Shanghai Free Trade Zone Welcomes First Captive
by Lorys Charalambous, Lowtax.net, Cyprus
23 February, 2017
China COSCO Shipping Group, a Chinese state-owned shipping company, has founded a captive insurance company in the Shanghai Pilot Free Trade Zone.
This is the first captive insurer to be domiciled in the Zone, and the third self-insurance firm in China. The first two were set up by PetroChina and China Railway Corporation.
The use of captive insurers in China to self-insure risk, rather than using third-party insurance companies, follows approval of the practice by the China Insurance Regulatory Commission in December 2013. About seven percent of Fortune 500 companies self-insure in this way.
The Shanghai Pilot Free Trade Zone was created in 2013 and offers companies a number of tax preferences. It comprises a bonded area, high-tech park, financial area, and an export processing zone.
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