Domicile Wars: Luxembourg confident in the face of rising EU captive competition

• More captive formations expected by end of the year
• French captive owners unlikely to re-domesticate
• Luxembourg could benefit from PCCs, but equalisation provision a barrier
• Replenishment of talent and Solvency II considered key challenges

Luxembourg’s established and attractive equalisation provision, in addition to its long-standing reputation, are expected to maintain the jurisdiction’s popularity as an EU domicile choice for reinsurance captives, despite increasing competition.

There has been concern that the introduction of captive legislation in France could provide stiff competition for Luxembourg, with the French government publishing details of its captive decree in June.