Cyprus International Trusts
The Cyprus International Trust
Through the Cyprus Trust, estate planning and asset protection receive the most tax benefits. With the enactment of the recently passed Cyprus International Trust Law, Cyprus is ranked first in International Trust jurisdictions. What are the primary advantages to the Cyprus International Trust?
- Successfully decreases tax obligations
- Modifies the transference of assets upon death
- Eliminates delays in probate
- Protects assets from creditors
A trust is eligible to qualify as a Cyprus Trust under the Cyprus International Trust as amended in cases where:
- Neither the settlor nor beneficiary was a Cyprus resident in the year preceding the year of creation of the trust;
- At least one of the trustees is a permanent Cyprus resident.
Cyprus International Trust Tax Features
There are numerous tax benefits the Cyprus Trust has to offer to interested persons. What are some of these advantages?
- Capital Gains – Gains from the disposal of assets of a Cyprus Trust are exempt from a capital gains tax.
- Dividends, Interest – Withholding taxes are not applied to royalties, interest, or dividends, or other income received by a Cyprus Trust from a Cyprus Company.
- Estate Duty – No estate duties are applied to a Cyprus Trust when set up for estate duty planning reasons.
- Income – All Cyprus Trust income is tax-exempt.
Other Advantages
- Any matters or differences concerning the Cyprus Trust are subject to Cyprus laws without any interference from other jurisdictions, ensuring legal certainty for dispute resolution.
- International trust with a “choice of law clause” that favors Cyprus law has complete protection from unsubstantiated foreign judicial claims pertaining to public policy and order.
- Trust reserved powers remain in the hands of the settlor. The trust must stipulate the trustees’ powers and when they are to be used.
- The settlor and the beneficiaries or any of them are eligible to become Cyprus residents.
- A trust remains valid with no time limit imposed.
- Trustees hold similar investment powers as those of an absolute owner, enabling them to make investments that benefit all listed beneficiaries.
- Trustees are permitted to invest in movable and immovable property throughout Cyprus and internationally, including shares in Cyprus-incorporated companies.