Set up a Cyprus Trust to Secure your Wealth
Discover the robust advantages of the Cyprus International Trusts for asset protection, tax efficiency, and succession planning. With legal roots based in English trust law and enhanced by modern amendments, Cyprus Trusts offer unparalleled flexibility and security for individuals, families, and businesses.
See below the Cyprus Trusts’ main benefits, who it is for, the different types of trusts available, and the process of setting up the trust.
Benefits of Cyprus Trusts:
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Safeguard your assets for the future;
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Increase your privacy;
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Improve tax outcomes;
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Tailor your inheritance to your plans;
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Secure your assets for generations.
Who is the Cyprus Trust for?
Cyprus International Trusts are ideal for:
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Families: Ensure smooth wealth transfer and protect inheritance from legal disputes.
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High-Net-Worth Individuals: Preserve and grow wealth with confidentiality and tax efficiency.
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Business Owners: Simplify asset ownership, ensure business continuity, and protect assets from external risks.
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Investors: Leverage a trust for diversified investment holdings, including real estate, equities, and alternative assets.
Design Your Enduring Wealth Strategy with the Cyprus Trust
Cyprus Trusts safeguard assets through the separation of legal and beneficial ownership. The assets held in such a trust are protected from being voided or claimed in cases of the settlor’s bankruptcy, liquidation, or legal actions against them.
Creditors can challenge the trust only if they provide sufficient evidence to the Cyprus courts proving that the trust was established with the deliberate intent to defraud them. Such claims must be made within two years from the date the assets were transferred to the trust, with the burden of proof resting on the creditors.
Cyprus Trusts protect your financial future. They shield your assets from creditors, inheritance claims, and judicial or administrative decisions based on foreign law.
Flexible Inheritance Planning
Cyprus International Trusts offer substantial advantages for succession planning. Their validity and the transfer or disposition of assets under the trust are not subject to the succession or inheritance laws of Cyprus or any other jurisdiction.
The trust is immune to forced heirship rules, granting the settlor complete discretion over how their assets are distributed among heirs.
Improve Tax Outcomes
Cyprus trusts maximize tax efficiency because beneficiaries not resident of Cyprus are only taxed on income and profits from Cyprus sources.
Even then, trusts enjoy Cyprus's low 12.5% corporate tax rate and exemptions on dividends, interest, and capital gains for non-residents.
Trust structures are respected internationally, and assets in Cyprus benefit from the country’s broad network of double tax treaties.
Plan for Perpetuity
Trusts potentially exist indefinitely, with no restriction on the type or location of assets. To have an unlimited duration and may be structured as irrevocable.
To establish an irrevocable trust, the following conditions must be met:
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The settlor and beneficiaries must not have been permanent residents of Cyprus during the calendar year preceding the trust's creation.
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At least one trustee must remain a permanent resident of Cyprus throughout the trust's existence.
The Cyprus Trust Deed
The Cyprus legal framework permits settlors to create a trust that reflects their unique objectives by allowing them to write their own trust deed.
The trust deed establishes the rules governing the trust, and its registration does not require public disclosure or submission of the document, ensuring confidentiality.
Additionally, the settlor can enhance the trust's security by appointing a protector. The protector has authority to limit the trustee’s ability to exercise certain powers without their approval.
Cyprus Trust Variations
Settlors of trusts are free to design the ideal solution for themselves and their families. The following trust variations exits:
Charitable Trusts
These trusts are established for charitable objectives as defined by law. The trust deed must clearly outline its charitable purposes and appoint an enforcer to ensure compliance with its terms. The enforcer must be independent of the trustees. Although not mandatory, beneficiaries can be added to non-charitable purpose trusts after their formation.
An International Trust shall be deemed charitable if its main purpose is to achieve one of the following: the prevention or relief of poverty; the advancement of education, religion, health, or the saving of lives; the promotion of citizenship or community development; the advancement of the arts, culture, heritage, science, or amateur sport; the protection of human rights, conflict resolution, reconciliation, or the promotion of religious or racial harmony, equality, and diversity; the advancement of environmental protection or improvement; the relief of those in need due to youth, age, ill health, disability, financial hardship, or other disadvantages; the promotion of animal welfare and protection; or any other purpose beneficial to the public in general or reasonably related to the aforementioned categories.
