Overview of Banking in Gibraltar
Gibraltar has a long history of banking and international trade. Despite its small population, it attracts foreigners who are interested in opening a bank account either with the purpose of making an investment or for setting up a current account for everyday business. Earlier, it was regarded as a tax haven however, now stricter financial regulations have been enforced. Therefore, despite being a low-tax jurisdiction, it is not considered a tax haven. It is not easy to open a bank account in Gibraltar as one has to establish a close or legitimate interest in Gibraltar. Currently, only 10 Banks are operating in Gibraltar and all of them are supervised by the Gibraltar Financial Services Commission. Further, Gibraltar's banking system has close ties with both the EU and UK. Local Banks offer online personal banking services to residents only whereas they offer, wealth management services and corporate banking services to residents as well as non-residents.
Before opening a bank account in Gibraltar it is necessary to demonstrate close ties or a legitimate interest in Gibraltar. Gibraltar banks do not accept an application to open a bank account unless you have employment, property, business, or investments in that country. An exception to this thumb rule is that if you make a minimum deposit of £50,000 or more, then even if you have no ties or interest in Gibraltar, you will be able to open a bank account in that country.
On opening a bank account in Gibraltar, debit cards are issued which are used for free withdrawals from the country's ATMs as well as outside Gibraltar which is usually at a higher fee.
How to open a bank account in Gibraltar?
Step 1: Reach out to the proposed bank's office to ensure your eligibility
Only those who can establish their connection in the country or their interest in the country are eligible to open a bank account in Gibraltar. A resident can open a bank account easily but a non-resident has to establish a connection or interest in the country. Connection or interest can arise by way of employment or property in Gibraltar.
Step 2: Application to the Bank for opening a Bank Account in Gibraltar
After ensuring that you’re eligible to open a bank account in Gibraltar, make an application to the bank for opening a bank account. It shall be done by submitting the application form in the prescribed manner along with the documents required.
Step 3: Clearing the KYC and Due Diligence
Once the application is submitted to the bank, the bank will conduct its KYC and due diligence.
Step 4: On-boarding
Once you have cleared the onboarding process, your bank account will be opened.
Who is eligible to open a bank account in Gibraltar?
The persons who are eligible for opening a bank account in Gibraltar are as follows:
- Non-residents who deposit in private banking a minimum amount of £50,000.
- Non-residents who can establish that they have ties in Gibraltar.
- Residents and non-residents with ties or interests in Gibraltar.
- Companies registered and incorporated in Gibraltar.
What are the documents required to open a Bank Account in Gibraltar?
The following documents are required to open a bank account in Gibraltar:
- ID Card such as a valid passport, driving license, Civilian Registration Card, etc.
- Proof of Residence such as a rental contract, utility bill, bank statement or mortgage statement, current home insurance policy certificate, etc. Most banks want the residence to be in Gibraltar itself.
Types of Banks Accounts in Gibraltar
The common types of bank accounts in Gibraltar for everyday use are:
A personal account is equivalent to checking accounts in the U.S. and current accounts in the U.K. This account is best suitable for everyday use and is used to process everyday cashless payments.
A savings account allows free deposit for funds but restricts withdrawals and interest. In some banks, a savings account is divided into fixed-term and variable-term accounts based on the desired liquidity.
A current account can be in two ways:
What are the Most Popular everyday Banking options?
The most popular everyday banking options are as follows:
Gibraltar International Bank
The Gibraltar Government runs the Gibraltar International Bank. It is easy to open a bank account in this bank and this bank is also known to permit non-residents with residences in neighbouring countries like Spain working in Gibraltar to open an account. Two types of personal accounts can be opened in this bank:
Personal AccountOpening a personal account costs £15 per month and it provides everyday current account functions, internet banking, debit card, savings account, and access to loans and mortgages.
Personal Plus AccountOpening a personal plus account cost a steeper amount of £ 250 per month per quarter. This account has similar functionalities as that of a personal account. The only additional service in a personal plus account is that it is managed by a Relationship Manager and provides access to investment products.
Trusted Novus Bank
Trusted Novus Bank is a private bank in Gibraltar. It is a smaller bank as compared to the Gibraltar international bank. Unlike Gibraltar International Bank, Trusted Novus Bank does not provide current accounts to non-residence in Gibraltar. They charge £12.50 per month for maintaining your account. Trusted Novus Bank provides services such as card, savings, and Internet banking through the Internet banking platform NetBank.
What are the ways in which a Bank account can be opened in Gibraltar?
There are two ways in which a bank account can be opened, they are:
Approaching the Local Bank for opening a bank account in Gibraltar
If you already have a close tie or interest in Gibraltar then opening a bank account will not be much of a hassle. Close ties and interests include having a job in Gibraltar or a property. This is so because most banks require proof of residence in Gibraltar. One should first contact the prospective bank and confirm the eligibility criteria for opening a bank account in their bank. Once you have a current account in a local bank, the bank charges £10 to £20 as a monthly fee for maintaining an everyday current account. In addition to this, there are certain charges on certain types of payments, ATM withdrawals, cheques, overdrafts, and international transfers. International transfers are always charged at an exchange rate margin whenever the transfer is to another currency. Thus, it becomes important to first compare the services and find the cheapest money transfer provider, and save money.
Approaching an Online bank for opening a bank account in Gibraltar
Digital or online banks are full-fledged banks that offer all services of a usual bank. The only difference between an online bank and a local bank is that online banks do not operate out of branches and all banking services are offered online instead. They offer a limited range of services as compared to the traditional banks. However, the services offered are at a fraction of the price and are entirely online. Gibraltar's unique financial and political situation bars many EU digital banks from operating in the country. This is not a reason for despair if you're a resident of any EU or EEA country or the U.K. Because then you can open an account with an online bank and use it to handle transactions in Gibraltar. This is so because Gibraltar is a SEPA zone country and the merchants do not differentiate if the bank account is Gibraltarian or from a European country. This is one of the benefits of opening an online bank account if you live in an EU or EEA country and are looking forward to visiting Gibraltar for a short duration. However, if you're looking forward to settling in Gibraltar then it is better to open a local bank account.
Even though Gibraltar is not a tax haven, its low tax environment offers an attractive tax environment for storing foreign wealth. Gibraltar levies a low corporate tax rate of 12.5% on companies and offers attractive tax conditions for foreign wealth. It generally allows non-resident high-net-worth individuals, institutions, and corporations to open a bank account in Gibraltar even those without close ties or interest. Wealth Management and investment accounts are usually linked to payment accounts. This route to open a bank account in Gibraltar is suitable for those who have lots of wealth and no ties in Gibraltar.
Wise Multi-Currency Account
A non-resident in Gibraltar has another option to open a bank account. It is the Wise Multi-Currency Account. It allows users not only virtual and physical Visa debit card options but also to receive and pay like a local in Gibraltar and countries across the globe. One of the benefits of this account is that no identity verification and no requirement to show proof of residence in Gibraltar to obtain a Visa debit card. An exception to this rule is that you need to show proof of residence in the EU, EEA, U.S., Singapore, Japan, Australia, and New Zealand to sign up for this account. Even the residents of Gibraltar are eligible to apply for Wise Multi-Currency Account. Only residents will not be able to receive a physical debit card. However, they will receive a virtual Visa Card which will be used in the same manner as Google Pay or Apple Pay.