The mayor of the Spanish town of La Linea, Juan Franco, has asked for a special tax regime for the region to attract insurance companies that are forced to leave Gibraltar because of a hard Brexit.
La Linea’s close proximity to Gibraltar makes it an ideal solution for companies based in the British overseas territory seeking to retain both EU passporting rights and their Gibraltar infrastructure following a hard Brexit.
A hard Brexit or no-deal scenario, which would result in the UK and Gibraltar crashing out of the EU, is becoming increasingly more likely as the 29 March 2019 deadline approaches.
According to Spanish news site EuropaSur, Franco has proposed a reduced company tax exclusively for La Linea-based insurance and online gambling companies to help attract insurance business leaving Gibraltar in that eventuality.
Franco suggested that the two economies, Gibraltar and La Linea, could work in a complementary system, an idea that has long been championed by Nigel Feetham, partner at Hassans International Law Firm.
La Linea emerges as post-Brexit solution
Feetham commented: “The options in a hard Brexit (where EU business is forced to leave) for Gibraltar insurance companies is principally Malta.”
“Towards the end of last year, I had a eureka moment. Travel between Malta and Gibraltar wasn’t easy.”
He continued: “Why not La Linea, keeping employment in the area and plugged into the existing infrastructure in Gibraltar?”
“In this scenario, Gibraltar and La Linea would not be in competition with each other; instead they would complement each other.”
“The Spanish Government has recently granted a special tax regime to Ceuta and Melilla for the gaming companies so why not La Linea?”
“Certainly the Spanish Government appears to be listening and genuinely interested in supporting the Campo de Gibraltar which can only be good for everyone, including Gibraltar.”