Trusts for a purpose or ‘purpose trust’
a) Trust with beneficiaries certain individual(s) or legal person(s) readily ascertainable or not; and
b) Trust with beneficiaries the whole of certain individual(s) or legal person(s) which are ascertained with reference to some personal relation or affinity
Recoverable Vs Irrecoverable Trusts
Revocable trusts allow the settlor to alter the beneficiaries as long as they are mentally and physically capable of making such changes. With an irrecoverable trust, once assets are transferred into the trust and beneficiaries are designated, the arrangement is permanent. The trust becomes the legal owner of the assets, and the settlor no longer retains control over them.
Discretionary Trusts
Discretionary trusts are widely used due to their adaptability. Trustees have broad authority over how the trust's funds are invested and distributed. Decisions on who benefits, when, and how much they receive rest entirely with the trustees. While not legally binding, the settlor can provide a letter of wishes to guide the trustees in their decisions.
Interest in Possession Trusts
This type of trust grants a beneficiary the immediate right to the trust's income, often referred to as a "life interest." The trustee collects income but must pass it on to the beneficiary after deducting expenses. Additionally, the trust must include a "remainderman," who is entitled to the capital when the life interest ends.
Life Interest or Fixed Interest Trusts
These trusts are designed to provide specific benefits—such as income or capital—to a chosen beneficiary for a defined period, such as during their lifetime or until a particular event occurs (e.g., marriage or reaching a certain age). Once this period ends, the trustees distribute the remaining assets as instructed by the settlor. Trustees do not have discretion over asset distribution.
How to Set Up a Trust in Cyprus
Setting up a trust starts with defining the trust’s assets, beneficiaries, trustees, and duration. You can appoint a protector to oversee trustee actions if desired. Then, you transfer the assets to the trust.
Important Step of the Incorporation Process
1. Select a name you want for a Trust in Cyprus.
2. After registration with the Cyprus Bar Association, the Trust is issued a registration certificate.
3. Once the Cyprus Trust Deed is finalized, it undergoes stamping at the tax office.
4. The Trustee is responsible for managing the Trust's bank account in Cyprus in accordance with the directions provided by the Settlor or Beneficiary.
5. A Cyprus Trust can be established with a minimal initial gift of as little as 1 euro from the Settlor.
6. The Trust is capable of holding various types of assets, including company shares, bank deposits, and real estate, all of which are registered under the Trustee’s name.
7. The entire process of registering a Trust in Cyprus typically takes around 2 to 3 weeks.
The Oneworld Advantage
Oneworld Ltd which employs a team of 75 professionals and corporate administrators provides incorporation, fiduciary, management, banking, accounting, redomiciliation services, as well as setting up and administering private funds and trusts.
We advise on tax planning, incorporate and administer companies in zero and low tax jurisdictions and provide boutique services including citizenship and residency services.
Oneworld ltd is licensed by CySEC (license 146/196) as an ASP (Administrative Service Provider).
With decades of expertise in trust administration, Oneworld ensures your trust is managed with precision, discretion, and professionalism.
Our Services Include:
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Drafting and registration of trust deeds.
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Trustee services through Oneworld Trustees Ltd or a private trust company
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Comprehensive asset management, including guidance from One Plus Capital on investments
Start today
Start your journey toward secure, tax-efficient wealth management with a Cyprus International Trust.
Contact Us Now for a personalized consultation and comprehensive trust services, or fill in the direct contact form below.
Frequently Asked Questions
1.What is a Cyprus International Trust, and how can it serve your needs?
A Cyprus International Trust (CIT) offers exceptional protection for your assets, ensures privacy, and provides tax advantages, all while allowing you to effectively manage and allocate your wealth.
2.Who are the primary participants in a Cyprus International Trust?
The key roles in a CIT include the Settlor, who creates the trust; the Trustee, who oversees its management; the Beneficiaries, who gain from it; and optionally, a Protector, who ensures the Trustee operates within the trust's guidelines.
3.How much time is needed to establish a Cyprus International Trust?
Setting up a CIT typically takes approximately two weeks, including the necessary registrations with relevant authorities, such as the Cyprus Bar Association and Securities and Exchange Commission.
4.What types of assets can be included in a Cyprus International Trust?
CITs can hold a variety of assets, including real estate, shares, bonds, and other investments, whether based in Cyprus or abroad.
5.Who can create a Cyprus International Trust?
Any individual who has not resided in Cyprus during the year before the trust’s formation is eligible to establish a CIT, making it an ideal choice for international asset protection.
6.What are the tax benefits of a Cyprus International Trust?
