PKF pro­motes Cap­tives in New York (post Brexit)

PKF Malta, in col­lab­o­ra­tion with Fi­nanceMalta, par­tic­i­pated in an event called New York Cap­tive Own­ers Sum­mit, which took place on 31st Oc­to­ber in New York.

Malta Independent - - BUSINESS & FINANCE - Ge­orge M. Man­gion

Ge­orge M. Man­gion of PKF Malta talks about re­cent de­vel­op­ments in the in­sur­ance mar­ket and next events in line for pro­mot­ing Malta as a domi­cile of choice for Euro­pean Cap­tives in New York, fo­cus­ing on suc­cess of the in­dus­try’s lat­est events and dis­cussing es­sen­tial points across the fi­nan­cial land­scape

This was a se­quel event that took place in an in­no­va­tive, more in­ti­mate set­ting and was spe­cially for­mu­lated to at­tract Amer­ica’s lead­ing cap­tive own­ers, ably hosted by a Bri­tish firm Cap­tive Re­view. It is ev­i­dent that op­por­tu­ni­ties to at­tract in­vest­ment to Malta from the lu­cra­tive US mar­ket are rich but th­ese need to be prop­erly nur­tured. The har­vest is ripe for those who ven­ture forth so it fol­lows that Fi­nanceMalta, which is al­ways on the alert to stim­u­late in­ward in­vest­ment, be­lieved this ini­tia­tive would help Malta in its quest to re­main a com­pelling propo­si­tion for prospec­tive in­vestors seek­ing to es­tab­lish or ex­tend their foot­print in Europe.

The New York Cap­tive Own­ers Sum­mit was a highly ex­clu­sive learn­ing and net­work­ing event that cen­tred on a se­ries of in-depth round­table ses­sions. This event pro­vided in­vestors with all the in­for­ma­tion needed to set up and run a suc­cess­ful cap­tive through one day of in­depth pre­sen­ta­tions, panel de­bates, case stud­ies and round-ta­ble dis­cus­sions. As a closed gather­ing of prospec­tive cap­tive own­ers, there was also plenty of time, space and pri­vacy for net­work­ing with other pro­fes­sion­als who share busi­ness goals and vi­sion, via a se­ries of for­mal and in­for­mal re­cep­tions and ac­tiv­i­ties. One au­gurs that such ini­tia­tives by the pri­vate sec­tor serve as a cat­a­lyst to place Malta on the radar screen when­ever Risk Man­agers are con­cerned.

Post Brexit ques­tions about US sub­sidiaries pon­der­ing on where to move to in Europe are be­com­ing more fre­quent, so the event would at­tract the at­ten­tion of large cap­tive man­agers the likes of AON, JLT Marsh and R&Q. Fur­ther­more, there were in­dus­try ser­vice providers versed in tech­nol­ogy so­lu­tions the likes of Verisk In­sur­ance So­lu­tions, In­tralinks and Rante. Another event was or­gan­ised this year on 29th March, with the sup­port of Fi­nanceMalta, Bee In­sur­ance Man­age­ment and a line of key­note speak­ers, in New York. Again this proved to be an in­no­va­tive event fo­cused on Malta as a domi­cile seek­ing to at­tract US Com­pa­nies to host their Euro­pean Cap­tives. Top­ics in­cluded: how to sur­vive FATCA and CRS, what tax reg­u­la­tions one should look out for when re­lo­cat­ing and fi­nally the ad­van­tages Malta of­fers as a domi­cile which con­tin­ues to strengthen its po­si­tion in Europe as a strong player in the Cap­tive mar­ket. De­vel­oped over a

decade of con­tin­ued build­ing of the coun­try’s fi­nan­cial ser­vices in­fras­truc­ture and le­gal frame­work, this leg­is­la­tion makes the is­land more at­trac­tive for the op­er­a­tion of Cap­tives.

The jewel in the crown is the Pro­tected Cell Com­pa­nies (PCCs). Malta is the only full EU mem­ber state that can of­fer PCCs. It is also the only EU mem­ber state that of­fers the se­cu­ri­ti­sa­tion cell com­pany struc­ture used for as­set-backed fi­nanc­ing or in­sur­ance linked se­cu­ri­ties plat­forms. Un­doubt­edly, the in­sur­ance mar­ket in Europe is ex­pe­ri­enc­ing a dra­matic change in cul­ture, mainly due to the af­ter­math of Sol­vency II and re­cently chal­lenges on pass­port­ing rights which may be for­feited by U.K based Cap­tives as a con­se­quence of the Brexit ne­go­ti­a­tions.

