The Rock of Gibraltar has an area of two and a quarter square miles and is connected by a narrow isthmus to the southern coast of Spain. It has a population of approximately 30,000, of which 20,000 are Gibraltarian. The people are mainly of Italian, Genoese and Maltese descent, and are bilingual in English and Spanish. There is a small but significant Jewish population, a section of Indian traders and latterly a large influx of Moroccan workers. The official language is English and the official currency the pound Sterling, with both UK and Gibraltar coinage in circulation.

Gibraltar is a British Crown Colony and has been so since 1704. The Constitution gives legislative powers to the Governor, who is the Queen's representative, and the House of Assembly. It is a dependent territory, responsibility for which lies with the British Government. It enjoys considerable self-government, although the formal assent of the Governor is required for all legislation. The British Foreign Office is directly responsible for Gibraltar's foreign affairs, defence and security matters, whilst the Ministers, who are answerable to the House of Assembly, deal with domestic matters.

The British Government has given an assurance to the people of Gibraltar in the preamble to the Gibraltar Constitution, that Gibraltar will remain part of Her Majesty's dominions until and unless an Act of Parliament otherwise provides, and that Her Majesty's Government will never enter into arrangements under which the people of Gibraltar would pass under the sovereignty of another state against their freely and democratically expressed wishes.

The people of Gibraltar go to the polls at least every four years to elect the House of Assembly, where the majority party forms the Government. Each eligible Gibraltarian has eight votes for a House of 15 elected members. The full opening of the frontier with Spain in February 1985 has led to an increase in tourism and investment, and with the election to government in May 1996 of the Gibraltar Social Democrats, there has been a renewed commitment to the expansion of the economy in many areas, particularly in the promotion of Gibraltar as a financial centre.

Gibraltar has its own legal system, similar to that of the United Kingdom and based on English Common Law but with its own statutes, termed Ordinances, which are passed by the House of Assembly.

Gibraltar became an associate member of the EEC when the UK joined in 1973 and is included for all matters except Value Added Tax, the Customs Union and the Common Agricultural Policy. It is ideally situated geographically for international trading activities, and offers the benefit of a bilingual professional community which often acts as a very effective bridge between Anglo-Saxon speaking countries and Spain, which is itself acquiring a much greater importance following its entry into the EEC.

The main attraction of Gibraltar as a financial centre is that its Exempt Companies can be managed and controlled from within Gibraltar. This contrasts with the position in other territories, particularly the Channel Islands and the Isle of Man where Corporation Tax and Non-resident Companies respectively have to be managed and controlled outside the territory. Also, Gibraltar is not party to any double taxation agreement. There is therefore no exchange of information with any other fiscal authority.

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