CYPRUS INTERNATIONAL TRUSTS

You may view below our full brochure on Cyprus International Trusts:

June 2014

History

In 1992, Cyprus enacted The International Trusts Law, which complemented and modernised the existing Trustee Law, an action which has proven to be a “successful step” towards rendering Cyprus a favourable jurisdiction attracting foreign investors from all over the world for the creation of international trusts. The 1992 International Trusts Law was further amended in early 2012 to adapt to the changing circumstances of the business world, strengthening in this way even more the position of Cyprus as one of the most attractive trust jurisdictions by providing a flexible, secure and modern legal and taxation framework. The International Trusts Law of 1992 to 2013 now seems to be more easily adaptable to the business needs of today’s ever growing requirements.

Concept

The Trust is a fiduciary arrangement/agreement whereby an individual (Settlor) either during one’s lifetime or upon death places assets under the control of a third party (Trustee), to hold and manage the assets on behalf and for the benefit of another third party (Beneficiary). It is common but not compulsory for a Trust to have a Protector to whom the Settlor may give the right to restrict the rights and powers of the Trustee, veto the latter’s decisions, or even appoint or terminate the appointment of a Trustee.

Few words on what constitutes the Cyprus International Trust (CIT) 

A CIT can be established if the Settlor and any Beneficiary (with the exception of a charitable organization) are not Cyprus tax residents in the calendar year preceding the year of the creation of the Trust, thus Settlors can now relocate to Cyprus after establishing a CIT and Beneficiaries no longer need to be non-Cyprus tax residents during the life of the Trust. At least one of the Trustee(s) must be a resident of Cyprus. A CIT has no limit as to the period of its duration; a Trust may continue to be valid and enforceable for an indefinite period. A beneficiary can be an individual (including an unborn person) or a legal person. Purpose trusts are allowed and the trustee may have an interest in the trust property. Trustees are permitted to hold, maintain and/or invest in movable and immovable property located in Cyprus and elsewhere, which also includes investing in shares of a company incorporated in Cyprus. The Settlor has the right to reserve many powers, inter alia, revoke or amend the provisions of the Trust, to appoint or remove any Trustee, Inspector, Protector or Beneficiary of the Trust and is able to limit the Trustees’ powers. For a CIT that is governed by Cyprus Law, subject to the terms of the trust document, any inheritance laws of both Cyprus and other jurisdictions cannot interfere with the effect of a CIT thus giving exclusivity to the trust laws of Cyprus as regards CITs by excluding conflict of laws. All matters of the CIT, subject to the terms of the trust document, are determined under Cyprus law while at the same time a CIT may be changed to another foreign law.

Benefits 

The income and gains of a CIT which are earned or deemed to be earned from all sources (in and out of Cyprus) are subject to Cyprus tax only in the event of a beneficiary being a Cyprus tax resident; In the case of a beneficiary who is not a Cyprus tax resident, only income or gains earned or deemed to be earned from Cyprus sources are subject to Cyprus tax; There is no inheritance tax or estate duty in Cyprus; CITs and their bank deposits in Cyprus banks are not subject to exchange control; There are no reporting requirements for CIT; Registration of the CIT is not compulsory, apart from registering the CIT with one of the three authorities in Cyprus supervising and regulating the provision of trustee services by giving some specific information on the CIT such as name, address, date of creation etc. to be in line with EU and local anti-money laundering laws; Anonymity and confidentiality of the individuals creating a CIT and of their beneficiaries are safeguarded by provisions of the law; Asset protection for minors and other family members, against spendthrift beneficiaries or against risks arising in contract or otherwise from transactions entered into by the Settlor, or even against potential liquidation or bankruptcy of the latter; Very low and competitive cost prices for setting up and maintaining a CIT, with a stamp duty payable to the Cyprus authorities not exceeding Euro 450.

What we can do for you:

Advise you on the creation of a CIT and draft all required legal documentation in relation thereto. Set up and manage trustee companies to offer their trusteeship services to a CIT. Advise you about all issues relating to a CIT, including trustee powers, beneficiary rights etc., and for any other matter that may be of concern to you in relation to the creation of a CIT or of an existing CIT. Review and interpret trust deeds and other trust related documentation. Advise on tax matters relating to the creation and maintenance of a CIT. For further information please contact Dimitra Papadopoulou at d.papadopoulou@cyplaw.com 

How we can help you:

Clerides Anastasiou Neophytou is a leading law firm in Cyprus specialising in corporate, commercial, and tax law and M&A transactions. We are top ranked in tax law and highly recommended in corporate and M&A by well-known international agencies ranking law firms worldwide. Our associates and staff stand ready to assist you with efficient, high-value, cost-efficient services, to help you structure your transactions in Cyprus.

For further information please contact us at:

Clerides, Anastassiou, Neophytou LLC

Limassol, Cyprus

Tel: +357 25 274050

info@cyplaw.com 

This material has been prepared by professionals of Clerides, Anastassiou, Neophytou LLC. It is intended as a general guide only, and its application to specific situations will depend on the particular circumstances involved. Accordingly, we recommend that readers seek appropriate professional advice regarding any particular problems that they encounter. This information should not be relied upon as a substitute for such advice. While all reasonable attempts have been made to ensure that the information contained herein is accurate, Clerides, Anastassiou, Neophytou LLC accepts no responsibility for any errors or omission it may contain or any opinions contained herein whether caused by negligence or otherwise, or for any losses, however caused, sustained by any person that relies upon it.

Clerides, Anastassiou, Neophytou LLC provides corporate and commercial legal services, to public and private international and local clients spanning multiple industries. Please visit our internet site at www.cyplaw.com for a full description of our services and representative transactions. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without prior permission of the publisher.