Any in­tro­duc­tion of pro­tec­tive poli­cies that might be in­tro­duced in the US fol­low­ing the elec­tion of Don­ald Trump could also open new op­por­tu­ni­ties for in­sur­ance com­pa­nies to re­lo­cate to a Euro­pean ju­ris­dic­tion such as Malta. With­out any doubt, some of the key ad­van­tages of Malta as a democ­racy in­clude our pro­fes­sional in­sti­tu­tions, EU mem­ber­ship, po­lit­i­cal sta­bil­ity and English speak­ing. Malta has man­aged to pros­per al­beit be­ing small, and can thus give cap­tive own­ers the flex­i­bil­ity of full pass­port­ing rights and ac­ces­si­bil­ity with a stronger cus­tomer fo­cus.

At PKF Malta we pride our­selves on be­ing the right size to pro­vide the right so­lu­tions for the right peo­ple. This is ev­i­denced in the as­sis­tance our team of in­sur­ance, tax, fi­nance and le­gal ex­perts pro­vide to as­sist in com­pil­ing a com­pany’s

fea­si­bil­ity, pre-li­cens­ing and li­cens­ing process, as well as through­out an en­tity’s on­go­ing op­er­a­tion. We pro­vide value adding rec­om­men­da­tions and have as­sisted clients in em­bed­ding risk man­age­ment pro­cesses in their day-to­day op­er­a­tions. It goes with­out say­ing that 2016 be­ing the first year of re­port­ing this will be a chal­leng­ing time for the in­sur­ers as they get to grips with the Sol­vency II re­quire­ments, and at this junc­ture PKF is able to pro­vide ad­vice to help in­sur­ers and/or start-ups deal with th­ese fi­nan­cial re­port­ing chal­lenges. As ser­vice providers, we place value on the re­la­tion­ship we build with our clients. We be­lieve that, by bas­ing a re­la­tion­ship on trust, we can pro­vide clients the best tailor-made ser­vice pos­si­ble. We en­deav­our to pro­vide our clients with the right com­bi­na­tion of skills, ex­pe­ri­ence, sta­tis­ti­cal method­olo­gies and pro­grammes to de­liver the as­sur­ance and sup­port they need. PKF is com­mit­ted to train its staff to en­able them to pro­vide client ser­vice of the high­est stan­dards.

Pro­fes­sional staff al­lo­cated to re­spec­tive projects are closely in­volved through­out the as­sign­ment and pro­vide main source of con­ti­nu­ity. A num­ber of key ex­perts fa­cil­i­tate de­liv­ery of all the ob­jec­tives in a timely man­ner. Li­censed by the MFSA to act as an ap­proved au­di­tor in car­ry­ing out ex­ter­nal au­dits of in­sur­ance com­pa­nies and in­sur­ance in­ter­me­di­ary com­pa­nies, PKF works closely with spe­cialised ser­vice providers within the lo­cal in­dus­try to cater for client’s needs in­clud­ing set-up ar­range­ments. Be­ing

a mem­ber firm of PKF In­ter­na­tional, it also teams up with 400 over­seas of­fices to de­liver spe­cialised tech­ni­cal so­lu­tions (in­clud­ing ac­tu­ar­ial ser­vices) to the lo­cal in­sur­ance in­dus­try. It is worth not­ing that in the UK one ob­serves a plateau­ing ef­fect ex­pe­ri­enced by the Cap­tive mar­ket, which is partly at­trib­uted to a soft mar­ket. Another chal­lenge is the on­set of Sol­vency 11 for smaller in­sur­ance units as they pass through a slow learn­ing curve how­ever the ben­e­fits of this reg­u­la­tory re­form are start­ing to be felt within the mar­ket and un­doubt­edly there is a win­dow of op­por­tu­nity to re­fo­cus again on mar­ket de­vel­op­ment.

Re­cent ar­ti­cles in the in­sur­ance me­dia deal with top­ics on un­cer­tain­ties linked to Brexit talks and un­fore­seen ram­i­fi­ca­tions aris­ing from the pro­tec­tion­ist trade poli­cies that Don­ald Trump as the Pres­i­dent Elect had been promis­ing in his elec­tion cam­paign. In con­clu­sion, PKF Malta be­lieves in the at­trac­tion of US cap­tive own­ers, in par­tic­u­lar those which tar­get Euro­pean risks. For ex­am­ple, the opin­ions reached at the US Sum­mit prove be­yond doubt that there is a need for multi­na­tion­als with op­er­a­tions in Europe to in­sure their risks through Cap­tives. Cer­tainly in the past this was not so pop­u­lar but due to the rea­sons men­tioned in this ar­ti­cle, this is be­com­ing more plau­si­ble than ever, with com­pa­nies want­ing to man­age their in­ter­na­tional risks and reap the full ben­e­fits of a Cap­tive in Europe en­joy­ing full pass­port­ing rights any­where in EU.

This time try Malta – it pro­vides a per­fect fit.

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