As a member of the Commonwealth and due to the fact that Cyprus follows a common law legal system, the legislative framework of Cyprus under The Trustees Law of Cyprus Cap 193 in combination with the Principles of Equity and Trusts under the English Legal system allows for the existence and creation of trusts.
A “trust” is a fiduciary arrangement that allows, upon request of the creator known as the “settlor”, a third party also known as “trustee” to hold and manage assets on behalf of another person known as the “beneficiary”. Trusts can be arranged in various ways and each trust specifies precisely the how and when the assets are managed on behalf and for the benefit of the beneficiaries.
A trust provides for numerous benefits such as:
- Separation of assets from the settlor’s owned assets.
- Easily amended and enforced according to the settlor’s wishes.
- The trustee acts on behalf and for the benefit of the beneficiaries in the trust, whether minors or successive generations of a family.
- The trust can be a shareholder in a company or a company
- Assets can be added to the trust at any time.
- Creation of a trust fund for future needs of a family.
- Creation of pension fund/scheme for employees.
- Creation of a trust for charitable purposes
- Has no expiration date.
The International Trusts law of Cyprus provides for numerous benefits such as:
- Cyprus Trusts and its beneficiaries are not subject to tax in Cyprus. The law provides that the income and the gains of an international trust derived or deemed to be derived from sources outside of Cyprus shall be exempted from all tax imposed in Cyprus.
- No Capital Gains tax is paid by the International Trusts.
- Distributions to beneficiaries are not subject to tax in Cyprus.
- Matters relating to a Cyprus International Trust are governed by the Cyprus Law and Courts.
- A Cyprus International Trust’s validity is not affected or the transfer of the property to the Trustee of such a trust is not affected by succession, heirship or any other laws applicable in foreign jurisdictions or either by foreign court judgements or orders or arbitral awards or decision by foreign Competent Authorities.
Our firm may assist in the setup of Cyprus and International Trusts and the provision of fiduciary and related services.