An international trust is a valuable vehicle for preserving family wealth, estate planning, asset protection, confidentiality, tax planning and more.
International trusts are domiciled outside of one’s own country of citizenship and benefits grantors/settlors with more favorable laws than are available in other jurisdictions.
The main legal framework governing trusts in Cyprus is a combination of English Law i.e. the Principles of Equity and Statute Law i.e. The Trustees Law of Cyprus (Cap 193), which, is modelled on the English Trustee Act of 1925 and the International Trusts Law of Cyprus (Law 69(I) of 1992 as amended by Law 20(I)/2012).
The International Trusts Law of Cyprus builds on the well established English principles of equity and trusts and has created one of the most attractive trusts legal frameworks in the world. It is intended to offer to qualified persons, the opportunity to create a trust that will suit the most complex situations and demands and enjoy many advantages that cannot be found concentrated in other trusts jurisdictions. Such a trust is called a Cyprus International Trust (CIT).
To qualify for a CIT the Settlor and the Beneficiaries must not be tax residents in Cyprus during the year preceeding the year of creating a CIT (they may become tax residents subsequently)
However, there must also be at least one Trustee who is a permanent resident of Cyprus. Property of all descriptions can be settled into a trust, but the trust cannot include any immovable property in Cyprus.
A Few Benefits of Cyprus International Trusts
No exchange control
– Cyprus International Trusts aren’t subject to exchange control. Exchange controls are bans or restrictions governments place on the amount of foreign or local currency allowed to be traded or purchased.
The lack of exchange control in Cyprus includes bank deposits either onshore or offshore, and/or with any bank worldwide. This makes Cyprus an ideal base for sending or transferring funds.
– International Trusts Law prohibits trustees and even government officials, from disclosing information regarding a trust.
Information is given only by court order when it might have a bearing on the outcome of a civil or criminal trial.
Income, Dividends and Capital Gains
– Cyprus International Trusts are not taxed. Trusts with property and income gained outside of Cyprus isn’t taxable.
Also, dividends, interest and other income received by a trust from a Cyprus company aren’t taxed, nor are they subject to withholding tax.
And, finally, gains derived from the sale of assets of an International Trust aren’t subject to capital gains tax in Cyprus.
We at Christophi and Associates LLC specialize in Cyprus companies and corporate law, including matters of international trust. For consulting or assistance with your international trust, email us at email@example.com.