Asset Protection | International Succession | International Estate Planning | Family Office Services
Complementing its standing as a world-class financial centre Cyprus’ legislative framework also provides superior wealth-holding structures, both common law through the Cyprus International Trust, and more typical of civil law jurisdictions, the Cyprus Foundation.
Cyprus International Trusts (“CITs”)
First introduced by Cyprus through the Trustee Law 1955; Cyprus pioneered the international trust in 1992 with tax advantages and dynamic asset protection features. Other competing jurisdictions followed with similar amendments and, in 2012 the International Trusts (Amendment) Law was enacted, restoring the CIT as the most effective trust instrument in International Tax Planning, Asset Protection, International Succession & Estate Planning.
The Firm establishes and manages Cyprus International Trusts on behalf of foreign fiduciary & trust firms and HNWIs, attracted by the Founder’s experience and the benefits deriving from CITs.
Cyprus International Trust – Unique Benefits in Asset Protection
- Any issues pertaining to, inter alia, the validity, interpretation, amendment or administration of an international trust or a disposition to an international trust will be determined by the laws of Cyprus without regard to the laws of any other jurisdiction.
- It should be noted that, any inheritance or succession statutes in Cyprus or overseas shall not affect any transfer or disposition of assets or equally affect the validity of a CIT. The Trust consequently supersedes all local, foreign inheritance and forced heirship laws.
- The Amendments provide that no disposition to a CIT may be challenged on the basis that it contravenes the laws of another jurisdiction such as, any forced-heirship laws, forced succession laws or inheritance laws or mandatory provisions of family law or laws prohibiting or not recognising trusts.
- The trustees’ fiduciary powers and duties and the powers and duties of any protectors of the trust are exclusively governed by Cyprus law.
- The Settlor of the CIT may reserve powers unto himself to retain a beneficial interest in trust property or act as the protector or enforcer of the trust.
- Perpetuity: there is no limit on the period for which a trust may continue to be valid and enforceable and no rule against perpetuities and remoteness of vesting. As such, CITs may be established with unlimited duration.
To render Cyprus still more enticing, all succession taxes were abolished in 2000 and the CIT offers the following advantages in tax planning:
- Income: Only the income and profits of an international trust derived or deemed to derive from sources within Cyprus are subject to all taxes that are applicable in Cyprus, noting that dividends or interest received from Cyprus sources are not taxable. The beneficiary will not be taxed on any income derived from sources outside Cyprus.
- Dividends: Dividends or other income received by an International Trust from a Cyprus Company are neither taxable nor subject to withholding tax.
- Capital Gains: Gains on the disposal of the assets of an International Trust are not subject to capital gains tax in Cyprus. If the assets are situated in Cyprus then they are subject to Capital Gains Tax in Cyprus.
- Estate Duty: An International Trust created for Estate Planning purposes will not be subject to estate duty in Cyprus.
The Firm specialises in establishing and managing CITs, as well as advising on trust law, trustee duties, trustee liability, trust variation, resettlement and restructuring and in testament to Cyprus’ wealth friendly environment, foreign trust migration to Cyprus.
The Firm offers an in depth presentation on the Cyprus International Trust upon request.