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Switzerland
Marsh Management Services, Zurich Branch
Head of Office: Konrad Baumann
Sales Coordinator: Konrad Baumann
Office Address
Marsh Management Services Luxembourg S.A.,
Zurich Branch
Tessinerplatz 5,
CH 8002 Zurich
Switzerland
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Telephone: (4144) 285-9342
Facsimile: (4144) 285-9343 |
Mailing Address
Marsh Management Services
Luxembourg S.A., Zurich Branch
PO Box
CH 8027 Zurich
Switzerland
Basic Information
| Location |
Switzerland is a landlocked country situated in west central Europe. It has several neighbours - Austria, France, Germany, Italy and Liechtenstein and is an important crossroad for continental and intercontinental traffic. Switzerland has an area of approximately 41,300 square kilometers (15,900 square miles) and has a population of more than 7 million. |
| Accessibility |
Frequent flights from all major European cities are available, as well as convenient road and railway connections. |
| Applicable Legislation |
Federal Law on the Supervision of Private Insurance institutions of June 23, 1978, as amended.
Decree of the Federal Office for Private Insurance.
Outline of the Requirements of Authorisation for Professional Captive Reinsurers to operate the Reinsurance Business in Switzerland by the Federal Office of Private Insurance of May 1994. |
| Number of Captives |
50 as of 31-Dec-2008 |
| Regulatory Agency |
Federal Office of Private Insurance in Bern. |
Regulatory Issues
| Acceptable Insurance Subsidiaries |
Pure and Association Captives |
| Acceptable Corporate Forms |
Joint stock company or co-operative |
| Permitted Business |
All commercial lines, personal lines and unrelated business |
| Direct Insurance Permitted |
Yes, but cannot write business in the E.U. Therefore, for the purpose of this document, we limit it to reinsurance. |
| Reinsurance Permitted |
Related parent risk. No Swiss risks accepted if option for favorable tax status. |
| Policy Form and Rate Approval |
Not required |
| Local Office Requirement |
Registered office
Minimum of three directors, majority of directors needs to be resident in Switzerland and citizens of an EU country. |
Capitalization & Solvency Requirements
Minimum Capitalization |
Minimum capital CHF 3Mio, Organization Fund 20% - 50% of capital with a minimum of CHF 0.3Mio
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Premium Taxes |
There are neither insurance nor VAT on reinsurance premium |
Intercompany Loans |
Intercompany loans are allowed to a certain extent. The regulator sets the limits. The investment policy needs approval from the regulator. |
Investment Restrictions |
No specific restrictions; however the investments should be in line with solvency margin rules and security, liquidity and profitability criteria. |
Taxation |
The tax rates and the basis of computation vary from canton to canton. Captives should discuss their reserving policy with their canton so as to define the minimum taxable profit. Via the reserving rules, increase of the equalisation reserve, the profit will be adjusted to the adequate amount. Zurich is here taken as an example, but other cantons would normally be similar.
For Zurich the following applies. No strict limits to reserving as long as a sufficient profit is shown. A profit amounting to the average Swiss bond yield plus 2% as return on equity is expected. For 2007 2.5% + 2%. For the first two years of operation no profit has to be shown and any surplus can be used to increase the equalisation reserve. The minimum profit will also be the basis for computing the federal tax.
Tax on Profit: A flat tax of 8.5% is applicable on the profit after tax.
Tax on Capital: None
The Zurich Cantonal/Municipal taxes:
Tax on Profit: The tax rate is progressive, varying between 4 and 10% based on income after tax. This base tax is then multiplied with the tax factor "Steuerfuss," for Zurich 2007 amounting to 2.32. As an Administrative company only 15% of the profit will be taxed meaning 1.40% - 3. 5% on profit after tax.
Tax on Capital: Base tax 0.03% on taxable equity for Administrative companies, "Steuerfuss" applies, meaning 0.070% on taxable equity.
If desired higher amounts can be paid. |
Tax on liquidation profit |
The Swiss double tax treaties are applicable to these companies |
Double Taxation Treaty |
Switzerland has double tax treaties with most countries. There is a need to analyse on a country by country basis whether there are any local laws that could result in income becoming taxable, even although there is a double tax treaty (ex. Aussensteuergesetz in Germany) |
Reporting Requirements |
Financial year to end 31.12
No special accounting rules for insurance or reinsurance companies apply
Audited financial statements prepared under normal accounting standards
File a report with the Federal Office of Private Insurance before April 30, using the official reporting package for reinsurance companies
Publish the balance sheet (without a P/L and the notes to the accounts). The publication will be arranged by the Federal Office of Private Insurance on the basis of the official reporting
File a tax return |
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