Gibraltar Residence Reform: What Employers Need to Know

The Government of Gibraltar has published proposed criteria for individuals for applying residence in Gibraltar. The proposals are designed to link residence more closely to economic contribution, tax and social insurance compliance, accommodation, and controlled access to public services.

For employers, start-ups, self-employed individuals, HR teams, professionals, and advisers, the proposals are significant. They introduce minimum salary expectations, business compliance requirements, anti-avoidance monitoring, annual renewal obligations, and potential automatic lapse of residence permits following termination of employment.

Individuals considering applying for residence may also wish to read our related article: “Proposed New Residence Criteria in Gibraltar: What Applicants Need to Know.”

Scope and transitional position

The proposed regime does not apply to current Gibraltar Identity Card holders or current Gibraltar residents who obtained residence before 6 October 2025.

Persons resident before 6 October 2025 will remain subject to the regime applicable at that date, including the relevant period for applications for Gibraltarian Status.

However, persons who were in Gibraltar before 6 October 2025 but did not hold a residence card will be subject to the new regime unless there is a good reason for discretion to permit an application under the old regime.

This transitional distinction will be important in assessing employee status, existing workforce arrangements, and future recruitment planning.

Employment-based residence applications

The central route contemplated by the document is employment-based residence.

An applicant must submit an employment contract with the residence application. The contract must provide average gross annual earnings equivalent to Gibraltar’s average gross annual earnings as per the Employment Survey Report.

The figure is currently stated as £37,500, rounded up to the nearest £500, and is to be updated annually by notice in the first Gazette of each financial year.

Employers should note that the salary threshold is not static. Workforce planning, offer letters, and contracts for residence-dependent employees may need to account for annual threshold changes.

Employer eligibility and compliance

The employer must satisfy several conditions. The business must have been trading in or from Gibraltar for at least one year, be fully registered and licensed under the Fair Trading Act or any other relevant regulatory authority, and have all payments and filings up to date.

For business registration and licensing purposes, the CEO of the Department of Business may have regard to factors including:

• the creation of full-time or part-time employment in Gibraltar;

• the provision of in-demand skills required in the jurisdiction;

• the rental of suitable office or commercial space in Gibraltar;

• a positive tax filing history of the applicant; and

• the future generation of economic activity in Gibraltar by the applicant.

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The Government also intends to implement mechanisms to ensure that businesses remain up to date with payments and filings.

For these purposes, “all payments” may include tax liabilities, social insurance contributions, licensing fees, registration fees, and other regulatory payments.

For employers, this means immigration and residence compliance will be closely linked to broader corporate, tax, social insurance, licensing and regulatory compliance.

New businesses and self-employed individuals

The proposals include specific requirements for businesses trading for less than one year and for newly self-employed individuals.

Where the business has traded for less than one year, or the individual is newly self-employed, an advance deposit will be required.

The deposit must cover:

• the total employee and employer social insurance contributions for the first year of employment; and

• the tax payable on the equivalent of average gross annual earnings, taxable at 25%.

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The deposit is to be returned on cessation of business, and the Minister for Business may have discretion to waive the full amount due in certain defined circumstances.

This is likely to be particularly relevant for start-ups, owner-managed businesses, entrepreneurs, and newly self-employed professionals seeking residence.

Minimum salary waiver for younger workers

The proposals contain a limited waiver for applicants under 30. The salary threshold may be waived if the employer pays tax and social insurance contributions as if the employee were earning the average gross annual earnings threshold for that year.

This may provide flexibility for junior employees or trainees, but it shifts the practical burden to the employer through deemed tax and social insurance contributions.

Employers should consider whether they are willing to absorb this additional contribution cost and should ensure employment documentation and payroll arrangements are aligned.

Anti-avoidance measures

The proposals include anti-avoidance measures aimed at preventing reductions in salary after a residence permit has been granted.

Any variation to a contract that reduces the amount paid to the employee is to be automatically flagged, to ensure that the conditions under which the permit was issued continue to be met.

The document states that salary should not be varied downwards without reasonable justification.

This will be an important issue for employers considering salary reductions, changes in hours, restructuring, secondments, unpaid leave, or amendments to employment terms for residence-dependent employees.

