After much research, we found that the Turks and Caicos Islands (TCI), British West Indies, provide significantly more flexibility than other locations. It is also less expensive to form and maintain an insurance company in the TCI than in the United States. Corporate capitalization requirements for U.S. insurance companies are at least $150,000, whereas in the TCI, the cost is less than $10,000.
This cost advantage gives an insurance producer the ability to turn incoming funds into lower-taxed insurance dollars for significantly less capital up front. Additional jurisdiction advantages in the TCI include a steady economic environment, modern insurance legislation and regulatory oversight, competitive fee structures, and tax exemption status for qualified companies.
Even though your reinsurance company is formed in the TCI, it is not considered an “offshore” insurance company. It will be treated as a U.S. corporation by the IRS for federal income tax reporting purposes, per a 953(d) election.