Cyprus International Trusts are governed by the International Trusts Law of 1992 which regulates establishment and administration of Trusts. It has been completed by new amendments in March 2012.
A Cyprus International Trust is characterized by the following:
All income received by an International Trust is not taxed in Cyprus.
Dividends, interest or other income received from a Cypriot company by an International Trust is not taxed and it is not subject to withholding tax.
Gains from the disposal of assets of an International Trust are not subject to Capital Gains Tax in Cyprus.
An International Trust created for the purpose of Estate Duty planning would not be subject to estate duty in Cyprus.
With the creation of a Cypriot International Trust, the Settler can safeguard the interests of minors and mentally handicapped individuals and can protect the beneficiaries from individuals that cannot be trusted with the management of an estate. This way, the Settler can ensure that these people will be well provided for, even after the Settler has deceased.
A Cypriot International Trust can also be used for cases where a Settler wishes for a person to benefit from inheritance in the cases where due to the legislation of the individual’s country, they would otherwise be excluded from the inheritance.
Anyone who wishes to dissociate himself from personal assets for any reason can do so by transferring the assets, movable or immovable, to a Cypriot International Trust.
A person who wishes to keep his ownership in a company anonymous and confidential can do so by setting up a Discretionary Cypriot International Trust and transferring the shares of the company to the Trust.
If an individual has income arising from abroad which they do not want to remit to their country of residence, then they can use a Discretionary Trust to hold this income which will be managed by the Trustees of a Cypriot Settlement as per their wishes.
A person who has assets outside his country of residence in which country may in the future extend its exchange control restrictions to include the remittance of overseas funds can transfer the assets to a Discretionary Trust.
Cyprus has a particularly attractive and favourable legal system governing Trusts. This, together with the strategic geographic location of the island, makes Cyprus a convenient location for the formation and operation of a Trust.
Cyprus has been a full member of the European Union and Eurozone since 1st May 2004. Since then, Exchange Controls have been abolished. Deposits of Cypriot International Trusts with Cypriot Banks or any Bank in the world are also not subject to exchange controls.
The absence of exchange control restrictions and the excellent quality of international banking services in Cyprus, makes Cyprus a suitable base for the remittance and transfer of funds.
Cyprus benefits from a high degree of professionals in the legal and accounting industries as well as from numerous reputable international fund management companies that can ensure the Trust will be properly operated and managed in a professional and competent manner.
Amendments made in 2012 stipulate that no information and/or documents can be disclosed by the Trustee or Protector of a Trust or the trust enforcement supervisor relating to the accounts of the Trust, the terms of the Trust Deed or the identity of the beneficiaries or trustees without a Court Order.
Flexibility in the Cyprus law allows for the removal of a Trust from one jurisdiction and vice versa.