1–2 days): Reserve your company name with Companies House 2. Document Preparation (2–3 days): Draft Memorandum and Articles of Association 3. Filing (1–2 days): Register with Gibraltar Companies House 4. Bank Account Setup (5–15 days): Open a bank account (local or international) 5. Tax Registration (1–2 days): Register with Gibraltar Tax Authority Gibraltar Minimum Requirements: – At least 1 director (individual) – At least 1 shareholder (individual or corporate) – Registered office in Gibraltar (can be a service provider) – Minimum capital: 100 GIP (approx. €110) Incorporating in Malta Malta is more formally complex, but the local infrastructure is better developed. A Private Limited Company typically takes 7–14 days and costs €3,000–€6,000 depending on complexity. Step-by-Step Guide Malta: 1. Due Diligence (1–3 days): KYC check of beneficial owners 2. Name Approval (1–2 days): Approval by Malta Business Registry 3. Document Creation (2–3 days): Drafting Memorandum and Articles of Association 4. Notarisation (1 day): Signing before a Maltese notary 5. Registry Submission (3–5 days): Submit to Malta Business Registry 6. Tax and VAT Registration (2–3 days): Register with tax authorities 7. Bank Account (10–30 days): Open a bank account (can take longer) Malta Minimum Requirements: – At least 1 director (EU resident or with local director service) – At least 1 shareholder – Company secretary (Maltese or EU resident) – Registered office in Malta – Minimum capital: €1,164.69 Substance Requirements: Reality Check Both jurisdictions have tightened substance requirements under international pressure. Meaning: You can’t just set up a shell company and hope nobody checks. Gibraltar Substance Requirements: – Adequate number of qualified employees – Sufficient expenditure incurred in Gibraltar – Physical presence and management in Gibraltar – Core Income-Generating Activities (CIGA) on site Malta Substance Requirements: – Minimum of 2 qualified directors resident in Malta – Sufficient employees – Board meetings in Malta with proper minutes – Core business activities managed from Malta Practical example: Marcus, a German IT consultant, set up a company in Malta in 2023. He had to prove he spent at least 183 days per year in Malta and that most clients were served from there. Total compliance costs: around €15,000 annually. Ongoing Compliance Costs This is where things get interesting—and expensive. Both jurisdictions have become much stricter with compliance. Cost Factor Gibraltar (yearly) Malta (yearly) Company Filing 35 GIP €245 Tax Filing €500–2,000 €1,000–3,000 Audit (if required) €2,000–5,000 €3,000–8,000 Local Director Service €3,000–6,000 €4,000–8,000 Registered Office €1,000–2,000 €1,500–3,000 Legal/Tax Advisory €5,000–15,000 €8,000–20,000 What does this mean for you? You should budget at least €12,000–30,000 per year for compliance in Gibraltar, and €18,000–40,000 in Malta. The more complex your business, the higher the costs. Quality of Life: More Than Just Taxes Gibraltar: Life in the Rock Gibraltar is unique—for better and for worse. The entire peninsula is basically one city with 34,000 residents in 6.7 km². Meaning: You’ll know every bartender within a year, but dining options are limited. Pros of Life in Gibraltar: – Everything is within walking distance (max 20 minutes) – Strong expat community (very international) – Very safe (virtually no crime) – Duty-free shopping – British legal system and culture – Stunning nature (Upper Rock, Barbary Apes) The Challenges: – Extremely high property prices (typically €8,000–12,000/m²) – Limited rental apartments (6+ month waiting lists) – Loads of tourists (especially in summer) – Limited cultural options – Dependence on Spain for daily necessities A personal account: Tom, a British financial advisor, has lived in Gibraltar since 2019. “The first six months were fantastic—everything new, compact, manageable. After a year, it felt like a gilded cage. I know every corner, every shop, every person. It can get confining.” Malta: Mediterranean Island Life with Substance Malta offers much more diversity. With 520,000 residents and 316 km², you get different neighborhoods, varied scenery, and an established local culture. Malta’s Quality of Life Advantages: – Diverse residential areas (Sliema to Gozo) – Well-established expat communities from across Europe – Rich history and culture (UNESCO World Heritage) – Better infrastructure (public transport, healthcare) – Proximity to Europe (2–3 hour flights to major capitals) – Water sports and outdoor activities Malta’s Challenges: – Traffic chaos (especially around Valletta) – Overtourism in summer – Construction boom (gentrification) – Complicated bureaucracy – Water shortages in hot summers Climate & Lifestyle Both destinations offer mild climates year-round, but with distinct