Filed Under:Risk Management, Captives

Increasing Number of Captives Opt to Domicile on U.S. Soil

Favorable establishment conditions, interstate competition, federal legislation spur an uptick in domestic captives

The recent growth spurt among captives opting to domicile domestically can be attributed to lower establishment costs, more streamlined capitalization requirements and state governments offering increasingly creative incentives.

Another factor: more location options. The Captive Insurance Companies Association (CICA) reports that Florida and New Jersey will be the newest states open for business, effective this July.

“One of the issues driving the captives market right now is that you don’t have to be a salesman to sell the concept [to companies],” he continues. “And all the states now recognize that it’s a great source of revenue, and they can make money off of captives through fees and premium taxes.”

For his part, Koritzinsky identifies a couple of reasons why the practice of domiciling in the U.S. is gaining popularity. “Firstly, income-tax rules for captives owned by U.S. companies are largely the same now whether onshore or offshore.

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