As a member of the Schengen zone, Gibraltar provides its residents with significant tax and travel benefits.

It looked like the age of tax-effective territories within the Schengen zone is over. However, there is Malta, Cyprus, Monaco, Andorra and now finally, Gibraltar again! 

Let's start with the background. So, Gibraltar belongs to the United Kingdom. Which was never part of the Schengen zone and even left the European Union in 2020, as a result of Brexit. 

Gibraltar is officially an Overseas Territory of the United Kingdom. Its citizens hold British Overseas Territory Citizenship, and they can apply for UK citizenship at any time. Gibraltar left the EU alongside the UK, but its unique location and history enabled it to become a member of the Schengen Agreement. 

What does it mean to join the Schengen agreement and zone?

"Schengen guarantees free movement to more than 450 million EU citizens, along with non-EU nationals living in the EU or visiting the EU as tourists, exchange students or for business purposes, anyone legally present in the EU", according to the EU's official information. 

While internal borders are open in the EU's Schengen zone, external borders are tightly managed using the new systems, such as: 

• Schengen Information System (SIS)
• Visa Information System (VIS)
• Upcoming Entry-Exit System (EES) and ETIAS for enhanced security 
  
  

If you become a resident in Gibraltar, you will have access to the Schengen zone, while keeping your taxes unnaturally low in the EU and having smooth entry to the UK as well.

Tax advantages of the Schengen Member Gibraltar in 2025

Only remitted foreign-sourced income is taxable because of the territorial tax system.

The personal income tax is flexible; there are two options: 

• The Allowance Based system is 14 to 39% with deductions
• Gross-Income Based System: This option is more suitable for High Net Worth Individuals (HNWIs) 

There are two more options, especially for HNWIs:

• Category 2 residency, minimum income is 80,000 GBP, the tax is capped at 29,880 GBP
• Under the "High Executive Possessing Specialist Skills" scheme, they pay tax on only the first £ 120,000 of income per year.  

Corporate tax is only 12,5% in Gibraltar.

Would you like to learn about the benefits of European tax jurisdictions that allow you to become a resident through investment? It is worth comparing Gibraltar with Cyprus, Malta or Monaco. You can request a consultation here, and our experts will help you find the best residency solution in the Schengen zone tailored to your needs. 

« RETURN TO ALL NEWS

---