What businesses need to know.

A few weeks ago, we wrote about how the lack of clear residency rules was affecting local businesses. This week, the Government has announced a new residency framework that could significantly change who is able to become a resident of Gibraltar in the future, and on what basis. The stated aim is to ensure that residency is linked to genuine economic contribution, protect public services and provide greater clarity around who qualifies for residency and the benefits that come with it.

For businesses, the proposals could affect recruitment, workforce planning, relocation packages and the wider attractiveness of Gibraltar as a place to live and work. The regulations have not yet been published, but a detailed policy paper provides a strong indication of where Government intends to go.

First things first: who is affected?

The proposed framework will not apply to current holders of Gibraltar identity cards or people who obtained residence before 6 October 2025. Existing residents will remain subject to the rules in force when they became resident.

The new criteria are aimed at future applicants.

The headline change: a minimum earnings threshold

Under the proposals, anyone applying for residence through employment will need:

• A qualifying employment contract
• Suitable accommodation in Gibraltar
• Vetting documentation
• To be aged 55 or under (subject to certain exceptions)

Perhaps the most significant detail for employers is the proposed earnings threshold.

Applicants will generally need to earn at least the equivalent of Gibraltar’s average gross annual salary, currently set at £37,500 per year. The figure would be reviewed annually.

Government does, however, propose a degree of flexibility. The Chief Minister would retain discretion to waive the threshold where particular sectors require workers who are paid below the average earnings figure.

What about younger workers?

The policy also contains a specific provision aimed at younger employees.

For applicants under 30, the salary threshold may be waived provided the employer pays tax and social insurance contributions as though the employee were earning the full average salary level. This appears designed to allow businesses to recruit younger talent while ensuring a minimum contribution into Gibraltar’s public finances.

Accommodation becomes part of the test

Applicants will also need evidence that they have rented or purchased accommodation in Gibraltar.

The property must be the applicant’s primary residence. Short-term and holiday rentals will not qualify, and purchased properties must remain available for the resident’s own use rather than being let out.

One noteworthy change is that future applications from individuals living on vessels will no longer be accepted, although existing permit holders living on vessels will be allowed to continue doing so.

New businesses face additional requirements

The proposals include safeguards aimed at preventing abuse of the system.

Where a business has been operating for less than a year, or where a newly self-employed individual applies for residence, Government proposes requiring a financial deposit equivalent to:

• One year’s employer and employee social insurance contributions
• The income tax that would be payable on the average Gibraltar salary, calculated at 25%

The deposit would be refundable upon cessation of business, and ministers would retain discretion to waive it in certain circumstances.

More scrutiny for businesses

The policy paper also suggests a more interventionist approach to business registration and compliance. When considering whether businesses are sufficiently established, authorities may take account of factors including:

• Job creation
• In-demand skills
• Commercial premises
• Tax compliance history
• Expected economic contribution

Government also proposes monitoring mechanisms that automatically flag salary reductions and ensure businesses remain up to date with tax, social insurance and other regulatory obligations.

A longer road to Gibraltarian Status

Perhaps the most politically significant proposal concerns Gibraltarian Status. Under the current framework, many residents become eligible after ten years.

The new proposal would increase that period to 20 years for anyone becoming resident after 6 October 2025, while existing residents would remain under the current ten-year pathway.

Government argues that long-term access to the full range of public services should follow a sustained period of contribution to Gibraltar’s economy.

What benefits would residents receive?

The policy makes a distinction between residency and Gibraltarian Status. Residents would continue to receive:

• Access to the Group Practice Medical Scheme
• Schooling for their children
• Access to scholarships for dependent children after ten years of continuous lawful residence and contribution

However, residency alone would not provide access to:

• Elderly Residential Services
• Domiciliary Care
• Public or affordable housing
• Government marina berths
• Certain other social benefits

These would remain linked to Gibraltarian Status.

What happens if circumstances change?

Residence permits would be renewed annually. The policy proposes that permits automatically lapse if tax and social insurance payments stop, or eight weeks after an employment relationship ends unless the individual secures alternative qualifying employment.

Government would also retain powers to refuse, suspend or revoke permits on public interest, public health, public security or good-standing grounds.

The business question

The Government’s argument is that the framework protects public services while ensuring that those who benefit from living in Gibraltar also contribute to its economy.

Many employers will welcome greater clarity around residency criteria and the Government’s emphasis on attracting skilled workers and genuine economic activity. At the same time, some sectors may be examining how salary thresholds, accommodation requirements and compliance obligations could affect recruitment in a labour market that is already tight in certain areas.

The regulations are still being drafted, and further details are expected in the coming weeks. But one thing is already clear: Gibraltar’s approach to residency is about to become significantly more structured, with contribution and connection to Gibraltar sitting at the heart of the new system.

You can read HMGoG’s full policy paper here and share your views with the GFSB so we can continue representing the interests of Gibraltar’s business community.