Cyprus International Trusts
Trusts are used in a multitude of different situations. You may be searching for a legal strategy to a problem and not yet have identified that a trust will provide the answer. For example trusts can be used to regulate the way two or more people own a property or to safeguard children in a Will or even to preserve personal injury compensation.
Trusts often involve very technical legal and tax knowledge. Our Team use their expertise to ensure your finances are safe guarded for you and your family.
The new legislation has been enacted on the 8th of March 2012 to bring various structural amendments to the International Trusts Law of 1992 and to adapt the Cyprus law on trusts to the current needs of international investors and not only.
Following the recent amendments of the Cyprus International Trust Law 2012, a CIT:
- Removes any prohibition on settlors relocating to Cyprus after establishing a Cyprus International Trust;
- Makes clear that all questions relating to CITs are to be determined in accordance with the laws of Cyprus;
- The settlor can choose the applicable law that will govern the trust and change the governing law or the forum of administration of the trust.
- Protects against the application of foreign laws, as a matter of public policy;
- Allows the settlor to reserve powers to himself, to retain a beneficial interest in trust property, or to act as the protector or enforcer of the trust;
- Removes any limitations on the duration of a trust;
- Widens trustees’ investment powers and, in particular, abolishes the prohibition on investment in immovable property in Cyprus.
- At least one of the appointed trustees must be a permanent resident in Cyprus ensuring that the Cyprus courts have effective jurisdiction over the trust.
- A trustee could be a natural or legal person and as such, a trustee could be a company registered in Cyprus, with three directors, one of which could be a third country national
- A trustee may at any time invest in movable or immovable property in Cyprus and abroad.
- An CIT shall not be void or voidable and no claim may be brought in respect of assets transferred to an international trust in the event of the Settlor’s bankruptcy or in any action or proceedings against the Settlor at the suit of his creditors
- Disclosure is permitted only if necessary and in the interests of the trust, or under a court order
- CITs trusts are transparent for Cyprus tax purposes
- Tax is also assessable on Cyprus source income
With the new amendments in place, CITs that continue to have non-Cyprus resident beneficiaries, non-Cyprus sourced income and no immovable property in Cyprus are completely tax exempt from Cyprus taxes. In case the beneficiary is not a resident of Cyprus, then the income or profits of such trust that arise within Cyprus are taxed according to the tax laws of Cyprus. In effect any income or profits of such trust that arise outside Cyprus are not taxed in Cyprus. In any event, we will take into consideration any tax implications for the structure we will suggest to you.
Our services on CIT include:
- Drafting of an ordinary trust deed or a full trust settlement
- Appointment of a trustee to deal and acquire the legal interest of the assets comprising the trust
- Managing and administrating of the CITs assets
- Appointment of a Protector to supervise the Trustees actions
- Drafting a Letter of Wishes as instructed by the Settlor
- Custodian and Escrow agent services
- Register the CIT to the relevant authorities.
- Consulting services on tax benefits for CITs
For further information regarding International Trust Schemes please contact us at [email protected].
If you would like to receive a copy of our Trust information sheet please Download here