Some of the financial advantages captives domiciled in Barbados

gain include:

• Flexible capital requirements, thanks to the allowance of deferred acquisition costs as an asset and an attractive solvency requirement for some lines of business. Both of these features lead to better capital efficiency. For general insurance business, capitalization and the margin of solvency are US $125,000 each in the first year. In subsequent years, captives must exceed 20% or more of the previous year's premium to be considered solvent. For long term insurance business, companies must have assets that are greater than liabilities to be considered solvent.

• Attractive terms for Canadian and U.S. captives due to reciprocal tax treaties. Barbados and Canada have a tax treaty that includes a tax-exempt surplus rule, thus exempt profits aren’t taxable to the parent company in Canada. The U.S. and Barbados have permanent establishment wording included in their tax treaty, which also provides advantages.

• Attractive withholding tax features.

• A GAAP tax reporting requirement, the preferred accounting method for many companies, instead of statutory accounting.

• Cheaper labor costs and lower employee turnover, leading to greater managerial efficiency. Towner Management typically has account managers who have worked with our clients for many years.