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La Línea calls in its historic debt in face of Brexit

Soraya Fernández

La Linea clamours for special tax regime to cater for Gibraltar-based companies that are looking to relocate due to Brexit.

La Linea clamours for a special tax regime to cater for Gibraltar based companies that are looking to relocate on account of Brexit.

La Línea mayor reveals that the area by the Gibraltar airport and land north of the new hospital are being considered for such purpose. The District General Secretary of the PSOE (Spanish Socialist Workers Party in power in Madrid), sees the old hospital as the ideal location.

There is a unanimous demand for justice to be done to La Linea, for its uniqueness recognised and for the historic debt incurred by the municipality to be be repaid.

This has been the reaction to the news published by Reach- Alcance that at least three major operators in the Gibraltar financial services sector have considered the possibility of establishing and seeking regulatory sanction to set up subsidiaries in La Linea.

Brexit will put an end to access by Gibraltar-based financial services to the European Union, and for this reason some entities are looking to redomicile in one of the remaining 27 Member States for, although Gibraltarian companies will continue to have access to their main markets in the United Kingdom, some have looked at La Linea for the EU aspect of their businesses. Its proximity to the Rock, where their headquarters are set to remain, makes La Linea a more attractive location from a logistic point of view than say, Malta or Luxembourg.

Notwithstanding the uncertainty in this scenario, Brexit does present as a unique opportunity for La Linea.

Mayor Juan Franco explains that his municipal government has been working on this for a long time. “There have been contacts with parties interested in setting up in our city fundamentally to allow for a Gibraltar based operation for activities outside the EU and one in La Linea for EU business”.

He does however recognise that the main obstacles are the tax regimes in other EU territories like Malta or Luxembourg which he descries as “much softer”.

He maintains that his municipal government has been in touch with Spanish regulators such as the General Directorate of Insurance “and we await their responses”.

Ceuta & Melilla

Juan Franco criticises the central government for not having included La Linea within the beneficial tax structures which have been granted to online gaming companies which set up in Ceuta and Melilla.

Moreover he has told REACH-Alcance that the ideal locations to set up business parks would be north of the old hospital and the area next to the Gibraltar airport.

The mayor of San Roque Juan Carlos Ruiz Boix, also welcomes the redomiciliation of companies to La Linea, and recognises that a special tax regime is necessary. “If there is a departure of companies from Gibraltar it will be because of Brexit and not because of competition between kindred towns. And the ideal location is La Linea.”

Boix proposes the old hospital

In his capacity as district secretary general of the PSOE, he maintains that La Linea already has the optimum building for such use, the old Andalucian Health Service hospital; “That building has the size and capacity to be a nursery for on-line gaming and insurance companies, two powerful sectors in Gibraltar which are now in question due to Brexit”.

Historical Debt

La Linea clamours for special tax regime to cater for Gibraltar-based companies that are looking to relocate due to Brexit.

The secretary general of the PSOE in La Linea, Juan Chacon, advocates the need to collaborate with “our kindred people of Gibraltar”.

In the same way as other individuals interviewed he claims for special treatment: “La Linea has a historical debt due to it since the closure of the frontier in 1969. We have to demand a different fiscal status.”

The Partido Popular seeks a Special Plan for La Linea

Juan Pablo Arriaga, president of the PP in La Linea, explains how he has promoted a Bill in Congress for a ‘special plan’ for La Linea. This proposal will be voted on next month and includes a tax regime for La Linea. “Now is the time. If we achieve this we will be ready for whatever comes our way and it won’t be necessary for online gaming companies to go to Ceuta” he says.

Joint development is the aim of the Transfrontier Group

Lionel Chipolina, the President of the Transfrontier Group, which encompasses private enterprise and workers unions on both sides of the frontier, highlights the importance of the domiciliation of businesses to La Linea for what it will represent on both sides.

“It would be proof positive that we can work together which is what we want to achieve. It would be good for La Linea and Gibraltar. We will develop together” he asserts.

Apymell’s suggested best option

Lorenzo Pérez-Periáñez, president of the La Linea Association of Small and Medium Sized Businesses (Apymell in its Spanish acronym) considers the suggestion published in REACH-Alcance as the “most interesting option” and advocates for La Linea a tax regime similar to that of Ceuta and Melilla.

“There is historic debt due to La Linea on account of the poor treatment that it has received, and it must be compensated for the consequences of a hard-Brexit. Our municipality has limited industrial space and certain activities such as financial services do not need large areas. It is time, once and for all, for there to be a political drive to help our city and now is the moment” says this businessman.

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