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Nevis captive insurance company for family offices
From the 1920s, companies all over
the world created their own insurance companies. Nevertheless, the company that
made it famous was a US mining company in the 50s that incorporated their
insurance subsidiaries that offered their services exclusively to captive mine
operations (hence, the name).
Today, they are located in more
than 50 jurisdictions, but, as we said, they are not generally among the
options family offices consider first.
Nevertheless, we believe that's a
wrong impression. When you're establishing a family office, you need to
prioritize long-term, intergenerational, risk management strategies. You're
thinking about protecting your wealth for your children, your grandchildren,
your greatgrandchildren, and beyond.
And that's not only the case if you're
an ultra-high net worth individual establishing a family office in a top
destination such as Singapore or Lichtenstein. It's also possible and
recommendable to obtain captive insurance for a mid-level Belizean family
office. A baby family office that has started to grow and to diversify its
assets should consider the possibility, at least in the long-term.
A Nevis captive insurance company
is an amazing option for American family offices for asset protection purposes.
We work with top tax attorneys and CPAs to offer tailor-made solutions in tax
planning and optimization. But insurance is an ideal option because insurance
isn't generally considered income. Thus, the company can invest in offshore
assets without taxation.
And one of the best options we can
offer is the Nevis captive insurance.
Nevis offers incredible captive
insurance possibilities, such as:
- The
best prices in the captive insurance markets
- Local
banks and local directors are not required
- Competitive
minimum capital requirements
- Quick
approval timeframe
- Fantastic
tax system
- Possibility
to access Nevis' CBI program
- Common
law system that offers incredibly beneficial legislation for family offices
- The
best trust jurisdiction on the planet
About Nevis
Nevis is the smaller island from
St. Kitts and Nevis, and it offers all the wonders you'd expect from an
English-speaking Caribbean island: idyllic beaches, relaxed lifestyle, low
taxes, and fantastic offshore services.
The island is one of the pioneers
of offshore services as it is generally considered the best trust provider on
the planet and a top offshore banking destination.
And, of course, you have beaches
within walking distance from pretty much every part of the island, which is
almost another requirement for offshore jurisdictions.
On the business side, Nevis is an
incredibly stable economy. Its currency, the Eastern Caribbean dollar, is
pegged to the American Dollar at a 1 USD: 2.68 ECD rate. Its regulatory
environment is incredibly friendly yet solid. It boasts robust AML legislation
while allowing for sophisticate offshore services. The island also has the
lowest licensing and government fees in the Caribbean.
And among those fantastic services,
the island offers terrific captive insurance possibilities for family offices.
Captive insurance
in Nevis
Captive insurance is a fantastic
asset protection vehicle for family offices. Nevis captive insurances pay no
taxes in Nevis, pay small government and licensing fees, and have only a few
requirements, such as a resident manager or registered agent, to comply with a
minimum physical presence.
In simple terms, what are the main
benefits of establishing a captive insurance company in Nevis?
- It
is a cost-saving structure if the family office is paying too much with
commercial insurers and gives you access to low-cost reinsurance.
- You
can insure all risks within the scope of your risk management needs.
- Risks
that commercial insurers won't insure can be insured.
- Depending
on the tax laws of the family office business domicile, some premiums may get
tax-favored treatment.
- You'll
obtain an efficient administration of your claims.
- You
can create a well-defined underwriting approach of the captive.
- You
can control the ways premiums are invested.
- You
can retain underwriting profit as dividends paid to the captive owner.
- Control
investments and premiums until paid out as losses or dividends.
- Flexibility
as it allows for cost-conscious risk transfer.
- Good
degree of insulation from the swings of the insurance market cycles.
Now, what does a captive insurance
company specifically do? Simple. It's an
insurance company where the owners and the customers are pretty much the same.
It is used to write all or a part of the risks of a company and its beneficiaries.
They usually are subsidiary companies of the parent company and also can be
used to write third-party risks.
Let's use a basic example. A $2
million premium spent for a portfolio of 20 properties valued at $500k each won't
cover the overall exposure. Thus, the captive will purchase reinsurance
protection to cover the risk. The reinsurance increases the captive's, and,
therefore, its parent company, underwriting capacity.
