The British territory also intends to make changes aimed at boosting its trusts administration industry, with a plan to introduce foundations also under consideration, Gibraltar’s new minister for financial services, Gilbert Licudi, told journalists at a briefing this morning at Gibraltar House in London.
Foundations are similar to a company, and are said to be preferred ahead of trusts by investors from certain countries with a traditional of civil law, such as France, as well by those in certain increasingly important Middle Eastern and Eastern European markets. Jersey passed legislation allowing foundations to be established there in 2009, and Guernsey has looked at following suit.
The requirement that experienced investor funds in Gibraltar employ as an administrator only a Gibraltar firm has long been seen by the jurisdiction’s funds industry as a problem, Licudi said. (The rule does not apply to ordinary collective investment funds domiciled in Gibraltar.)
Because of the restriction, “it was impossible for large funds to be established that required administrators which were not in Gibraltar, like HSBC, and other big credit institutions,” Licudi added. “It also made it impossible to attract funds [to Gibraltar] which were already established in other jurisdictions, such as the Cayman Islands.
“So I have accepted a proposal, the legislation has been drafted already, and I hope to have it in place very soon – possibly as soon as next week – but certainly very very soon, whereby we’re going to permit funds to be established [in Gibraltar], even though the administrator might not be in Gibraltar.”
Gibraltar is not alone in requiring experienced invesetor funds to use local administrators; Ireland has a similar requirement, according to James Lasry, partner and head of funds at Hassans, a law firm with offices in Gibraltar. However, being a larger financial services centre it has more fund administrators for fund managers to choose from.
As outlined by Licudi, the plan calls for the drawing up of a list of approved administrators not based in Gibraltar, with Gibraltar fund managers able to use other non-Gib administrators “on a case-by-case basis”.
At least one "bank-related administrator in the Channel Islands" is understood to have expressed an interest already in getting on the new Gibraltar external fund administrator list.
As reported, Gibraltar’s voters replaced their chief minister of the last 15 years in December with a 39-year-old Gibraltar Socialist Labour Party candidate and lawyer, Fabian Picardo.
Unlike many of its neighbours along the Mediterranean coast, Gibraltar has been relatively unaffected by the economic downturn that has recently jeopardised the future of the European common currency, stalled global economic activity and caused demonstrations and unrest in a number of countries, notably Greece. According to Licudi, Gibraltar’s economy grew by 6% last year, and is expected to do at least as well in 2012.
Before his meeting with journalists, Licudi, who is a Gibraltar national and until recently a partner at Hassans, was appointed a QC, a status conferred by the Crown and recognised by the British courts.