траст на КипреIn Cyprus, the first International Trusts Act was adopted in 1992. In 20 years, in 2012, a number of changes were introduced into this law. Initially, under the International Trusts Act of 1992, when creating an international trust in Cyprus, its beneficial owner and founder must be residents (this allowed them to be controlled by the Cypriot tax authorities).

But this definition entailed many inaccuracies for the beneficial owners who are non-residents wishing to settle on the island, which was amended by the changes introduced into the law.

At the moment it is allowed that the founders and beneficial owners of international Cyprus trusts may not be residents of Cyprus within a period of up to one year at the time of establishment of the trust and this provides them with the opportunity to settle on the island after the establishment of the trust.

Another important advantage for trust founders in Cyprus is that it is enough to have only one resident manager on the Cyprus island for the entire period of existence of the trust.

Cyprus Trust Registration

The law of Cyprus is considerably loyal to registration of trusts. It is enough to register the relevant documents on the establishment of the trust, in which they will put a stamp on mandatory (so-called stamp) fee in the amount of 427 €, and the tax service does not retain any copies of the documents.

To register a trust in Cyprus, contact Law&Trust International. Our lawyers have already been working in this direction for several years and will help you to save time.

Period of existence of the international trust

Under the 1992 Law, the term of existence of the trust was 100 years, and such types of trusts as targeted/special uncharitable and charitable trusts could operate without a time limit. Changes in legislation in 2012 canceled restrictions on the terms of existence of trusts and removed mandatory execution of the trust.

How does the legislation work?

Under the International Trusts Act, all disagreements that may arise on the rights of an international trust established in Cyprus must be resolved according to the current Cypriot legislation without involving other foreign states.

The law also provides for the impossibility of influencing the validity of the trust, the transfer or disposal of its assets by the inheritance law valid both in the jurisdiction of any country, and in the Republic of Cyprus itself, which is an additional protection of trust assets.

Cyprus law does not recognize the applicable legislation of any other country on the recognition of a trust as invalid, contestable or either prohibition or non-recognition of the concept of the trust. For the same reason, the rights of claim, inheritance rights, property rights or obligations imposed on any person by the beneficial owner or the founder or by right of inheritance will not be recognized in Cyprus.

Regardless of the laws of Cyprus or other countries, an international trust can not be declared invalid or canceled due to its bankruptcy, the liquidation of the founder or the claim from creditors against it. Creditors of the founder have the right to challenge the trust only after the evidence provided to the court of Cyprus about the deliberate concealment of property in the trust.

After the evidence in the court of this intent that is entrusted on the creditors, applications for claims against the assets of the trust are taken within two years.

Rights of the founder of an international trust

The new law retains for the founder any rights and powers, and this does not affect the validity of the trust. Currently, the founder has the following powers:

- Cancel or change the conditions of the trust;

- Give instructions on the disposal or dispose of the trust of the trust or its property;

- Act as a director (official) or to appoint/dismiss the foregoing;

- Send instructions to a trust manager on the disposal of the property of the trust, which will be binding for execution for him;

- Prescribe and revoke the powers of beneficial owners, trust managers, protectors, investment managers and consultants;

- Change the place of jurisdiction of the trust or the applicable law;

- Make restrictions on the rights and powers of the trust managers and require them to agree on all their actions with the founder.

What is prescribed in the Privacy Law?

Considerable importance in the law is given to confidentiality. According to the Law, only the beneficial owners can familiarize themselves with the reporting of the trust. And no one has the right to oblige to provide information or documents both on the accountability or reporting of the trust or its property, and with respect to the trust manager, his duties, beneficial owners, founder, etc.

But confidential information regarding the trust can be disclosed by court decision in the course of proceedings, if this circumstance will be crucial in the investigation of a criminal or civil case.

Taxes for the trust in Cyprus

Both the 1992 Law and the version of the Law of 2012 provide for a preferential tax treatment for international trusts. The law establishes a uniform system of taxation for the beneficial owners. The beneficial owners who are residents are subject to all types of taxes set by Cyprus law, and only income and profit taxes that are received on the island of Cyprus are valid for non-residents.

The legislation also applies to international trusts. The Cyprus International Trust is not subject to taxation if its beneficial owners are non-residents of Cyprus, and the income is received outside the island. Provision of tax reporting by trust in any public authorities of Cyprus is not provided.