differences: Gibraltar: – Subtropical with Atlantic influence – Milder summers (rarely over 35°C/95°F) – More rainy days in winter – Strong winds (Levante and Poniente) Malta: – Classic Mediterranean climate – Hot, dry summers (often above 35°C/95°F) – Very mild winters – Consistent but usually gentle breezes Social Integration & Community In Gibraltar you’ll quickly integrate with the small but international community. Expat events happen regularly, but the selection is limited. Malta offers a range of communities: Germans in Sliema, Italians in St. Julian’s, French in Valletta. Finding like-minded people is easier, but integrating into local Maltese society can take time. A practical tip: In both destinations, networking is essential. Go to Chamber of Commerce events, join local business clubs, invest time in relationships. It pays off in more ways than one. What does this mean for you? Gibraltar is ideal for minimalists who value tranquility and manageability. Malta offers more variety and options, but can be a bit more chaotic. Cost of Living: Budget Reality Check Gibraltar: Expensive but Manageable Gibraltar is definitively not cheap. As a tourist, you won’t feel it with duty-free shopping, but as a resident you’ll notice fast: Everything not duty-free is at UK price levels. Gibraltar Rental Costs (as of 2024): – 1-bed apartment: €1,800–2,500/month – 2-bed apartment: €2,500–3,500/month – 3-bed apartment: €3,500–5,000/month – Luxury penthouse: €5,000–10,000+/month The issue: There’s very little supply. Sometimes only 20–30 rentals on the market at once. If you want something specific (balcony, garage, modern finish), you might wait months. Gibraltar Cost of Living: – Meal for two (mid-range): €40–60 – Weekly groceries: €100–150 (single person) – Gasoline: approx. €1.20/L – Internet (fiber): €50–80/month – Private health insurance: €150–400/month Malta: Cheap No Longer Malta used to be the cheaper Mediterranean location. Those days are gone. Living costs have soared in the past five years, especially for property. Malta Rental Costs (as of 2024): – 1-bed apartment (Sliema/St. Julian’s): €1,200–1,800/month – 2-bed apartment (good area): €1,800–2,800/month – 3-bed apartment: €2,500–4,000/month – Villa with pool: €3,000–6,000+/month Malta offers much more choice, but quality varies greatly. Many new builds are poorly constructed—always inspect carefully before signing. Malta Cost of Living: – Meal for two (mid-range): €30–50 – Weekly groceries: €80–120 (single person) – Gasoline: approx. €1.40/L – Internet (fiber): €30–50/month – Private health insurance: €100–300/month Hidden Costs and Budget Pitfalls Both destinations have hidden costs that can quickly bust your budget: Gibraltar-specific costs: – Frontier queues (often 1–2 hours to Spain) – Higher electricity costs (island location) – Limited product range = higher prices – Parking: €200–400/month Malta-specific costs: – Car insurance (very expensive for newcomers) – Air conditioning (an extra €400–800 in summer) – Home maintenance (salt air wears things out fast) – Traffic fines (cameras everywhere, steep penalties) Tax Optimization of Living Costs This is where it gets interesting: Both places offer options to optimize your living costs for tax. Gibraltar: – Company cars with favorable benefit-in-kind rules – Business entertaining deductible – Home office expenses (if remote working) Malta: – Company cars: 20% benefit-in-kind – Business accommodation for non-residents – Training and education expenses Practical example: Elena, a German marketing consultant in Malta, rents her flat to herself through her Maltese company. Her “company HQ” doubles as her home—bringing major tax savings. Her effective rent: about 40% less than on the open market. Budget Planning: Realistic Numbers Here’s a realistic monthly budget for entrepreneurs: Cost Factor Gibraltar (monthly) Malta (monthly) Rent (2-bed, good area) €3,000 €2,300 Living expenses €1,200 €900 Transport €200 €400 Insurance €300 €250 Miscellaneous €500 €400 Total €5,200 €4,250 What does this mean for you? Budget at least €5,000–6,000 per month for Gibraltar, and €4,000–5,000 for Malta. For higher standards, add 30–50%. Practical Decision Guide: Which Location Suits You? The Gibraltar Type: When Gibraltar Is Right for You Gibraltar makes sense if you: Business: – Trade mainly with non-EU markets – Prefer simple, transparent tax structures – Value flexibility over legal certainty – Seek a compact, internationally-oriented environment Personal: – Appreciate minimalism and manageability – Need peace and few distractions for work – Prefer British culture and legal system – Are prepared to pay for exclusivity A typical Gibraltar case: David, a British crypto trader, mainly trades on Asian markets. He likes Gibraltar’s straightforward tax rules, clear crypto regulation, and the