Cyprus is an international financial centre with very broad advantages for setting up and operating a trust that cannot be found concentrated in other trusts jurisdictions. The International Trusts Law of Cyprus builds on the well established English principles of equity and trusts and has created one of the most attractive trusts legal frameworks in the world.
The main legal framework governing trusts in Cyprus is a combination of English Law i.e. the Principles of Equity and Statute Law i.e. The Trustees Law of Cyprus (Cap 193), which, is modeled on the English Trustee Act of 1925 and the International Trusts Law of Cyprus (Law 69(I) of 1992 as amended by Law 20(I)/2012). The CIT has undergone major reform and the new law introduced in early 2012 (Law 20(I)/2012, which amends the 1992 law) is said to have transformed the Cyprus trust regime into the most modern and favourable trust regime in Europe.
The new legislation aimed to provide maximum protection and flexibility to trust structures. At the same time excellent professional services and support infrastructure are available locally at comparatively low cost. CITs become more workable, accessible and effective as it is founded on much greater certainty, clarity and stability.
One of the major advantages of Cyprus International Trusts is that they are exempt from taxation, i.e. income, gains and profits from non-Cyprus sources are exempt from income tax, capital gains tax, special defence contribution or any other taxes in Cyprus.
Under the current law, a trustee for an international trust or offshore trust can be either a local trust company or an international private trustee company, or an international professional trustee company. An International Trust can also be charitable. Bearing in mind the tax benefits, International Trusts can be seen as a device for protecting the assets of a foreign settlor from inheritance or other taxes imposed in his home country.
Our law firm drafts instruments creating both international and local trusts and provides legal assistance concerning the management of trust companies, including trustee services.