The Cyprus International Trust is governed by The International Trusts Law passed in 1992. The main parts forming the Trust are the Settler, the Beneficiaries, the Trustees and the Protector.
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Settler:
The Settler is an individual or even a company (If permitted by its Memorandum and Articles) who by law is allowed to freely transfer assets to the trustee.
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Trustee(s):
The Trustee is an individual who is an adult and of sound mind, (or a corporate body, if authorized by its constitution), may be a trustee.
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Beneficiaries:
The Beneficiaries are any individual(s), including unborn persons, minors, and persons of unsound mind, or a corporate body can be the beneficiary. A settlor creating a trust may also be a beneficiary of that trust. A trustee can also be the beneficiary of a trust provided that he or she is not the sole trustee nor beneficiary as in that instance no trust would effectively exist.
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Protector:
The Protector may stipulate that the trustees consult a nominated independent third party before exercising any power of discretion, in order that this third party, or protector, can be satisfied that the assets of the trust and the duties of the trustees are being attended to in a satisfactory manner.
In order for a Trust to qualify as a Cyprus International Trust the following requirements need to be fulfilled:
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The settler is not a permanent resident in Cyprus;
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At least one trustee is a permanent resident in Cyprus;
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No beneficiaries are permanent residents in Cyprus; and
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The trust property does not include any immovable property in Cyprus
How does a Trust actually work? The Settler transfers the assets to the trustee who will have the responsibility to manage the trust’s assets as stipulated by the Trust Declaration. Also through the Trust document the beneficiaries of the Trust are nominated. The whole management of the Trust is monitored by the Protector(s) of the Trust. The Trust itself is not registered with any Government Departments and the only legal request for the trust to be probably executed is a on off payment of CYP 250 as stamp duties.
Use these links for more details on Cyprus and Lichtenstein Trusts.
Tax Benefits of a Cyprus International Trust:
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Income
All income whether trading or otherwise (i.e. Trust whose property is located and income is derived from outside Cyprus) is not taxable in Cyprus.
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Dividends
Dividends, interest or other income received by a trust from a Cyprus international business company are neither taxable no subject to any withholding tax.
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Capital Gains
Gains on the disposal of assets of an International Trust are not subject to Capital Gains Tax in Cyprus.
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Estate duty
An international trust created for estate duty planning purposes would not be subject to estate duty in Cyprus.
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Text Exemption
An alien who creates an International Trust in Cyprus and retires in Cyprus is still exempt from tax if all the property settled and the income earned is abroad, even if he is the beneficiary.
Our firm has extensive experience in the setting up of Cyprus International Trusts as well as in the maintenance and operations of the trusts. If anonymity is of paramount importance to the client then our firm through its subsidiary undertakings is in a position to act as a director of the Trustee Company. Fees are either agreed based on a fixed annual fee or based on the time required to manage the Trust.
For more information on Incorporation, administration as well as on our fees please contact us now.