The International Trusts Law 69(I) was enacted in 1992, and subsequently amended on 23 March 2012, the Law regulates the establishment and administration of trusts and is designed to complete the spectrum of services the island offers as financial center.
Cyprus International Trusts enjoy important tax advantages and they provide significant tax planning possibilities:
Anyone wishes to keep the ownership of a company anonymous and confidential, can do this by setting up a Discretionary Cyprus Trust to own the shares in the company;
Maintaining funds overseas
An individual, who wishes to invest in business overseas and want to ensure that the profits received are not remitted to the country of his residence may create a Cyprus International Trusts to invest in overseas business
Favourable legal system
Strong legal system based on English Common law
No exchange control
Cyprus International Trusts are not subject to exchange control. The absence of exchange control restrictions and the availability of professional international banking services, make Cyprus a convenient base for the remittance and transfer of funds
Trusts are set-up in full discretion and anonymity. Any information regarding the trust will only be disclosed in the event of a court order.
Relocation of Cyprus International Trust
International Trusts Law allows the removal of an International trust from Cyprus and vice versa
Global Estate Planning
An individual, through the use of a trust, can arrange for it to be inherited by persons, who due to the legislation of the individual’s country, would otherwise be excluded from the inheritance
There is no estate duty or inheritance tax in Cyprus.
A Cyprus International Trust may be used to protect assets and will not be void or voidable in the event of the settlor’s bankruptcy or liquidation. The Cyprus International Trust may be set aside by the settlor’s creditors if it is proven to the satisfaction of a Cyprus court that the Cyprus International Trust was made by the settlor with the intent to defraud his/her creditors
Stability and Management services
Cyprus offer political and economic stability and high quality services provided for the operation of a trust;
Income, gains and profits from sources outside of Cyprus are exempt in Cyprus from income tax, Capital Gains Tax (CGT), Special Defence Contribution (SDC) or any other taxes.
Worldwide income, profit and gains are taxable in Cyprus only where the Beneficiary is a tax resident of Cyprus. Beneficiaries who are non-residents of Cyprus are taxed only on the income derived in Cyprus.
Dividends, interest or royalties received by a trust from a Cyprus international business company are not taxable and not subject to withholding tax.
Capital gain Gains on the disposal of assets of an International Cyprus Trust are not subject to capital gains tax in Cyprus.
Because of its favourable tax regime and its wide network of double treaties, Cyprus holds an important position in international tax planning.
Our firm is prepared to explain advantages enjoyed by Cyprus International Business Companies (IBCs) and to describe how such entities may be incorporated and operate in Cyprus.