Our firm holds extensive expertise on the creation of a wide spectrum of trust structures from very simple family trusts to more complicated trusts.
Trusts are mainly regulated by the Trustee Law, Chapter 193, enacted in 1955 and based on the English 1925 Trustees Act. This is supplemented by the English Doctrine of Equity and English case law prior to 1960.
In 1992, Cyprus enacted the International Trusts Law, 69(1) I 1992. This was done in order to update the law and establish Cyprus as an offshore and financial centre and a serious trusts jurisdiction.
However, in 2012, the Cyprus International Trusts law of 1992was amended and has ultimately placed Cyprus at the top of the league of International Trust Jurisdictions. As a result, the amendment of the Cyprus International Trusts Law, has become reality with the International Trust (Amending) Law of 2012 turning Cyprus as the currently most favourable trust jurisdiction in the EU.
The new Cyprus International Trust (CIT) regime enables settlors and beneficiaries to enjoy the highest degree of protection internationally and formidable asset protection capability together with the unmatched tax advantages afforded in Cyprus.
The New Law provides that any matter relating to the validity or administration of an international trust, the trustees' fiduciary powers and duties and the powers and duties of any protectors of the trusts are governed exclusively by Cyprus without reference to the laws of any other jurisdiction.
The creation of a trust can:
- mitigate tax liabilities;
- preserve confidentiality;
- serve to hold a property for minors or successive generations of a family;
- permit the control and enjoyment of assets to be maintained, despite giving or selling the assets to others;
- benefit certain groups of people;
- act as a management vehicle;
- enable charitable objects to be carried out.
For a trust to qualify as an international trust, the following requirements must be fulfilled:
- the Settlor must not be a permanent resident in Cyprus;
- no beneficiary, other than charitable institution, can be a permanent resident in Cyprus;
- the trust property cannot include any immovable property in Cyprus;
- at least one trustee must be a permanent resident in Cyprus;
- Cyprus International Companies do qualify as residents of Cyprus for the purpose of the Law.