Choosing a domicile.
- Regulatory environment. Some jurisdictions are friendlier than others, or their statutes may permit different used and forms of captives.
- Minimum capitalization requirements – varies between jurisdictions from $150,000 to $750,000. Separate series of a group captive requires risk-based amount of capital, typically
- Start-up costs and annual maintenance – typical start-up costs range from $50,000 to $80,000 for pure captive (plus required capital) and from $20,000 to $25,000 for cell (or series) of group captive.
- Underwriting risk classification
- Traditional coverage or non-traditional coverage, such as loss of license.
- Tax implications.
- Small insurance company with premiums less than $1,200,000. See Section 831(b) of the Internal Revenue Code. Applies to US tax-law compliant companies.
- Excise taxes on premiums paid for non-US captives.