History & Constitution
Gibraltar has been a crown colony of the United Kingdom since 1713 and the British Government, which appoints a Governor of Gibraltar, retains the responsibility for defence and international affairs.
Gibraltar is a member of the European Union through its association with the United Kingdom but not a member of the Customs Union with notably Value Added Tax not extending to Gibraltar.

Gibraltar law is based on ordinances passed by the House of Assembly and follows Common Law principles. Because of its common law basis, Gibraltar recognises all types of Trusts.

Financial Services Regulation
Gibraltar passed the Financial Services Ordinance and Financial Services Commission Ordinance in 1989. The affect of these ordinances was twofold, firstly to require all businesses carrying on financial services to register and secondly to establish a commission to police them.
The functions of the commission are broadly to keep under review the operation of Gibraltar legislation and the effectiveness of supervision of financial services; to monitor the extent to which the legislation complies with EU obligations and supervisory standards in the UK; to protect the public against financial loss arising out of dishonesty, incompetence or malpractice. The Financial Services Commission supervises and regulates the traditional areas of Banking, Insurance and Investment Business, and certain controlled activities such as company management, professional trusteeship and insurance broking.
Unlike any other Offshore Centre (and particularly all those within the UK's influence), Gibraltar's supervisory activities are subject to regular review by the UK Authorities. The FSC's own founding Ordinance prescribes this. The UK is thus able to ensure that the regulatory legislation and standards of supervision in Gibraltar match those in the UK itself.