Table of Contents The Brexit Reality: What Has Truly Changed Gibraltar vs Malta: Quick Comparison Legal Situation: What Brexit Really Means Taxes and Finances: Where Will You Save More? Business Setup: Practical Steps Compared Quality of Life: More Than Just Taxes Cost of Living: Budget Reality Check Practical Decision Aid: Which Location Suits You? Frequently Asked Questions The Brexit Reality: What Has Truly Changed Do you remember the time before 2020? Gibraltar and Malta were both attractive EU destinations for international entrepreneurs. Then Brexit happened, and suddenly everything was different. In the past four years, I have accompanied dozens of entrepreneurs wavering between these two locations – and I can tell you from firsthand experience: the decision has become more complicated, but its not impossible. The core of the issue: Since January 1, 2021, Gibraltar is no longer part of the EU customs union. Malta, on the other hand, remains a full EU member with all its advantages. Sounds like an obvious point for Malta? Its not that simple. What Brexit Means for Gibraltar Entrepreneurs Legally speaking, Gibraltar finds itself in a transitional position. The Gibraltar Protocol regulates relations with the EU, but many details are still not fully settled. For you as an entrepreneur, that means: more uncertainty, but also potential opportunities – if you are flexible. The main Brexit effects: – No more automatic access to the EU market – More complex trade relationships with EU countries – Limited passporting rights for financial service providers – Lack of clarity on future tax agreements Malta’s EU Benefits in Detail Malta, in contrast, enjoys full EU membership. As an entrepreneur, you have access to all EU freedoms: capital movement, services, freedom of establishment. This makes many things easier, but Malta has developed its own challenges. What does this mean for you? If your main business is in the EU market, Malta has a structural advantage. For global business, Gibraltar remains interesting despite Brexit – the only question is, at what price. Gibraltar vs Malta: Quick Comparison Before we dig deeper, here are the key facts at a glance: Criterion Gibraltar Malta EU Status Non-EU (Brexit) Full EU Member Corporate Tax 12.5% 35% (often effective rate 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 Deceiving At first glance, Gibraltar seems more attractive from a tax perspective – 12.5% corporate tax is clearly lower than Malta’s nominal 35%. But Malta’s refund system comes into play here, which drastically reduces the effective tax burden. Size Makes the Difference Gibraltar is tiny. I mean really tiny. You can cross the entire territory on foot in 30 minutes. That has advantages and disadvantages: everything is nearby, but the range of everything – from restaurants to apartments – is limited. Malta offers much more room to breathe. What does that mean for you? If youre used to big city living, Gibraltar might feel claustrophobic. Malta is also small, but large enough for variety. Legal Situation: What Brexit Really Means Gibraltar’s Special Legal Status Since Brexit, Gibraltar is a third country with special relations to the EU. The Gibraltar Protocol creates a kind of hybrid status, but many rules are still not fully negotiated. As an entrepreneur, you move in a gray zone here. The practical consequences: – More complex bank account opening (many EU banks have become more cautious) – Limited passporting rights for financial service providers – Potential trade barriers with EU customers – Uncertainty over recognition of qualifications An example from real life: Sarah, a German tax advisor, wanted to relocate her firm to Gibraltar in 2022. Suddenly, recognition of her German qualification became complicated because Gibraltar no longer automatically follows EU rules. Malta’s Solid EU Foundation Malta, on the other hand, benefits from full EU legal certainty. All EU directives apply automatically, qualifications are recognized, and you have access to all EU programs and markets. But Malta also has legal pitfalls: – Complex dual tax system – Strict beneficial ownership rules – Stricter anti-money laundering requirements since 2019 – Substance requirements for tax benefits Outlook: Stability vs. Flexibility Malta offers legal stability through EU membership. Gibraltar is more flexible but less predictable. The question is: which risk profile suits your business? What does it mean for you? If you need planning security and primarily do business in the EU market, Malta is the safer choice. For global and flexible business models, Gibraltar can remain interesting despite uncertainties. Taxes and Finances: Where Will You Save More? Gibraltar’s Simple Tax System Gibraltar is all about simplicity. Corporate tax is a flat 12.5% on all profits. Period. No complicated refund systems, no hidden traps. What you see is what you pay. Gibraltar’s tax benefits in detail: – 12.5% corporate tax (flat rate) – No tax on profits from outside Gibraltar (territorial system) – No capital gains tax for non-residents – No inheritance tax on foreign assets Sounds dreamy, but there’s a catch: since Brexit, many countries have reviewed their double taxation agreements with Gibraltar. For example, Germany now treats Gibraltar