CITs enjoy several tax advantages, including exemptions from taxes on foreign-sourced income, inheritance taxes, and capital gains taxes, making them a highly efficient option for tax planning.
7.What are the trustee obligations for a Cyprus International Trust?
At least one trustee must be a permanent resident of Cyprus, ensuring compliance with local regulations and maintaining the trust’s international validity.
8.Is it possible for the settlor to also benefit from the trust?
Yes, the settlor can be named as a beneficiary in a CIT, offering flexibility and allowing them to enjoy the advantages of the trust assets.
9.How is confidentiality maintained for a Cyprus International Trust?
Cyprus law enforces strict confidentiality rules for CITs, with information accessible only to authorized government bodies under specific circumstances.
10.How long can a Cyprus International Trust operate?
There is no time limit on the duration of a CIT, allowing it to provide benefits for generations to come.
11.How can you ensure compliance with legal standards?
Our legal team ensures your CIT meets all relevant local and international laws, guaranteeing that the trust is both effective and fully compliant. Schedule a call with our experts
12.What laws apply to the Cyprus International Trust?
Cyprus Trust Law draws its foundation from the English Trustee Act of 1925. In July 1992, Cyprus introduced The International Trusts Law (Law No. 69/1992), establishing the framework for creating and managing Cyprus International Trusts. This law was further updated on March 23, 2012, with the enactment of the Cyprus International Trust (Amending) Law of 2012.
The Cyprus International Trusts regime enables Cyprus non-tax residents to create a Cyprus Trust and enjoy the highest degree of asset protection and create estate planning internationally along with numerous tax benefits and high level of confidentiality.
The definition of a Cyprus International Trust (CIT) has become more flexible:
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allows the settlor / beneficiary to become a Cyprus resident as long as neither the settlor nor the beneficiary take up residence during the calendar year preceding the year the trust was set-up the previous restriction on investment in immovable property in Cyprus has been lifted. It is now possible for the trust property to include real estate in Cyprus at least one of the trustees, during the whole duration of the trust, is a permanent resident of Cyprus.
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A trust can still qualify as a CIT for the purposes of the law even if the settlor, trustee or the beneficiaries are Cypriot companies or partnerships. In fact this provides unique opportunities for a wide range of investors.
A trust is established by an individual (the Settlor) and is a means whereby property (the Trust Property) is held by one or more persons (the Trustees) for the benefit of another or others (the Beneficiaries) or for specified purposes. The Settlor can be a Trustee and the Settlor and the Trustees or any of them can be Beneficiaries. A Protector who can be the Settlor may be appointed to oversee the work of the Trustee.
In law, the Trustees are the owners of the trust property, although they may not deal with it as absolute owners but rather in accordance with the provisions of the law relating to trusts and the rights of the beneficiaries as set out in the trust documents. In other words, the trustees are under a binding obligation to deal with the trust property in accordance with the law and the directions set out in the trust document.
The latest amendments to the International Trust Law adopted in March 2012 have enhanced the efficiency and competitiveness of CITs as an asset management and investment tool.
International trusts are governed by the local trust law and are not taxed in Cyprus. If the beneficiary is not a Cyprus resident, only the income earned and the profit made from sources in Cyprus are subject to Cyprus tax laws.
CITs enjoy important tax advantages providing significant tax planning opportunities to interested parties. The following tax privileges are indicative of the possible options for tax minimization:
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all income, whether trading or otherwise, of a CIT (ie a trust whose property is located and income is derived from outside Cyprus) is not taxable in Cyprus
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dividends, interest or other income received by a trust from a Cyprus company are also neither taxable nor subject to withholding tax provided that the beneficiaries are not tax residents in Cyprus. Even though a trust with shares in a Cypriot company may not be a CIT, the exemption relies on the fact that Cypriot tax is imposed only on Cyprus residents. As the beneficiaries are not residents of Cyprus, no tax is imposed on the distributions made to the trust
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gains on the disposal of the assets of a CIT are not subject to capital gains tax in Cyprus
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an alien who creates a CIT 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 a beneficiary
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a CIT created for estate duty planning purposes would not be subject to estate duty in Cyprus
Local trusts ie trusts under which either the settlor or any beneficiary is a Cypriot resident, will still be treated as transparent vehicles for income tax purposes. In the case of Cypriot offshore trusts, provided that no local profit is included, no Cypriot tax will be levied on their income, capital or distribution.