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An offshore insurance company, usually referred to as a 'captive' insurance company, is usually a subsidiary of a large company or group of companies, and its purpose is to offer insurance within the parent company or group, thus saving external costs and generating profits in a low-tax jurisdiction. The fiscal benefits are not necessarily the driving factor, but they can be significant. Direct access to reinsurance is another important advantage of a captive.
Some high-tax countries have legislated to prevent excessive shifting of income to captives, but usually without seriously reducing fiscal benefits. Apart from offering tax savings, it is usually also true that an International Offshore Financial Centre (IOFC) offers a less regulated and bureaucratic supervisory insurance regime than the home country of the parent company. The captive may for instance be able to employ its capital more effectively than a domestic insurance company.
The considerable advantages of captives have led to the development of a major world-wide captives industry, and IOFCs have vied with each other to establish attractive regimes for captives.
The jurisdictions which have been most successful at attracting captives are as follows:
Bermuda
Some other jurisdictions also have captive insurance regimes:
If you want to know more, please do not hesitate to contact us:
Whatsapp : (852) 6499 4686 Phone : (852) 2186 6936 Email : info@intershores.hk
Disclaimer: Whilst reasonable care has been taken in provision of information above, it does not constitute legal or other professional advice. INTERSHORES does not accept any responsibility, legal or otherwise, for any error omission and accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, readers are advised to take appropriate professional advice before committing themselves to any involvement in jurisdictions, vehicles or practice. |
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