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An offshore insurance company, usually referred to as a 'captive' insurance company, is usually a subsidiary of a large company or group of companies, and its purpose is to offer insurance within the parent company or group, thus saving external costs and generating profits in a low-tax jurisdiction. The fiscal benefits are not necessarily the driving factor, but they can be significant. Direct access to reinsurance is another important advantage of a captive.

Some high-tax countries have legislated to prevent excessive shifting of income to captives, but usually without seriously reducing fiscal benefits. Apart from offering tax savings, it is usually also true that an International Offshore Financial Centre (IOFC) offers a less regulated and bureaucratic supervisory insurance regime than the home country of the parent company. The captive may for instance be able to employ its capital more effectively than a domestic insurance company.

The considerable advantages of captives have led to the development of a major world-wide captives industry, and IOFCs have vied with each other to establish attractive regimes for captives.

The jurisdictions which have been most successful at attracting captives are as follows:

British Virgin Islands 
Cayman Islands 
Isle of Man 

Some other jurisdictions also have captive insurance regimes:

Hong Kong 
Netherlands Antilles

In the Lowtax.net jurisdictions section, information is given about the financial sector for each of the following jurisdictions:

AndorraAnguillaArubaBahamasBarbadosBelizeBermuda,British Virgin IslandsCayman IslandsCook IslandsCosta Rica,CyprusDubaiGibraltarGrenadaGuernseyHong KongIreland,Isle of ManJerseyLabuanLiechtensteinLuxembourgMadeira,MaltaMauritiusMonacoThe Netherlands AntillesPanama,SeychellesSwitzerlandTurks & Caicos Islands and Vanuatu.