A burgeoning competition has arisen between rival Mediterranean offshore QROPS destinations with Gibraltar and Malta battling it out for supremacy.
Both of the offshore finance jurisdictions have been mainstays in the offshore pension market for many years with each vying for the attentions and personal wealth of expats around the world.
After the clampdown by the HMRC on Channel Island jurisdictions the two Mediterranean territories became the choice destinations for expats looking for a tax efficient environment with QROPS being a popular option.
Since then there has been a marked increase of firms self certifying QROPS products.
Jim Atkins notes that “both Malta and Gibraltar are aiming for footholds in different markets. Malta may have a 30% withholding tax on QROPS benefits for retirement savers who live off the island in a country that does not have a double taxation treaty with the local tax authority.
“This wipes out many Asia Pacific countries by increasing the tax risk for investors. On the other hand, Gibraltar has no withholding tax and offers a low 2.5% income tax rate on pension benefits, which is proving attractive to many would-be investors from the Middle East and Asia Pacific.”
Steven Knight chairman of Gibraltar’s Association of Pension Fund Administrators said, “In 2009 when Gibraltar took the decision to self-impose a QROPS ban, it was perhaps not seen by everyone as a good decision
“However, pensions are long term and I think people realise it was the best thing to have done and this strategy of taking our time and getting it right is beginning to pay dividends.”