Cyprus International Trust Services
Cyprus has specialised legislation pertaining to International Trusts and is therefore a popular jurisdiction for their formation. Cyprus International Trusts can be formed if the following conditions and criteria are satisfied:
- The settlor should not be a tax resident of Cyprus for at least a year before the formation of the international trust.
- At least one of the trustees for the time being should be a tax resident of Cyprus for the whole of the duration of the trust.
- None of the beneficiaries should be tax residents in Cyprus for at least a year before the formation of the international trust with the exceptions of charities.
Cyprus International Trusts have a plethora of advantages. These include, without limitation, the following:
- Zero Tax: Any profits or income earned from assets or business of the Cyprus International Trust, e.g. income from trading in stock, dividends, real estate, capital gains, factories, services etc. is not taxable in Cyprus unless the beneficiary is tax resident in Cyprus or the profits were earned in Cyprus. Also the Cyprus International Trust is not subject to an estate duty.
- Divesting Income or assets: Personal or individual assets may be divested for fiscal or other reasons by transferring them to an International Trust. An individual that has income arising outside Cyprus which does not wish to remit to his/her country of residence or which he does not wish to account as taxable income in his/her country of residence can be arrange that this income is a part of the income of a Cyprus International Trust.
- Overseas Investment: An individual may invest in an overseas business and ensure that the profits and dividends received are remitted to a Cyprus International Trust.
- Holding Assets: A Cyprus International Trust can be used to own an underlying investment holding company or assets in another. This type of tax planning device has many advantages in providing the maximum possible protection for both the Settlor and the beneficiaries alike.
- Global Estate planning: Assets that form part of a Cyprus International Trust are exempt from inheritance tax and can avoid inheritance legislation or strict heirship provisions in certain countries. Through the use of a Cyprus International Trust an individual can arrange to be succeeded or inherited by persons, who, due to the legislation of the individual’s country, would otherwise be excluded from such succession or from the inheritance.
- Protection from creditors or Bankruptcy: The assets of a Cyprus International Trust are protected from creditors, bankruptcy or liquidation proceedings unless the creditors can prove that the Cyprus International Trust was set up to deceive such creditors at the time of its formation and they sue the trustee within two years of transferring the property to him/her.
- Provisions for family: The assets of a Cyprus International Trust can be distributed in such a way so as to make provisions for the future of the members of the Settlor’s family or any other person.
- Anonymity: The assets, the settlor and the beneficiaries of a Cyprus International Trust are protected by anonymity and confidentiality and only a competent Cypriot court can make an order to the trustee to disclose information. There is also no provision for formal registration of the Cyprus International Trust. An individual who wishes to keep anonymity can do this by setting up a discretionary trust that in turn owns the shares of a company. This is a particularly useful tool and a popular vehicle for carrying out trading and financial activities for individuals who have signed restraint of trade agreements of for individuals who reside in jurisdictions which do not recognise the concept of a Trust.
- Reservation of Settlor’s rights: The settlor may reserve many rights upon forming the International Trust so that he/she has control of the trust in the years to come, e.g. may reserve the right to recall any provisions, to change the trustee, to give directions to the trustee, to decide on the division of the property or dividends, etc.
- Exchange Control: An individual with assets outside his country of residence and whose country of residence may have exchange control restrictions which include remittance of overseas funds, may wish to retain the flexibility of overseas funds by transferring them to a Cyprus International Trust.
- Asset Protection: Individuals from volatile parts of the world that wish to protect part of their fortune from high domestic inflation rates may convert it into strong currency assets and place their funds into a Cyprus International Trust rather than a company because they can hold the funds anonymously and have full control of their control by drafting the trust in any way they wish. Individuals can also protect their assets against possible expropriation laws, future claims of Governments, law suits or international blocking or freezing regulation overseas.
- No Restrictions on investments: Assets that form part of a Cyprus International Trust can take any form and funds can be invested in any type of risky or safe investment e.g. real estate, bonds, shares, commodities, bank accounts etc.
- Flexibility: The settlor may become a trustee or its sole trustee of the Cyprus International Trust so that the management may remain with him/her for life and, subject to the provisions of the Trust Deed, he/she may therefore have complete freedom in such management.
Important Note
The above information is current as of 2017 and is subject to changes from time to time. Persons interested to form Cyprus International Trusts in the Republic of Cyprus should seek our updated professional advice before committing themselves into any transaction or decision.
Our Services:
We can aid in the formation of Cyprus International or other overseas trusts, such as the Belize trust, who shall offer similar advantages to the Cyprus International Trust. Through us you shall be offered:
- A commissioned service regarding the establishment of an offshore trust. The trust deed and its provisions shall be drafted to suit your individual needs.
- Fiduciary and Trustee services akin to our nominee Director services.
- Management and Administration of the trust funds through our real estate, fund managers and stock-exchange associates.
- Trust accounting and maintenance of asset ledgers through our accountant and auditor associates.
- Reporting and filing documentation as appropriate.
- Formation of asset protection structures to shelter assets from tax, financial or legal claims that may be initiated or imposed on wealthy individuals. We shall apply innovative and preemptive strategic, administrative and structure practices to reach the most cost effective solutions.