Passporting: Could Ceuta or Melilla be the solution at your doorstep?

08 March 2021

UK and Gibraltar financial services are facing significant changes to their EU operations as a result of Brexit.

Most notably, financial services firms knew that from January 1, 2021, they would lose their passporting rights, which allowed them to sell their services into the EU from their home base without the need for additional regulatory clearance. In order to access the single market, UK and Gibraltar based financial services firms now have to either comply with the regulatory requirements for market access set at the level of individual member states or rely on equivalence decisions. Equivalence is an EU system that gives single market access to financial firms in third countries such as the UK if their home rules are considered by Brussels to be “equivalent” to, or as robust as, regulation in the bloc.

Neither is a like-for-like replacement for the common EU-wide market access the UK/Gibraltar had through passporting. Seeking permissions on a state-by-state basis will add complexity and hence costs for financial services firms. Relying on equivalence brings changes in UK/Gibraltar-EU financial services trade because it does not cover the same range of financial activities as passporting.

Some companies looked to set-up a EU basis for their Investment Companies in places such as Luxembourg, Malta or Ireland. Nevertheless, did you know that there were next door alternatives that could be more advantageous for MiFID licensed companies wanting to continue to passport their services into the EU?

Ceuta or Melilla could be the alternative for you and your investment business if you are looking to set up an European Subsidiary of your Gibraltar investment management/wealth management company.

Did you know for example that the Spanish government has granted Ceuta and Melilla 50% tax exemption, both for commercial companies and personal assets. In other words, if you manage a company in the Spanish enclaves, you’ll only pay half of the usual corporate tax and income tax.

If you are interested and want to know more, please kindly join us for this GACO Webinar where the following PWC Spain Senior Partners will guide you through the advantages of considering Ceuta and Melilla as a viable alternative to enter the EU Market via a subsidiary set up in one of those locations:

Francisco Javier Cano Pelaez

Javier regularly advises credit institutions, investment services companies, asset management companies and insurance companies before the Bank of Spain, the National Securities Market Commission (CNMV) and the Directorate General of Insurance, in relation to the commencement or transformation of the activity, supervision and inspection procedures and sanctioning procedures. He also provides advice in relation to the definition and implementation of the control model for compliance with rules of conduct (Banking Transparency, MiFID II, Insurance Distribution Directive, Market Abuse).

Patricia Ferrer Torres

Patricia has been working in PwC for over 20 years focusing on the tax advice to financial entities (Banks, Credit Unions, Management entities, Spanish Branches of foreign Banks, etc.).

She has broad experience in advising these kinds of entities on tax issues that may arise on a day-to-day basis as well as the taxation of financial products/transactions, tax planning, etc.

She is specialized in the “Tax Reporting” of financial entities (tax forms, products and transactions to be included) and has extensive experience in advisory projects for the development of tools that allow the generation of tax information for clients of financial institutions.

Additionally, she has great knowledge about tax accounting and the register of temporary difference, current taxes, etc.

She has also participated in numerous business restructuring processes, investments and divestments in Spain, integration processes, etc. In particular, she actively participated in numerous acquisition and due diligence processes concerning the restructuring of the Spanish banking system.

Event Format: Webinar using GoToMeeting
Date: 25th March 2021
Time: 9.30am CET (duration 1.5 hrs)
Costs: None; this is a complementary event for GACO, GFIA, CISI and GANT members


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