|
|
 |
| |
Offshore insurance companies
Insurance companies of the offshore type belong, together
with offshore bank and trust companies among the most up-to-date tools in the
field of tax planning and tax optimisation. Like offshore banks insurance companies formed
in offshore jurisdictions also enjoy the liberal environment of the offshore system
and legislation.
There exists a number of types of offshore insurance licenses,
beginning with the full international license, through a number of limited licenses
to a license for additional insurance or underwriter or insurance broker licenses.
Every jurisdiction has its own laws and classes of individual licenses which
offer some of the below listed forms of licenses.
- General Unrestricted Offshore License
This is a full international offshore insurance license,
which usually does not have any restriction of activities, which means that
on the basis of this license it is possible to insure, secure insurance or reinsure
without limitation, including providing life policies or policies for other
insurance companies from offshore or onshore jurisdictions.
- Restricted Offshore License
Basically this concerns a full international insurance
license which, however, has specific restrictions, such as an upper limit for
the maximum amount of insurance policies, not providing life policies, foreign
exchange restrictions, etc.
- Restricted In-house License
The Restricted In-house License is a license which enables
its holders to provide insurance services exclusively to a group of natural
persons or legal entities who are the subject matter of the license or to the
proprietor of the insurance company. This type of insurance company is intensively
used by international holdings, banks, insurance companies and tax optimisation
funds. The most frequented seat of these insurance companies are the Bermuda
Islands, where at present about 3,000 internal insurance companies are registered,
which administer insurance policies amounting to several billions of USD.
- Re-Insurance License
This is a company, which itself cannot insure but which
can only accept an insurance policy and subsequently secure it at another commercial
onshore or offshore insurance company, often at a wholesale price. The home
country of the re-insurance companies is the Caribbean island Nevis, where you
can get a re-insurance company at a price about USD 2,000. A re-insurance company
is an extremely excellent tool for tax planning intended de facto for any business,
consulting or investment company.
Another chapter could be formed by licensed underwriters,
brokers or trustees who can get licenses for international offshore activities
in a number of offshore jurisdictions for international offshore activities
at relatively advantageous conditions.
A major part of the insurance companies of the Offshore type, like ordinary
business offshore companies, are not subject to taxation of their profits, but
they often pay a certain type of lump-sum tax only or appropriate license fees.
These fees are an important aspect while deciding about the extension of a license
or its cancellation on the part of authorities.
The main characteristics of offshore insurance licenses can be defined as follows:
Low interventions on the part of authorities and institutions
Lower capital requirements than in the case of other jurisdictions
Tax aspects, they are often exempted from all forms of direct taxes
Tax on profits are replaced with lump-sum taxes
Low establishment fees
Low license fees
Liberal requirements connected with the operation of the insurance company
Offshore insurance companies are often not subject to foreign exchange restrictions
Licenses are easily available in a number of offshore jurisdictions
In a number of countries no obligation of capital adequacy maintenance
Possibility of concluding all types of insurance policies, including life
policies
Offshore insurance companies can be used for two
basic types of activities:
- for proper insurance, security, reinsurance or other similar activities
- for tax planning purposes
Using an offshore insurance company for insurance
activities
Many offshore insurance companies provide their clients
with insurance services which can include various types of insurance coverage
of a high risk - for example against events of negligence and misuse of official
authority, corporate liability, against a possible strike as well as insurance
of other risks which would be very expensive if agreed upon with ordinary onshore
insurance companies. The ability of make profits of providing these services
depends to a significant extent on competition on the market and on the price
of the insurance policy when purchased from standard providers in an onshore
jurisdiction.
Indeed, insurance business activities have become a highly
profitable matter for many private international offshore insurance companies,
and it is no exception that an offshore branch office of an insurance company
is more profitable than its parent onshore company. Since in many cases the
onshore insurers charged an unbelievable premium - or refused to conclude an
insurance policy at all - the parties which were exposed to a high risk did
not have any other possibility but contacting offshore institutions which were
glad to meet their requirements, often even with a discount. Some of them only
contacted the renowned foreign insurance companies which were willing to take
over the coverage of the risks at more acceptable premium than onshore insurance
companies. Other, mostly professional groups, holdings or individuals with common
risks tended to establish co-operation insurance pools, operating either in
offshore locations or in such states as Vermont (USA) or Colorado(also USA),
which had more tolerating insurance regulations, and which in turn provided
insurance to all members of the interest group.
Use of an offshore insurance company for tax planning
purposes
An offshore insurance company may help the international
insurance community not only in the field of tax planning, asset protection,
but also for the purpose of increasing image and goodwill of the group (or holding),
which thus can declare ownership of an insurance company and its capitals strength.
Who can use an insurance company for tax planning purposes? It is possible to
state that almost anyone whose business activity nature is of such a type that
this legal entity can be made use of. The ownership of an offshore company brings
several basic advantages. The first advantage is a simple fact that this company
provides a certain type of insurance at all. Conservative insurers continue
to consider many companies and transactions to be too risky and they simply
refuse to provide a standard insurance, or if one manages to persuade them to
make an insurance policy quotation, they require such restrictive conditions
that it is virtually impossible to conclude it. That is why a company which
needs to conclude an non-conventional insurance policy before starting a new
project can get into a situation that it will have to leave its plans due to
the impossibility of finding an insurance (reinsurance) coverage. But an insurance
policy provided by an International Captive Insurance Company, for which it
is possible to find reinsurance more easily on the part of a conventional re-insurer,
can solve similar problems for many firms. In comparison with costs of coverage
provided by domestic insurers, the insurance premium rate at the international
institution will probably be much lower.
Second, there are also tax advantages resulting from the insurance at an international
insurance institution, because the costs charged by an insurance company formed
in this manner can be included into the tax base of the company. In other words
this means that all insurance contracts and policies concluded, for which an
insurance company logically requires remuneration, can reduce the tax base of
the parent company of the investor in an invoiced volume.
Offshore insurance company can conclude coverage
for:
Risks connected with foreign activities
Export, import and all foreign activities
Insurance of persons in foreign countries (for example on business trips)
Insurance against loss from business risks
Risks connected with loans, guarantees, purchase of securities
Risks connected with professional liability
For our qualified clients we establish offshore insurance companies in the following
jurisdictions:
Cyprus, Isle of Man, Bahamas, Cayman Islands, Turks and
Caicos, Anguilla, Antigua, St. Vincent, Grenada, British Virgin Islands, St.
Kitts, Montserrat, St. Lucia, Dominica, Nevis, American Virgin Islands,
Gibraltar, USA, Vanuatu, Cook islands, Samoa, Bermuda, Jersey and many other
jurisdictions.
Offshore insurance companies
are uniquely one of the most up-to-date tools of offshore strategies. Their
use reaches from the providing of proper insurance companies for the general
public to family insurance services which optimises tax burden of a very rich
individual or to the service of cash flow active management at international
firms.
If you have more questions about use of offshore insurance companies please contact us.
|
|
| |
|