Accommodation requirements

Applicants must provide evidence of the rental or purchase of property in Gibraltar.

A rental must be for the applicant’s primary residence, must not be for less than 12 months, and must not be a holiday rental.

Purchased property must not be let during the residence permit period and must be available for the applicant’s exclusive use.

Employers assisting with relocation should ensure that housing arrangements satisfy these criteria, particularly where short-term lets, serviced accommodation, shared accommodation, or corporate housing are contemplated.

Age requirement and discretion

Applicants must provide proof that they are 55 or under.

The Chief Minister may have discretion to permit applicants over 55 where their residence is deemed to be in Gibraltar’s interests.

However, a person over 55 who receives a residence permit would have no entitlement to Elderly Residential Services unless and until they become Gibraltarian, which under the proposed rules would require British Citizenship and 20 years of residence.

This may be relevant for senior hires, founders, investors, consultants, or persons with specialist expertise.

Renewal, employment termination, and lapse risk

Residence permits are to be renewed annually, with the individual required to confirm that all conditions continue to be met.

Failure to disclose accurate and complete information, or failure to notify a material change in circumstances, may result in renewal being refused or the permit being suspended or revoked.

A permit will automatically lapse if tax or social insurance payments are stopped for the individual, unless the employee can show that contributions were deducted from salary but not paid by the employer.

All permits will also lapse automatically eight weeks after a Notice of Termination of Terms of Engagement is filed with the Department of Employment, unless the Director of Immigration and Home Affairs is satisfied that the individual has a new employment contract.

This creates a direct connection between employment status and residence status. Employers should consider internal procedures for affected employees when employment ends or changes.

Benefits and limitations

Residence will provide access to specified healthcare and education-related benefits. These include GPMS benefits for the individual, spouse, and children under 18 or in tertiary education, schooling in Gibraltar for children, and scholarships for dependent children after 10 years of continuous lawful residence and uninterrupted tax and social insurance payments.

However, residence will not provide access to elderly residential care, domiciliary care, public or affordable housing, berths in the Small Boats Marina or other government berthing schemes, or other social benefits.

British Citizens who complete 20 years of residence will be able to obtain Gibraltarian Status and then access all services, including Elderly Residential Services and Domiciliary Care.

Gibraltarian Status implications

The document anticipates the Gibraltarian Status and Immigration (Amendment) Bill 2025, which would increase the residence period required to register for Gibraltarian Status under section 9(f) of the Gibraltarian Status Act to 20 years for individuals applying to become Gibraltarian residents after 6 October 2025.

The document states that applicants applying after 6 October 2025 would become entitled to Gibraltarian Status after contributing to the Gibraltarian economy for 20 years.

Existing persons with a valid Civilian Registration Card or Permit of Residence who were in Gibraltar before 6 October 2025 would only be required to have been in Gibraltar 10 years before applying for Gibraltarian Status.

Fees, penalties, and public interest safeguard

The residence application fee is proposed to increase to £250, with renewal fees set at £100.

Individuals residing in Gibraltar without a residence permit may be fined up to £2,500.

The Government also reserves the right to refuse, suspend, or revoke a residence permit where the individual is not of good standing, including future vetting or arrests, or on public policy, public health, or public security grounds.

Practical implications for employers and advisers

Employers and advisers should consider:

• reviewing offer letters and employment contracts for residence-dependent employees;

• ensuring salary levels meet the current and annually updated threshold;

• checking corporate registration, licensing, tax, social insurance, and regulatory compliance;

• assessing whether start-up or self-employed applicants will trigger deposit requirements;

• documenting any salary or variation contractual amendment carefully;

• ensuring accommodation arrangements satisfy the proposed criteria;

• planning for residence implications on termination of employment; and

• advising employees clearly on the limits of residence-related benefits.

  
  

The proposals represent a material shift towards a compliance-based residence framework in Gibraltar. Businesses recruiting internationally, and individuals relocating for employment or self-employment, should take advice at an early stage to ensure that employment, immigration, tax, social insurance, and accommodation arrangements are aligned.

For individuals and families considering residence in Gibraltar, see our related article: “Proposed New Residence Criteria in Gibraltar: What Applicants Need to Know.”