MJM specializes in the performance of the statutory audits of International Insurance Companies regulated by the Office of the Commissioner of Insurance of Puerto Rico (OCI). Laws No. 399 and 400 of September 22, 2004, created Chapter 61 of the Puerto Rico Insurance Code. This legislation provides for the authorization of international insurers and reinsurers to assume risks outside Puerto Rico, under a secure and flexible regulatory scheme, which includes attractive tax benefits. An International Insurer is an insurer organized in Puerto Rico to assume risk outside Puerto Rico. An international reinsurer may assume risks in Puerto Rico and or participate in the Surplus Lines Market, in compliance with the requirement thereof. Chapter 61 also provides for the establishment and provides benefits for International Insurer Holding Companies. An International Insurer Holding Company is a Puerto Rico corporation that holds interest in an International Insurer or another International Insurer Holding Company. Finally, the Chapter also allows for the establishment of Foreign Insurer Branches as an International Insurer.

            Tax Treatment –

• • • Exempt from premium taxes;
    • Exemption on dividends and other profit distributions made by the International Insurer and International Insurer Holding Company.
    • Exemption on municipal franchise and real and personal property taxes.
    • Exemption to the International Insurer and qualifying International Insurer Holding Company from withholding taxes on payments of dividends and other profit distributions made to third parties.
    • Isolation of the proceeds and benefits paid by International Insurers from state and donation taxation procedures, applicable to non-residents.
    • Exemption from the income derived from dividends and distribution of profits, in the case of a partnership, distributions in total or partial liquidation or other income items similar thereto received by an International Insurer or an International Insurer Holding Company.
    • $1.2 million tax exemption on Net Income. Exemption applicable at the individual cell level for Protected Cell Company arrangements and at the company level. Preferred 4 % tax rate on Net Income (not applicable to Holding Company), guaranteed by a decree effective over a period of 15 years, renewable for two additional periods. Tax treatment guarantee by a 15 year tax decree, renewable for two additional 15 years periods.