Cyprus International Trusts
In 1992 Cyprus enacted the International Trusts Law, which complements the Trustee Law that is based on the English Trustee Act 1925. On the 8th of March 2012 the House of Representatives enacted the long awaited International Trusts (Amending) Law of 2012 effecting various structural amendments to the International Trusts Law of 1992.
A trust can still qualify as an international trust for the purposes of law even if the settlor, trustee or the beneficiaries are international business companies or international partnerships.
A trust can still qualify as an international trust for the purposes of law even if the settlor, trustee or the beneficiaries are international business companies or international partnerships.
Type of Trusts
Discretionary TrustA Discretionary Trust is a trust whereby the Trustees have “discretion” about how to use the trust's income and about how to distribute the trust's capital. A Discretionary Trust is used in those cases whereby there is a need to protect the beneficiaries from taxation, as in that case the beneficiaries have no legal right on the trust until the trust funds are distributed to them by the Trustees.
Purpose/Charittable TrustA Purpose/Charitable Trust is set up in order to advance a specific purpose. It is a trust that has no beneficiaries as it is usually set up for a charitable purpose. A purpose/charitable trust can be executed by the Settlor, his personal representatives or by an enforcer.
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Fixed TrustAnother type of trust is a Fixed Trust, which does not give the trustee any discretion when distributing the assets to the beneficiaries. A Fixed Trust is usually set up as a way of preventing the Trustees from using their full powers in the way assets are distributed to the Beneficiaries as in that case the Trustees will have to follow the terms of the Trust.
Purpose TrustsPrivate Trusts are expressly created by the settlor and can be created by deed, in writing, by will and, with some exceptions, orally. The intention of the settlor must be made absolutely clear. The beneficiaries have enforcement powers in respect of the trust.
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Advantages
Tax BenefitsIncome, gains and profits from non-Cyprus sources are exempt from income tax, capital gains tax, special defense contribution or any other taxes in Cyprus. In addition, there is no estate duty or inheritance tax in Cyprus.
AnonymityA CIT is not a public document. Furthermore, neither the Settlor nor the Beneficiaries will be the registered owner of any Trust Assets, a Trust arrangement can be regarded as highly confidential.
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Asset ProtectionA CIT is an effective way to protect assets from creditors and potential claimants, as the Settlor ceases to own the settled assets, but also from any claims based on a lack of recognition of the Trust, infringement of forced heirship rules, and a personal relationship with the Settlor, such as husband and wife.
No exchange control regulations are applicable to the CIT. |
Services
Legal ServicesAdvises on the creation of a Cyprus International Trusts, including proposing structure ideas for creating, managing and dissolving a Cyprus International Trusts and draft all required legal documents.
Advises the beneficiaries and trustees on issues arising in relation to a Cyprus International Trusts, trustee powers, beneficiary rights, interpretation of trust deeds and other trust related documentation.
Representation of the beneficiaries and trustees in court proceedings (contentious or not contentious).
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Administration ServicesSupporting and assistance in terms of logistics when setting up a Cyprus International Trust.
Providing trustee, administration, management and other related services.
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People
Michael O. Ioannides
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Andreas N. Leonidou
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