The International Trust Law introduced in 1992 made a Cyprus International Trust a very attractive option to non-residents. The Law was upgraded in 2012.
It is possible to establish both fixed and discretionary trusts in Cyprus. Purpose trusts, asset protection trusts and other types of trust are also possible.
For a trust to qualify as an international trust, the following requirements must be fulfilled:
- The settlor must not be a permanent resident of Cyprus during the calendar year immediately preceding the creation of the trust.
- No beneficiary, other than a charitable institution, can be a resident of Cyprus during the calendar year immediately preceding the creation of the trust.
- At least one trustee must be permanently resident in Cyprus. Cyprus companies that are not resident are able to set up international trusts.
Reasons for Creating a Cyprus International Trust
- Trusts and beneficiaries of trusts are not taxed in Cyprus provided both the settlor and the beneficiaries are non-resident (or resident but not domiciled) and the trust property is not in Cyprus.
- A Cyprus international trust may be a shareholder in a Cyprus company and thereby enjoy the tax and other benefits of such companies
- The Law applicable to a Cyprus international trust can be expressly changed to a foreign law and an existing foreign trust can select Cyprus Law, if the foreign law itself recognises such a change.