The border fence between Spain and Gibraltar has been removed which is expected to make it easier for people and companies operating between the two regions.
Spain has also removed the British Overseas Territory from its list of non-co-operative jurisdictions.
According to Neo, a Barcelona-based cross-border payments fintech, the move reduces an important source of regulatory friction.
Laurent Descout, chief executive and co-founder of Neo, said the decision was “welcome news for businesses operating across Gibraltar, Spain and the UK.”
Gibraltar tightens rules for new high-net-worth tax residents
Descout said: “Having supported Gibraltar-based businesses with their cross-border payments for more than a decade, we saw first-hand how the previous classification created unnecessary barriers for otherwise sound companies.
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“It made it harder for some businesses to access services and required providers to apply additional scrutiny based on jurisdiction rather than the underlying risk of the company or activity.”
The changes follow Gibraltar’s decision to increase the minimum net wealth requirement for individuals moving to the jurisdiction under its high-net-worth regime from £2mn to £5mn.
Category 2 individual certificates are issued under Gibraltar’s special tax residency regime, with approved residents taxed only on the first £118,000 of assessable income, subject to a minimum annual tax payment.
The changes came into effect on July 15 alongside the UK-EU treaty on Gibraltar’s economic future.
Descout concluded that, alongside the new EU-UK agreement on Gibraltar, the changes represented “an important step towards closer economic integration and stronger commercial ties between the two jurisdictions.”
hereward.mills@ft.com