Global accounting firm EY, which changed its brand name from Ernst & Young earlier this year, is returning to Gibraltar following a deal with accountancy firm Baker Tilly Gibraltar, subject to approval from Gibraltar's Financial Services Commission.

EY said in a statement that five directors from Baker Tilly Gibraltar, together with their assurance and tax services personnel, will transfer their services to EY. The new organisation will be led by Jose Julio Pisharello, who is currently chairman at Baker Tilly Gibraltar, and will commence trading in September.

The move back to the small territory on the southwest tip of Spain comes at a time when the UK - to which Gibraltar has been attached as a jurisdiction since the early 18th century - has been at the centre of an acrimonious diplomatic row between Spain and the UK.

EY said its operation in Gibraltar will provide audit, accountancy, tax and general business consultancy services to firms based in Gibraltar, with teams specialised in the financial services and gaming industries.

“Gibraltar is becoming an important and growing market for insurance, asset management, private banking and gaming. Having a presence in Gibraltar will allow us to better serve our existing clients as well as provide opportunities for collaboration within our financial services business globally, especially the Americas," said Andy Baldwin, EY’s head of financial services, for Europe, the Middle East, India and Africa.

In an effort to promote the financial sector of Gibraltar, the government recently appointed two senior executives in newly-created roles to help develop the Rock's financial services sector, effective 2 September 2013.

Victor Galliano will be based at Gibraltar House in London and will be responsible for promotion of Gibraltar in the UK financial services industry, while Philip Canessa will be based in Gibraltar, working on the promotion of funds and investment services.

In other recent news, online betting firms based in the British territory, which avoid paying UK taxes by basing themselves offshore, are facing a tax levy that could cost the industry £300 million ($468 million), under new rules unveiled by the British government earlier this month. For more on this story, click here.