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receiving such interest from around the world, we don’t have to restrict our geographical
scope at all.
A lack of liquidity has been cited by some markets as a reason for the slowdown in the number
of captives being signed up. how has the global financial crisis affected your development?
given that the dIFC is new on the scene as a captive domicile, it has significant scope
for growth. The only way for us to go is up. The current financial crisis may even assist the
growth of captives in some cases. In these uncertain times, many companies are looking to
take control over areas of their business in order to ensure that they will ride out the current
economic storm.
In a lot of cases, this includes restructuring in order to stabilise operational costs and to
streamline business processes.
A captive can fit perfectly into this strategy, as its introduction consolidates and enhances
internal risk management processes. It can also provide a vehicle to finance retained risk in
a structured manner, minimising the cost and maximising the efficiency of an organisation’s
insurance programme. In addition, a captive allows organisations to take control of claims,
and to encourage and reward good risk management. All of these factors will help to maximise
profit margins at a time when corporations are under pressure.
how established are the infrastructure, regulatory environment
and critical support necessary for major global companies to
operate regional captive programmes?
Many global organisations that have been successfully servicing the global captive
insurance industry for many years have established a presence in the dIFC. These
organisations represent the key disciplines required to support captive operations, including
managers, reinsurers, actuaries and auditors. The regulatory environment that the dFSA
has put in place is based on industry best practice and is world-class. These factors have
created a professional and experienced infrastructure that should allow the captive industry
to flourish here.
Finally, what financial incentives does the DIFC offer captives?
The dIFC offers a whole host of financial incentives for captive insurance companies.
Taxes on insurance premiums and on the profits of captive insurers are set to zero.
The parent company’s premium payments can be transferred to the captive, whose
profits can be fully retained or repatriated. Firms benefit from an extensive tax treaty
network for UAE-incorporated entities. Firms established in the dIFC can also have
100 percent ownership.
by locating within the dIFC, captive insurance companies have easy access to the professional


service providers necessary for them to operate efficiently. The dIFC is home to several such
service providers, including auditors, law firms and actuaries.
Furthermore, by virtue of being located in dubai, the dIFC gives access to a large pool of
skilled, multilingual professionals living in the region. Also, dubai provides a world-class urban
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September 2009 | INTELLIGENT INSURER | 41
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