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DUBLIN, Ireland-The regulatory environment in Dublin is stable, and captive formation requirements have not changed in the past year.
Regulation is ultimately governed by European Union insurance directives that have been incorporated into Irish law.
Captives are eligible for a 10% corporation tax if they are located in the International Financial Services Centre in the Custom House area of the city. Neither regulators nor captive managers think the 10% rate will last beyond 2005, when it is set to expire. New companies can be licensed under the 10% rate through the end of the year 2000.
Captives in Dublin also must commit to employing a certain number of people. The Industrial Development Agency of Ireland, a government body responsible for marketing the IFSC, determines the required number of employees for each captive.
Establishing a reinsurance captive typically takes less than two months. Once the company has been incorporated, it applies to the IDA and Certification Advisory Committee for a 10% tax certificate. Approval for the certificate comes from the CAC, at which point the company can begin doing business.
The application fee is 4,000 Irish punts ($6,318), with an additional 142 punts ($224) payable on registration, and all companies must pay the standard capital duty of 1% of paid-up share capital. All captives must have a registered office, and direct-writing captives are required to have an authorized insurance manager.
Minimum capitalization levels of 500,000 punts ($789,750) apply only to direct-writing captives, while reinsurance captives meet a 100,000-punt ($158,000) mark.
Direct-writing captives are required to fulfill all the regulatory criteria demanded of insurers, including filing annual accounts and quarterly returns with the Department of Enterprise and Employment.
Solvency requirements are the standard E.U. criteria of 18% of gross premiums or three years' claims experience.
Ireland has more than 30 double-taxation treaties either in place or being negotiated with countries around the world, including the United States.
For more information, contact the Financial Services Division, IDA Ireland, Wilton Park House, Wilton Place, Dublin 2, Ireland; 353-1-603-4000; fax: 353-1-603-4040; or the Department of Enterprise and Employment, Frederick Building, Setanta Center, S. Frederick St., Dublin 2, Ireland; 353-1-661-4444; fax: 353-1-679-5710.