17 August 2017Analysis

CapAlt is first captive group to join Inc. 5000

In what might be seen by some as a validation of the growing importance and acceptance of captives as critical companies to the US economy, Atlanta-based risk management consultancy Captive Alternatives has made Inc. 5000’s list of fastest-growing private companies.

The list looks at the most successful small and medium-sized businesses operating within the US economy.

“The Inc. 5000 award validates our growth-orientated business model,” said CapAlt COO David Kirkup. “The challenge of marketing a complex financial product and building strategic relationships with savvy partners has been rewarding, and we are very pleased with our progress.”

The average company on the 2017 Inc. 5000 list achieved a three-year average growth of 481 percent.

The Inc. 5000’s aggregate revenue is $206 billion, and the companies on the list collectively generated 619,500 jobs over the past three years.

Companies such as Microsoft, Dell, Domino’s Pizza, Pandora, Timberland, LinkedIn, Yelp and Zillow have all featured on the list.

Around two years ago CapAlt moved all of its captives into a cell structure in Puerto Rico, and has found the domicile to be quite unique in that it operates under US federal law but also benefits from a low-tax environment.

Kirkup believes an advantage of forming a captive in Puerto Rico is that it does not use the 831(b) mechanism, which faces scrutiny from the IRS.

CapAlt offers its own alternative cell structure to manage captives, and has been approved by the Puerto Rico authorities to manage up to 2000 captives.

CapAlt now manages around 200 protected captive insurance companies, all centralised in Puerto Rico, where the inception-to-operation curve climbs faster than other US domiciles or offshore locations, Kirkup claims.