Malta Increasing In Popularity As European Captive Insurance Domicile

by Robert Lee, Tax-News.com, London

27 July 2005

Malta has positioned itself on the map as a European captive insurance domicile after Marsh, the world's largest insurance broker, formally opened a captive insurance management company on the island last week.

According to John Copeland, a director of Marsh Management Services Malta Ltd, the Mediterranean jurisdiction will soon rival Dublin and Luxembourg, traditionally the domicile of choice for European captives, not least because of its recent accession to the European Union.

"While regulations are similar across the EU, Malta has an advantage in that it is going out to attract captives, its costs are lower than the other European domiciles and there is an enthusiastic and well-educated workforce that will soon pick up the skills required of captive insurance," Mr Copeland stated, according to a report in the Times of Malta.

A captive insurance company is a wholly owned legal entity established by an individual or an industrial, financial, commercial or governmental organization or organizations to underwrite all, or a selection of, the risks of that organization and its affiliates. Such captive insurers are usually domiciled in a specialized location, and may be either onshore or offshore.

Currently, Marsh manages approximately 1,100 captives through the resources of its offices located in all the major captive domiciles, including Barbados, Bermuda, British Columbia, the Cayman Islands, Colorado, Dublin, Guernsey, Hawaii, Isle of Man, Luxembourg, Maine, New York, New Zealand, Singapore, South Carolina, Switzerland, The United States Virgin Islands, and Vermont.

While the number of captives in Malta is still small, Aon, Marsh's main rival, has already opened a captive insurance management office in Malta, while several local companies also offer captive services.

Mr Copeland also observed that the increasing presence of the captive insurance sector will also bring more business the way of audit firms, banks and law firms stationed in Malta.

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