In order for a trust to qualify as a Cyprus International Trust and enjoy the advantages afforded by Cyprus law to Cyprus International Trusts, the Cyprus International Trust must comply with the following requirements:
Under the Cyprus International Trusts Law the settler of a Cyprus International Trust may be an-individual or a legal entity but may not be a permanent resident in Cyprus.
Under the Cyprus International Trusts Law the beneficiaries of a Cyprus International Trust maybe individuals or legal entities but may not be permanent residents in Cyprus.
Under the Cyprus International Trusts Law at least one trustee of a Cyprus International Trust must be a permanent resident in Cyprus. As a rule, Cyprus companies operate as trustees of Cyprus International Trusts.
Under the Cyprus International Trusts Law the property settled in a Cyprus International Trust may be any property other than immovable property in Cyprus.
If the settlor so wishes, he/she may appoint a protector in the Cyprus International Trust who would have the power to veto certain decisions of the trustees.
Taxation and other benefits:
Cyprus International Trusts enjoy important tax advantages. The following are tax advantages.
Double Tax Treaties
Cyprus has a wide network of double tax treaties and many of these treaties are drafted in such a way that trusts are eligible for their benefits, making it an attractive choice of jurisdiction from the fiscal point of view when considering a settlement of assets into a trust.
Any income of a Cyprus International Trust, whether trading or otherwise, is not taxable in Cyprus.
Dividends, interest or other income received by a Cyprus International Trust from a Cyprus international business company are not subject to tax.
Gains on the disposal of the assets of a Cyprus International Trust are not subject to tax in Cyprus.
Individuals retired in Cyprus
A foreign individual who creates an International Trust in Cyprus and retires in Cyprus would be exempt from tax in Cyprus if all the property settled and the income earned is abroad, even if he is a beneficiary.
A Cyprus International Trust would not be subject to estate duty in Cyprus.
Favorable Legal System
The favorable legal system relating to Cyprus International Trusts makes Cyprus a particularly attractive Trust location.
No Exchange Control
Cyprus International Trusts are not subject to exchange control. The absence of exchange control restrictions make Cyprus a convenient base for the remittance and transfer of funds to Cyprus International Trusts and from the Cyprus International Trusts to their beneficiaries.
Availability of Quality Trustee Services
The presence of a number of reputable international fund management companies on the island and the high standing of the legal and accounting professions ensure the availability of expert advice as well as the competent management services required for the proper operation of a Trust in Cyprus.
International Trusts Law requires trustees to maintain confidentiality of the Trust. There are no registration or reporting requirements for Trusts established in Cyprus, nor is it required to identify in the Trust Deed the names of the beneficiaries of the Trust. The Deed of the Trust is private to the parties concerned. The Settlor may also provide that the beneficiaries of the Trust should not be aware of the Trust until their entitlement vests in them. These features help to ensure confidentiality of the settlor’s intentions.
A Cyprus International Trust may be transferred to another country’s jurisdiction provided such jurisdiction is able to accept it. At the same time, a trust established in another jurisdiction may be transferred to Cyprus provided the existing jurisdiction of the trust allows for it.
We have considerable experience of assisting clients to form Cyprus International Trusts, guiding them on all legal and practical aspects of preparation of the Trust Deed. Our expert lawyers will help you to ensure that your Trust is both legally valid and that the intentions you express as the settler in the Trust Deed are enforceable.
We have considerable experience in acting as trustees for a number of Cyprus International Trusts. Our expet lawyers will be able to discuss with you the best way to structure the trustee services for your Trust depending on your intentions.