Bierce & Kenerson, P.C.

Business Operations: Captives

Captive entities can serve special purposes (such as to acquire and hold assets) or general operational purposes. Even small to mid-size companies need to establish captives. As a fundamental tool in corporate and commercial transactions, captives (sometimes referred to as subsidiaries or affiliates) can be used to

launch toehold operations in foreign markets;
establish joint ventures or strategic alliances;
acquire target companies or target assets;
limit risks to real estate or intellectual property rights by segregating them from business operations;
establish a path for foreign employees to fit within applicable categories of business non-immigrant visas for working in the United States;
limit liability for operations under different regulatory, economic or management conditions; and
minimize income, estate and gift taxes.

Establishing captives and affiliates requires attention to intercompany transactions, including tax planning, licensing and capital flows. We advise clients on captives in various business schemes.

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