In a Press Release issued to local media this week, the Gibraltar Federation of Small Businesses (GFSB) has made detailed written submissions to the Minster for Business regarding the Government’s Gibraltar Residency Policy. While recognising the Government’s objective of protecting public services and ensuring long-term fiscal sustainability, the GFSB says the proposed measures represent a significant change to Gibraltar’s previous residency policy. 

The Federation has outlined a number of concerns regarding the Policy, highlighting that elements of the proposals could make doing business in Gibraltar harder, make recruitment and retention more difficult with the potential for wider negative effects on member businesses.

The Government responded to the Federation’s representations within 24 hours, issuing a detailed four-page reply addressing the concerns raised.

Among the Federation’s principal concerns are that;

• The proposed minimum earnings threshold of £37,500 for residency. 67% of all jobs in Gibraltar fall below this threshold, raising concerns about its potential impact on employers’ ability to attract and retain staff:
• The policy will have most impact on British nationals living and working in Gibraltar who currently account for 16.3% of resident full-time workers, the largest grouping in Gibraltar – larger than all other nationality groups put together*. 
• Proposed arrangements for new businesses and self-employed individuals, requiring upfront payment of social insurance and tax could discourage entrepreneurship and make Gibraltar a less attractive place to establish new businesses.
• The residency age ceiling of 55 is comparatively young when compared to retirement ages in the private sector and elsewhere in Europe.
• Greater clarity, including specific criteria, should be provided for the exercise of Ministerial discretion.

Importantly, the GFSB has asked the Government to share the data, modelling and any impact assessment underpinning the proposals to enable businesses and the wider community to better understand the scale of the challenge the policy seeks to address.

A spokesperson for the GFSB commented;

“We recognise that the Government is trying to strike a careful balance between protecting public services and supporting Gibraltar’s long-term prosperity. Our response has been prepared in that spirit.

“Our concern is that some of the proposed measures will make it harder for businesses to recruit and retain staff, already considered to be a very substantial challenge in Gibraltar, at a time when employers are already facing significant pressures and preparing for major changes associated with the Treaty.

Whilst the Treaty may result in increased interest in Gibraltar residency, improved border fluidity under the Treaty may result in an outflow of Gibraltar residents. 

“We believe this is an important conversation for Gibraltar. By sharing the data and analysis behind the policy, Government can help businesses and the wider community better understand the rationale for these proposals and contribute constructively to the discussion.”

Government Responds

In its response, Government emphasised that the proposed framework relates to eligibility for residence, rather than eligibility to work in Gibraltar, and argued that many of the concerns raised stemmed from conflating the two. It also confirmed that the regulations, expected to be published shortly, will include additional flexibility for skills shortages, sectoral needs, entrepreneurship, transitional arrangements and ministerial discretion.

Government further advised that it has already amended aspects of the proposals following feedback from the GFSB, including changes relating to accommodation commitments before approval and more proportionate arrangements following the termination of employment.

The Conversation Continues

The GFSB welcomes the speed and detail of the Government’s response and is now carefully considering the points made before deciding whether any further representations are required.

As with many aspects of Treaty implementation, the proposed residency framework has significant implications for Gibraltar’s business community. The Federation says it remains committed to working collaboratively with the Government to help develop a residency framework that protects Gibraltar’s public services while ensuring the jurisdiction remains an attractive place to live, work, invest and establish businesses.

Members wishing to read the Federation’s original representations can access the full submission through the GFSB.