Premier and Minister of Finance Paula Cox has announced a modification to Mexico’s tax law that will encourage Mexican entities to establish captive insurance companies in Bermuda.The modification stems from the existing bilateral Agreement on Exchange of Information with respect to taxes (TIEA), made between the United Mexican States and Bermuda in October 2009. It lowers the 40 percent withholding tax rate to Bermuda entities, especially to Bermuda captive insurance companies.Ms Cox said: “Many Bermudians work directly in the Bermuda captive insurance industry and the news will improve growth in that industry by attracting Mexican entities to establish captive insurance companies in Bermuda.”She added: “While other jurisdictions that have a TIEA with Mexico will receive the same benefit, this will strengthen Bermuda’s international business sector.“Therefore, Bermudians not directly employed in the captive insurance company sector will also benefit from our efforts to further strengthen our international business sector.“Bermuda is the world’s leading captive insurance centre, and on a level playing field basis Bermuda is one of the preferred jurisdictions of choice for captives. “This is wonderful news that could not have come at a better time.”For more on the TIEA between Bermuda and Mexico, see the Ministry of Finance pages at www.gov.bm and the news archive at www.businessbermuda.org.