fact that he can meet every important contact at lunch. “Gibraltar is like a small, very expensive club—but once you’re in, everything works.” The Malta Type: When Malta Is the Right Choice Malta is for you if you: Business: – Operate mainly within the EU market – Appreciate complex tax optimization options – Require legal certainty and EU compliance – Seek access to EU grant programs Personal: – Want variety and different lifestyle options – Look for an established, diverse expat community – Value history, culture, and genuine Mediterranean flair – Are ready for a bit of chaos A typical Malta case: Sandra, a German software developer, sells SaaS solutions to European companies. She leverages Malta’s tax refund system, benefits from EU passporting, and loves the island’s variety. “Malta feels like real life, not just a sterile tax haven.” Decision Matrix: Evaluate Systematically Rate each factor from 1 (not important) to 5 (very important) for your own situation: Factor Weight (1-5) Gibraltar Score Malta Score Gibraltar Weighted Malta Weighted EU Market Access _ 2 5 _ _ Tax Simplicity _ 5 2 _ _ Cost of Living _ 2 3 _ _ Legal Certainty _ 3 4 _ _ Quality of Life _ 3 4 _ _ Business Infrastructure _ 4 4 _ _ Community/Networking _ 4 3 _ _ Hybrid Strategies: The Best of Both Worlds Some entrepreneurs choose hybrid approaches: Strategy 1: Malta Business + Gibraltar Residence – Company in Malta for EU benefits – Personal residence in Gibraltar – Possible, but requires complex tax planning Strategy 2: Gibraltar Holding + Malta Operating – Holding company in Gibraltar – Operating business in Malta – Compliance-heavy, but tax optimal Strategy 3: Split Presence – 6 months in Malta, 6 months in Gibraltar – Base different business phases in different places – Maximum flexibility, but high cost The Final Checklist Before you decide, clarify the following: Pre-move due diligence: – [ ] Tax planning done with experts – [ ] Understood substance requirements for your business – [ ] Banking options arranged in advance – [ ] Visa/residency status sorted – [ ] Test stay of at least 2–4 weeks completed – [ ] Established local contacts (lawyers, accountants, other expats) – [ ] Exit strategy planned (in case it doesn’t work out) What does this mean for you? Both destinations can work—but only if they suit your business and lifestyle. Take your time with the decision—a change later is costly and complicated. Frequently Asked Questions: Gibraltar vs Malta Is Gibraltar still attractive for EU entrepreneurs after Brexit? Gibraltar has lost EU advantages due to Brexit, but it remains interesting for global ventures. Its simple 12.5% flat tax and flexible legal system are plus points. For EU-focused businesses, Malta is usually the better choice. Which location provides better tax optimization? With proper structuring, Malta can be cheaper (effective 5–6.25% via the refund system) but is more complex. Gibraltar is easier (12.5% flat), but less flexible. Both require real substance on the ground. How difficult is it to open a bank account? Malta is easier, as EU banks are less hesitant. Since Brexit, Gibraltar is trickier—many EU banks are more cautious. Allow 2–4 weeks for Malta, 4–8 weeks for Gibraltar. What are the minimum stay requirements? For tax residency: Gibraltar 183+ days, Malta 183+ days for Non-Dom status. Both jurisdictions enforce substance checks strictly—plan for a genuine presence and real business activity. What are realistic living costs? Gibraltar: €5,000–6,000/month, Malta: €4,000–5,000/month for an upscale lifestyle. Property is expensive in both; Malta offers more choice. Which is better for families? Malta is more family-friendly: more schools, more space, better infrastructure. Gibraltar is very safe, but extremely small and pricey. Both have good international schools. How complicated is relocation? Malta: EU freedom of movement makes it easier, but bureaucracy can be slow. Gibraltar: as a third country, there’s more paperwork, but the small size means things can move quicker. Plan 3–6 months for the full relocation process. What exit strategies should I plan? For both: note the 5-year rule for tax residency, fulfill all local obligations, and arrange an orderly company liquidation. Malta, as an EU member, offers more flexibility for moving elsewhere in the EU. Is a trial stay worthwhile? Absolutely. Spend at least 2–4 weeks in your chosen destination, meet local lawyers and accountants, explore different neighborhoods. Many decisions look different after real life experience on the ground. What professional support do I need? Both locations: local tax advisor, lawyer for company setup, bank introducer. In Malta: also a company secretary service. In Gibraltar: often a corporate service provider for registered office. Budget: €10,000–25,000 for setup and the first year.
