Set up a trust in Cyprus

Since 1992, when Cyprus enacted The International Trusts Law, Cyprus has been providing a favourable jurisdiction for the creation of international trusts

Cyprus International Trusts are widely used as a vehicle for international tax planning, mainly due to the fact that they offer various and important tax advantages.

The advantages that such a Trust renders include the fact that Income and gains of a Cyprus International Trust, derived from sources outside Cyprus are exempted from any tax imposed in Cyprus under certain conditions.

Furthermore dividends, interest or other income received by a Trust from a Cyprus international business company are not subject to tax nor are they subject to withholding tax.

In addition no capital gains tax is charged on the disposal of assets of an international Trust, while there is exemption from taxation in the case of an alien who creates an International Trust in Cyprus and retires in Cyprus under certain conditions.

According to the International trusts Law of 1992 a trust qualifies for a Cyprus International Trust where, the settlor is not a permanent resident of Cyprus, at least one trustee is a permanent resident of Cyprus, no beneficiaries (other than a charitable institution) are permanent residents of Cyprus and the trust property does not include any immovable property in Cyprus.

In principle, no formalities are required for the creation of a trust in Cyprus. Moreover there is no registration or reporting requirements for trusts established in Cyprus. However trusts are created usually (but not necessarily) in writing. The instrument establishing the trust must satisfy the classic requirements of the three “certainties”: certainty of intention, subject-matter and objects. Therefore the Instrument of Trust must include provisions manifesting intention to create a trust, specifying the trust fund and ascertaining the beneficiaries.

Democritos Aristidou & Co, can offer all related services regarding the establishment of a Cypriot International Trust.