Whether you want to safeguard the education fees of your children, protect assets from creditors, or ensure future security for yourself and your family – a well-managed trust can help preserve wealth for generations.
Grounded on our experience and backed by in-depth wealth diagnostics, we take an integrated yet personalised approach that allows long-term, bespoke returns over time. By thinking ahead of time and looking beyond numbers, we can mitigate your overall tax liability and plan for the long term.
Regulation
Governing Law:
- A Cyprus International Trust (CIT) is governed by the Cyprus International Trusts Law of 1992 (as amended) to modernize the concept of trusts in Cyprus and attract high-net-worth individuals.
Trustee Licensing:
- Trident Trust Company (Cyprus) Ltd. is licensed in Cyprus to act as a trustee under the Law Regulating Companies Providing Administrative Services and Related Matters of 2012 (as amended).
Stamp Duty:
- A CIT is subject to a stamp duty of €430. If the trust deed is stamped more than 30 days after the trust’s creation, a late payment penalty applies. The penalty amount depends on the delay duration.
Anti-Money Laundering Compliance:
- On 23 February 2021, Cyprus incorporated the 5th Anti-Money Laundering EU Directive 2018/843 into its domestic legislation by amending the Prevention and Suppression of Money Laundering and Terrorist Financing Law 188(I)/2007.
- This amendment established a register of beneficial owners of express trusts and similar legal arrangements, administered by the Cyprus Securities and Exchange Commission (CySEC), which supervises Trident Cyprus.
Requirements
In order to qualify as a CIT the below statutory requirements must be met.
- The settlor is not a permanent resident of Cyprus during the year preceding the year of establishment of the trust.
- The beneficiaries are not permanent residents of Cyprus during the year preceding the year of establishment of the trust, but relocation to Cyprus the year after the establishment of the trust is permitted.
- At least one trustee is a permanent resident of Cyprus.
Benefits of Cyprus International Trust (CIT)
Asset Protection
- CITs protect assets from being void or voidable in the event of the settlor’s bankruptcy or liquidation, unless proven to be fraudulent.
Preservation of Wealth
- Ensures long-term management and gradual distribution of family wealth to children and grandchildren, without burdening them with management responsibilities.
Taxation
- Income, gains, and profits from non-Cyprus sources are exempt from various taxes in Cyprus.
- Worldwide income is taxable in Cyprus only if the beneficiary is a Cyprus tax resident; non-residents are taxed only on Cyprus-sourced income.
- Dividends received by a CIT are not taxable and not subject to withholding tax.
- No estate duty or inheritance tax in Cyprus.
Asset Planning
- Assets can be added to the CIT at any time, remaining separate from the settlor’s personal assets.
- The trust property can include immovable property in Cyprus and assets worldwide.
- CIT can be a shareholder in Cyprus or foreign companies.
Proper Law of the CIT
- Validity and administration of a CIT are subject to Cyprus law if chosen as the governing law, without reference to foreign legislation.
- Trust assets and dispositions cannot be challenged based on foreign jurisdiction laws.
Reserved Powers
- Certain powers can be reserved to the settlor, ensuring the trustee’s legal discretion remains uncompromised.
- A protector may be appointed to oversee trustee activities and provide comfort to the settlor and beneficiaries.
How can CX Financia help?
As a company with multi-asset capability and a fiduciary mindset, we offer solutions that are tailored to your goals and can deliver strong returns with controlled risk.
Our full suite of trustee services includes:
- Review of the trustee services you require and establishment of the trust
- Setting up private trustee companies (PTCs), beneficial for family trusts of High Net – Worth Individuals who wish to have a separate and exclusive trustee for their trusts.
- Advising clients and trustees on issues and deficiencies arising concerning trusts under Cyprus Law, trustee powers, beneficiary rights, interpretation of trust deeds, and other trust-related documentation
- Drafting and review of trust settlements, deeds, and declarations.
- Provision of trustee & protector services
- Day to day management and administration of trusts
- Preparation of proper books of account for the trust
Trusts are traditionally a powerful estate planning tool that can ensure assets are immediately available for the next generation without the delays and complications of a formal probate procedure.
Would you like to discuss your wealth planning requirements with an expert?
From Investment Firms to Wealth Management companies, we’re working with clients around the globe to help them prepare, manage and optimise their trusts.