Gibraltar’s Transformation: Historic EU Agreement and Tech Investment Signal New Economic Era
Historic EU Agreement Marks New Chapter
On June 11, 2025, Gibraltar reached a landmark political agreement with the European Union, marking a significant milestone in post-Brexit negotiations. The deal preserves UK sovereignty while ensuring continued economic stability and Gibraltar’s access to the Schengen area.
Under the new arrangement, Gibraltar will participate in the Schengen area for free movement, with Spanish border officials conducting entry checks at Gibraltar’s airport and seaport, alongside Gibraltar’s own border agents. UK nationals visiting Gibraltar who are not resident will be subject to the Schengen 90/180-day rule.
Economic Transformation and Tech Investment
In a major development for Gibraltar’s economy, plans have been unveiled for a £1.8 billion data centre, representing the largest single investment project in Gibraltar’s history. The announcement was made by Chief Minister Fabian Picardo.
The project, to be developed by Pelagos Data Centres, will span across a 20,000 square metre site near the port, creating 500 construction jobs and 100 permanent positions once operational. This investment comes at a crucial time as demand for data centre capacity across Europe surges due to increased adoption of artificial intelligence across industries.
Strong Economic Performance
Gibraltar’s economy has shown remarkable resilience, with a 2024/2025 surplus of £9.782m, triple the forecast. The territory recorded £474m in income tax receipts, with a striking 37% increase in corporate tax compared to the previous year.
The territory’s employment figures are particularly impressive, with an average of only 20 individuals unemployed throughout the year, dropping to just 16 individuals in June 2025.
Future Outlook
The political agreement now enters the legal drafting and ratification phase, requiring approval from the UK Parliament, Spanish Cortes, EU Council, and European Parliament. This process is expected to take several months, during which transitional arrangements will remain in place. The agreement is expected to improve the business environment for the whole region, with new frameworks for information exchange and mechanisms to promote economic and social development between both sides.
