Offshore companies and individuals operating in the Cayman Islands need to pay taxes in their home countries. However, the transactions conducted by them within the Cayman Islands are not subject to taxation. CIMA’s (Cayman Islands Monetary Authority) statistics will shed light on why this Caribbean island offers a fertile business environment for Cayman Captive Insurance.
1.Almost 11,000 mutual funds have been registered in the Cayman Islands with combined assets of USD 7 trillion.
2.Investors from 107 countries own at least 10% of funds domiciled in the Cayman Islands.
In addition to the above, the total number of companies falling under the B, C, and D categories reached 770 in 2021. Out of these total companies, the two major categories were pure captives and group natives, numbering 279 and 125.
20% of the total companies falling under the B, C, and D categories of insurance companies were established as segregated portfolio companies, consisting of over 6,000 segregated portfolios.
No wonder the Cayman Islands is the second largest domicile worldwide for captive insurance. Simultaneously, it is also the foremost domicile for health insurance captives. Do you know that 657 international insurance companies in the Cayman Islands manage over $64 billion of total assets plus $17.5 billion in total premiums?
What kind of support does the Cayman Islands extend towards captive insurance companies with relevant tax reporting?
As mentioned above, Cayman Island’s environment is conducive for business and finance-related activities. Hence, you have numerous companies providing Cayman Corporate Services out there. These companies possess the required captive-specific knowledge and enable captives to comply with tax-reporting requirements.
Depending on the nature of your business, companies may require corporate service providers or tax advisors. The primary responsibility of these tax advisors is to file tax returns on behalf of their captive clients. Tax advisors get a clear understanding of their captive clients’ financial performance/standing by analysing their financial statements drafted by the company’s insurance manager and thoroughly audited by its auditors.
Benefits of choosing the Cayman Islands as a domicile for a captive insurance company
Benefits of choosing Cayman as a domicile to set up a captive insurance company.
1. Political stability and robust economic system
2. Powerful insurance regulatory environment
3. Second largest captive insurance domicile in the world
4. Treasure trove of knowledge related to captive insurance
5. Large pool of talent including captive managers, law firms, insurance managers, auditors, actuaries, bankers, lawyers, investment managers, etc.
Be it cedant insurers, reinsurer carriers, and global industry service providers, including reinsurance brokers, reinsurance consultants, lawyers, banks, financial institutions, investment bankers, investment managers, and others have strong industry connections plus a detailed understanding of the local Cayman laws & regulations.
The Cayman Islands is a preferred domicile for healthcare captives, group captives, managing general underwriters, managing general agents, etc. What is the reason? The cross-disciplinary expertise ranging from property, marine, liability, and ART (alternative risk transfer) gives them the cutting edge to carry out their activities.
Due to such favourable measures, the Cayman Islands stands out from other offshore domiciles. It offers unique advantages of dynamic, consistent, and well-established regulation that has played a pivotal role in attracting premium business worldwide.
