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The Cyprus International Trust has proved a very popular asset protection tool for wealthy individuals from Russia, and the other Central and Eastern European countries. The effected legislative amendments adopted in 2012 have further enhanced the attractiveness of the Cyprus international trust regime.
Our Law Firm is active in the Creation and Registration of Cyprus International Trusts and Foundations combined with trustee services.
Definition of the Cyprus International Trust
A trust is an equitable obligation, binding a person (called “trustee”) to deal with property held by him (called “trust property”, being distinguished from his private property) for the benefit of persons (called “beneficiaries”).Pursuant to the International Trusts Law of 1992, as it was amended in 2012, a Cyprus International Trust means a Trust in respect of which:
(a) The settlor, being either a natural or legal person, is not a resident of the Republic during the calendar year immediately preceding the creation of the trust;
(b) at least one of the trustees for the time being is a resident in the Republic during the whole duration of the trust; and
(c) no beneficiary, whether a natural or legal person, other than a charitable institution is a resident of the Republic during the calendar year immediately preceding the year in which the trust was created.
Cyprus International Trust – Tax benefits
(a) In case that the Trust has non-Cyprus tax resident beneficiaries, all non-Cyprus income whether trading or otherwise of an International Trust, is not taxable in Cyprus. Cyprus-source income and profits are subject to Cyprus tax.
(b) In case that the Trust has Cyprus tax resident beneficiaries, all Cyprus and non-Cyprus income is subject to Cyprus tax.
(c) Capital gains tax is levied in Cyprus only on disposals of real estate situated in Cyprus and, to the extent that the gain is derived from the real estate holding, on disposals of shares in companies holding real estate in Cyprus.
(d) There is no inheritance tax in Cyprus.
Main Uses of Cyprus International Trusts:
Confidentiality, via the holding of shares or other assets through the trustees,
Holding of property for minors, third persons or even the settlor;
Asset protection including protection of the settlor’s property when he is acting as a businessman or a contracting party;
Managing family wealth;