General Information
An offshore captive insurance is a company which belongs to non residents dealing with business activity out of Cyprus. Captive Insurance are daughter enterprises, belonging to non - insurance companies - establishers or branches opened for taking part in risks of companies.
Captive Insurance may be opened by associations of companies or natural persons, united by common interest of insurance of a such group’s inner risks.
Risks included in the notion ‘’captive insurance’’ may be the same as in usual insurance, but difficult or expensive to insure them.
Captive Insurance Law
Captive insurance company is established and regulated by the Captive Insurance Law because it insures the inner risks. The main official inspector of its activity is the Manager of Insurance Department of the Ministry of Finance.
Captive Insurance Law consists of strict rules about minimal capital payability limits, insurance prize, reports, statistics, etc. But the Ministers Council of Republic has the right to let any company registered in Cyprus be free of this Law, if the inner structure and functioning of the company need additional conditions or special status. Such company will be regulated by the Central Bank of Cyprus and by Insurance Department Manager.
Demands to offshore "captive insurance" companies
The Government usually has the following demands for offshore "captive insurance" companies:
In addition to the above, the offshore captive insurance companies must follow the rules written for ordinary offshore companies.
Privileges of offshore captive insurance companies in Cyprus
Captive insurance companies have the same privileges as ordinary off-shore companies. A brief list of the privileges for "captive insurance" companies is given below.
Rules:
The Council of Ministers has a right to exclude captive insurance companies from the rules of the Law on insurance companies. Among those exclusions can be mentioned the following:
Taxes:
Offshore captive insurance companies have the same tax privileges as ordinary offshore companies, to be exact decrease of the income tax to 4.25%.
Currency Control:
Offshore captive insurance companies as well as other offshore organizations are not subjects of currency control.
Registration