as a third country, which can limit tax advantages. Malta’s Complex but Powerful System Malta is more complicated but potentially even more advantageous. The refund system reduces the nominal 35% corporate tax to an effective 5% to 6.25% – depending on the type of profit. How Malta’s refund system works: – Corporate tax: nominal 35% – Refund to shareholders: 6/7 of the tax paid – Effective burden: 5% (trading income) or 6.25% (other profits) An example calculation: for €100,000 profit, you initially pay €35,000 tax. With the refund, you get back €30,000. Effective tax burden: €5,000 or 5%. Income Tax: The Key Difference When it comes to personal taxation, there are big differences: Gibraltar: – Residents: up to 25% on local income – Non-residents: only on Gibraltar income – High Net Worth Individuals (HNWI): special regime with flat tax Malta: – Non-Dom status: 15% flat tax on Malta income – Dom status: up to 35% on worldwide income – Minimum tax: €5,000 per year for Non-Dom Banking and Financial Services Here’s where a practical Brexit disadvantage for Gibraltar becomes clear: many EU banks have restricted or ended their business with Gibraltar. Opening a bank account now takes longer and is more complex. Malta, as an EU member, offers better access to European financial services, but compliance requirements have increased significantly since the MoneyVal report. What does that mean for you? Structurally, Malta can be cheaper with the right setup, but Gibraltar is easier to grasp. For opening accounts, Malta is now the clear winner. Business Setup: Practical Steps Compared Forming a Company in Gibraltar Setting up a limited company in Gibraltar is surprisingly straightforward – if you have the right partners. The process typically takes 5-10 working days and costs between €2,000-€4,000 with professional support. Step-by-Step Guide Gibraltar: 1. Name Reservation (1-2 days): Check and reserve company name at Companies House 2. Document Preparation (2-3 days): Create Memorandum and Articles of Association 3. Submission (1-2 days): Register at Gibraltar Companies House 4. Bank Account Setup (5-15 days): Open an account with local or international bank 5. Tax Registration (1-2 days): Register with the Gibraltar Tax Authority Minimum Requirements Gibraltar: – Minimum 1 director (individual) – Minimum 1 shareholder (individual or legal entity) – Registered office in Gibraltar (service provider possible) – Minimum capital: 100 GIP (approx. €110) Forming a Company in Malta Malta is formally more complex, but the infrastructure is better developed. A Private Limited Company usually takes 7-14 days and costs between €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 at the Malta Business Registry 3. Document Creation (2-3 days): Memorandum and Articles of Association 4. Notarization (1 day): Signature before a Maltese notary 5. Registry Submission (3-5 days): Submission to Malta Business Registry 6. Tax and VAT Registration (2-3 days): Register with the tax authority 7. Bank Account (10-30 days): Open an account (can take longer) Minimum Requirements Malta: – Minimum 1 director (EU resident or with local director service) – Minimum 1 shareholder – Company secretary (Maltese or EU resident) – Registered office in Malta – Minimum capital: €1,164.69 Substance Requirements: The Reality Check Both jurisdictions have tightened their substance requirements after international pressure. This means you cant simply set up a shell company and hope nobody asks. Gibraltar Substance Requirements: – Adequate number of qualified employees – Adequate expenditure incurred in Gibraltar – Physical presence and management in Gibraltar – Core Income-Generating Activities (CIGA) on site Malta Substance Requirements: – Minimum 2 qualified directors resident in Malta – Adequate number of employees – Board meetings in Malta with proper minutes – Core business activities conducted from Malta A practical example: Marcus, a German IT consultant, started a company in Malta in 2023. He had to prove he spends at least 183 days per year in Malta and mainly serves clients from Malta. Total compliance cost: about €15,000 annually. Ongoing Compliance Costs Now it gets interesting – and expensive. Both jurisdictions have significantly increased their compliance requirements. Cost Factor Gibraltar (annual) Malta (annual) 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 that mean for you? Expect at least €12,000-30,000 annual compliance costs for Gibraltar and €18,000-40,000 for Malta. The more complex your business, the higher the costs. Quality of Life: More Than Just Taxes Gibraltar: Living on the Rock Gibraltar is unique – for better or worse. The entire peninsula is basically one city with 34,000 residents on 6.7 km². That means: after one year youll know every bartender, but the range of restaurants is limited. The benefits of life in Gibraltar: – Everything within walking distance (max. 20 minutes) – Strong expat community (very international) – Safety (virtually no crime) – Duty-free shopping – British legal system and culture – Spectacular nature (Upper Rock, Barbary Apes) The challenges: – Extremely high property prices (average €8,000-12,000/m²) – Limited rental properties (waiting lists of 6+ months) – Constant tourists (especially in