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What is a Cyprus Trust?

The legal framework governing a Cyprus International Trust (CIT) is a combination of English Law and the International Trusts Law of Cyprus.

A CIT offers to individuals the ability to set up a trust that can suit even complex situations and advantages that cannot be matched in other trusts jurisdictions.

Cyprus International Trusts – qualification criteria

Under section 2 of the International Trusts Law, a trust qualifies for a Cyprus International Trust where:

  • the settlor is not a permanent resident in Cyprus;
  • at least one trustee is a permanent resident in Cyprus;
  • no beneficiaries are permanent residents in Cyprus; and
  • the trust property does not include any immovable property in

Advantages of a Cyprus Trust

  • The Settlor has the right to reserve many powers including, to revoke or amend the trust, to instruct the Trustee, to appoint and remove trustees, the protector or the enforcer, to change the law regulating the CIT or the place of its administration and others
  • The income of a CIT may be accumulated without limitations
  • The law regulating a CIT may be changed to another foreign law
  • The trustees of a CIT are bound by confidentiality and cannot disclose information or documents unless they are ordered by a Cyprus Court or are required by law in certain defined circumstances
  • Succession, heirship or other laws applicable in foreign jurisdictions or court judgments or orders or arbitral awards or decisions by foreign Competent Authorities do not affect the validity of a CIT or the transfer of property to the Trustee of a CIT
  • In the case of a CIT which is expressly governed by Cyprus Law, the provisions of the International Trusts Laws of Cyprus apply without reference to other applicable rules of conflict and as a matter of public order
  • may be challenged only on defraud of creditor grounds with a two years limitation period
  • can last for an indefinite period
  • can be created for charitable or any other purpose

The trustees of a CIT are bound by confidentiality

Typical uses of a CIT

  • to establish a family fund
  • as an investment vehicle
  • for charities
  • to hold property, for minors or successive generations of a family
  • to provide confidentiality from third parties
  • as part of a prenuptial marriage arrangement

Tax advantages

  • non-resident beneficiaries are subject to tax in Cyprus an income and profits of the trust derived only from sources within Cyprus
  • resident beneficiaries are subject to tax in Cyprus an income and profits of the trust derived from sources within and outside Cyprus

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