PLCs, private companies, and such
are the main users of captive insurances. Still, it's a good option for high
net worth individuals and family offices as they may have property assets such
as real estate, cars, yachts, sculptures, among others that require insurance
protection.
Moreover, structuring your captive
to be owned by a Nevis trust provides rock-solid protection and
intergenerational wealth planning.
The island has aimed at
establishing an attractive captive insurance regime for small family offices,
offering low fees, attractive tax terms, and minimum requirements.
For example, the regular license
fee is $3,000 for the year of registration, and then a renewal fee of also
$3,000 for each year. Nevertheless, a small captive insurance company pays an
initial licensing fee of $800, and then a renewal fee of $800 per year.
What's the difference between them?
Simple. A small captive insurance company has annual net written premiums or
direct written premiums of less than $1.5 million.
There are three main types of
captive insurance company:
- Pure:
it insures the risk of its parent, affiliated, and controlled companies. Its
minimum unimpaired capital is $225k if it's a regular captive insurance
company, and $20k if it's a small company.
- Association:
it insures the risk of member organizations and their affiliated company. Its
minimum unimpaired capital is $300k if regular, and $25k if small.
- Group:
it insures the risk of its parent, owners, and unaffiliated persons, but the
risks of unaffiliated cannot be more than 1/3rd. Its minimum
unimpaired capital is $400k if regular, and $30k if small.
Requirements and
process to establish a captive insurance company
These are the main regulatory
features to consider:
- All
insurers must have a registered agent or an insurance manager. An insurance
manager may be a non-resident but must also appoint a registered agent.
- Cash,
debt titles, precious metals, letters of credit, equities, premiums and
reinsurance receivables, loans, and mutual funds are considered allowable
assets. Nevertheless, an insurer can hold different assets, with prior authorization
of the Registrar of International Insurance.
- Insurers
that hold a general, long-term, or reinsurance license must submit annual
audited accounts. Insurers that hold captive, allied reinsurance, or allied
insurance license must submit financial statements and tax returns in the
format accepted by the authority in their country of origin. The Registrar may
ask for audited financial records.
- Insurance
managers and registered agents cannot be shareholders, directors, officers, or
employees of insurers for which they're providing management or registered
agent services.
What are the requirements you must
comply with when applying for a captive insurance license in Nevis?
- Two
directors or managers;
- Certified
copy of the organizational documents;
- Statement
of president and secretary showing its sound financial condition;
- Description
of activities including three-year business plan;
- Due
diligence information of all beneficial owners, directors, and shareholders
- Evidence
of:
- Comparable
liquidity to the risks to be undertaken
- Adequate
expertise of the managers
- Overall
reliability of the operational plan
- Loss
prevention programs
- Minimum
unimpaired capital
Now, what about the general costs
of keeping a captive insurance company in Nevis?
They vary depending on the size of
the captive company, but the annual costs of lawyers, accountants, actuaries,
claim handlers, and managers are about $50k, and the general set up costs,
including feasibility study is around $25k.
Who are we, and
what can we do for you?
In Mundo, we are committed to your
freedom.
One of our main goals is
eliminating the perception that the concept of a family office is available
only for the ultra-rich. That's not the case, and the affordability of a
captive insurance company in Nevis proves it.
Nevis is one of the best
jurisdictions we can offer. We work hand in hand with NTL, which has born 25
years ago, providing trust and passport services in Nevis.
And we work with one of the top
financial service providers in Nevis to offer only the best of the best for
you.
Captive insurance is an incredibly
sophisticated asset protection and risk management vehicle, which means it
needs to be in the right hands.
For a competitive price, we offer
an all-encompassing package that includes:
- Incorporating
and licensing a captive insurance company.
- Tax
advise and filling all pertinent tax declarations for foreign-based captives.
- Assessment
of your business insurance needs.
- Insurance
policy design and preparation.
- Claims
administration.
- Reinsurance
participation.
- Management
of the captive insurance company.
- Complete
accounting services.
- Annual
audits.
- Assistance
with bank and investment account establishments.
- US
federal income tax return preparation and filing for your captive insurance
company.
A captive insurance company is one
of the best risk diversification strategies for a family office, and creating
one in Nevis makes it even better.
What are you waiting for? Contact
us right now and establish a captive insurance company in Nevis!
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