summer) – Limited cultural offerings – Reliance on Spain for daily necessities Firsthand report: Tom, a British financial advisor, has lived in Gibraltar since 2019. “The first six months were fantastic – everything was new, compact, manageable. After a year it felt like a golden cage. I know every corner, every shop, every person. It can feel confining.” Malta: Mediterranean Island Life with Substance Malta offers much more room for variety. With 520,000 residents and 316 km², youll find various neighborhoods, diverse landscapes, and an established local culture. Malta’s Quality of Life Benefits: – Diverse residential areas (from Sliema to Gozo) – Established expat communities from all over Europe – Rich history and culture (UNESCO World Heritage) – Better infrastructure (public transport, healthcare) – Proximity to Europe (2-3 hour flights to Europes capitals) – Water sports and outdoor activities Malta’s challenges: – Traffic chaos (especially around Valletta) – Over-tourism in summer months – Construction boom in recent years (gentrification) – Complex bureaucracy – Water shortages during dry summers Climate and Lifestyle Both destinations offer year-round mild climate, but with differences: Gibraltar: – Subtropical climate with Atlantic influence – Milder summers (rarely over 35°C) – More frequent winter rain – Strong winds (Levante and Poniente) Malta: – Classic Mediterranean climate – Hot, dry summers (often over 35°C) – Very mild winters – Consistent but mostly gentle winds Social Integration and Community In Gibraltar you quickly integrate into the small but international community. Expat events are regular, but options are limited. Malta offers various communities: Germans in Sliema, Italians in St. Julian’s, French in Valletta. Its easier to find like-minded people, but integrating into the local Maltese society can take time. A practical tip: in both places, networking is essential. Go to Chamber of Commerce events, join local business clubs, and invest time in relationships. It pays off, also for your business. What does it mean for you? Gibraltar is perfect for minimalists who value peace and manageability. Malta offers more diversity and options, but can be more chaotic. Cost of Living: Budget Reality Check Gibraltar: Expensive but Manageable Gibraltar is definitely not cheap. As a tourist, you won’t notice it when shopping duty-free, but as a resident you quickly feel: everything that isn’t duty-free costs British prices. Gibraltar rental costs (2024): – 1-bedroom apartment: €1,800-2,500/month – 2-bedroom apartment: €2,500-3,500/month – 3-bedroom apartment: €3,500-5,000/month – Luxury penthouse: €5,000-10,000+/month The problem: supply is tiny. Often, only 20-30 rentals are available at a time. If you have special wishes (balcony, garage, modern fittings), finding a place can take months. Gibraltar cost of living: – Restaurant meal (mid-range): €40-60 for two – Weekly groceries: €100-150 (per person) – Petrol: ~ €1.20/L – Internet (fiber): €50-80/month – Private health insurance: €150-400/month Malta: Bargains Are Over Malta was long the more affordable Mediterranean destination. That’s over. The cost of living has risen dramatically over the last five years, especially housing. Malta rental costs (2024): – 1-bedroom apartment (Sliema/St. Julian’s): €1,200-1,800/month – 2-bedroom apartment (good location): €1,800-2,800/month – 3-bedroom 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 developments are poorly built – always inspect them thoroughly before renting. Malta cost of living: – Restaurant meal (mid-range): €30-50 for two – Weekly groceries: €80-120 (per person) – Petrol: ~ €1.40/L – Internet (fiber): €30-50/month – Private health insurance: €100-300/month Hidden Costs and Budget Traps Both destinations have hidden costs that can blow your budget: Gibraltar-specific costs: – Frontier wait times (often 1-2 hours to Spain) – Higher electricity costs (island location) – Limited product choice = higher prices – Parking spots: €200-400/month Malta-specific costs: – Car insurance (very expensive for newcomers) – Air conditioning (additional €400-800 in summer) – House maintenance (salt air destroys everything faster) – Traffic fines (cameras everywhere, high penalties) Tax Optimization of Living Costs This is where things get interesting: both destinations offer ways to optimize your cost of living for tax purposes. Gibraltar: – Company cars with attractive benefit-in-kind rules – Business entertaining is deductible – Home office expenses (if you work remotely) Malta: – Company cars with 20% benefit-in-kind – Business accommodation for non-residents – Training and education expenses A practical example: Elena, a German marketing consultant in Malta, rents her apartment to herself via her Maltese company. The “company head office” is also her home, which brings tax advantages. Her effective housing costs: about 40% lower than direct leasing. Budget Planning: Realistic Numbers For realistic budgeting as an entrepreneur: Cost Factor Gibraltar (monthly) Malta (monthly) Rent (2-bedroom, good location) €3,000 €2,300 Cost of living €1,200 €900 Transport €200 €400 Insurance €300 €250 Miscellaneous €500 €400 Total €5,200 €4,250 What does that mean for you? Budget at least €5,000-6,000 per month for Gibraltar, and €4,000-5,000 for Malta. If you have higher standards, expect 30-50% more. Practical Decision Aid: Which Location Suits You? The Gibraltar Type: When Gibraltar Is the Right Choice Gibraltar is for you if: Business: – Your focus is mainly non-EU markets – You prefer simple, transparent tax structures – You prioritize flexibility over legal certainty – You want a manageable, internationally focused environment Personal: – You value minimalism and manageability – You need peace and few distractions to work – You prefer British culture and legal system – You are willing to pay for exclusivity A typical Gibraltar case: David, a British crypto trader, mainly trades with Asian markets. He appreciates Gibraltars straightforward tax system, clear crypto rules, and the fact that he can meet all key contacts over lunch. “Gibraltar is like a small, very expensive club – but once you’re in, everything works.” The Malta Type: When Malta Makes Sense Malta is your choice if: Business: – You mainly operate in the EU market – You value complex tax optimization – You need legal certainty and EU compliance – You seek access to EU funding programs Personal: – You want variety and different lifestyles – You want an established, diverse expat community – You value history, culture, and authentic Mediterranean feeling – You are willing to live with some chaos A typical Malta case: Sandra, a German software developer, sells SaaS solutions to European companies. She uses Malta’s refund system, benefits from EU passporting rights, and loves the island’s diversity. “Malta feels like real life, not a sterile tax haven.” Decision Matrix: Systematic Evaluation Rate each factor from 1 (not important) to 5 (very important) for your 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 – Works, but needs complex tax planning Strategy 2: Gibraltar Holding + Malta Operating – Holding structure in Gibraltar – Operative business via Malta – Compliance-intensive, but tax-optimal Strategy 3: Split Residence – 6 months Malta, 6 months Gibraltar – Different phases of business in different places – Maximum flexibility, but high costs The Ultimate Checklist Before deciding, clarify these points: Pre-Move Due Diligence: – [ ] Tax planning with an expert completed – [ ] Substance requirements for your business understood – [ ] Banking options clarified in advance – [ ] Visa/residency rights secured – [ ] Test stay of at least 2-4 weeks completed – [ ] Local contacts established (lawyers, tax advisors, other expats) – [ ] Exit strategy planned (in case things don’t work out) What does it mean for you? Both destinations can work, but only if they suit your business and lifestyle. Invest time in the decision – changing later is expensive and complicated. Frequently Asked Questions about Gibraltar vs Malta Is Gibraltar still attractive for EU entrepreneurs after Brexit? Gibraltar has lost EU benefits due to Brexit, but remains interesting for global business. The simple tax structure (12.5% flat) and flexible legal system remain advantages. For EU-focused businesses, Malta is usually the better option. Which location offers better tax optimization? With the right setup, Malta can be more favorable tax-wise (5-6.25% effective through the refund system), but it’s more complex. Gibraltar is easier to understand (12.5% flat), but less flexible. Both require real substance presence locally. How difficult is it to open a bank account? Malta is easier, since EU banks are less concerned. For Gibraltar, bank account opening has become more difficult since Brexit – many EU banks are more cautious. Allow 2-4 weeks for Malta, 4-8 weeks for Gibraltar. What are the minimum residency times? For tax residence: Gibraltar 183+ days, Malta 183+ days for Non-Dom status. Both jurisdictions enforce substance requirements more strictly now – plan real presence and business activities onsite. What are realistic living expenses? Gibraltar: €5,000-6,000/month, Malta: €4,000-5,000/month for an upscale lifestyle. Real estate is expensive in both, Malta offers greater choice. Which location is better for families? Malta is more family-friendly: more schools, more space, better infrastructure. Gibraltar is very safe, but also very small and expensive. Both have good international schools. How complicated is the move? Malta: EU freedom of movement makes it easier, but bureaucracy can be slow. Gibraltar: as a third country, more paperwork, but the smaller scale can make things faster. Plan 3-6 months for the complete move. Which exit strategies should I plan for? For both: observe the 5-year rule for tax residence, fulfill all local obligations, and plan proper company liquidation. As an EU member, Malta offers more flexibility for travel within the EU. Is a trial stay worthwhile? Absolutely. Spend at least 2-4 weeks living in your chosen destination, meet local lawyers and tax advisors, and explore various neighborhoods. Many decisions turn out differently after real “life” onsite. What professional support do I need? In both destinations: a local tax advisor, lawyer for company setup, and a bank introducer. In Malta: additionally company secretary service. In Gibraltar: often a corporate service provider for the registered office. Budget: €10,000-25,000 for setup and first year.
