Characteristics
– The settlor is not a permanent resident of Cyprus.
– At least one of the trustees is resident in Cyprus at all times.
– No beneficiary other than charitable institutions are permanent residents in Cyprus.
– The trust property does not include any immovable property situated in Cyprus.

Benefits from the use of a Cyprus International Trust
– No formal registration is required.
– No taxation on any income, profits or capital gains of the trust.
– Complete freedom of the trustees to invest the trust funds subject only to the provisions of the trust deed.
– Trust profit is not subject to estate duty.
– Absolute confidentiality.
– Non-disclosure of information.

Power to transfer jurisdictions
– The law applicable to a Cyprus International Trust can be expressly changed to a foreign law, provided that this law recognises the validity of the trust and the respective interests of the beneficiaries.
– Conversely, a trust established in a foreign jurisdiction may, by its term, select Cyprus Law provided that the foreign law itself recognises such a change. This provision ensures flexibility, which may be important in the event of a change in government, fiscal or other policy which makes it beneficial to change a trust’s location.

Confidentiality
– Confidentiality is the cornerstone of the new law, which ensures that the trustee or any other person, including officers of the government and of the Central Bank of Cyprus, may not disclose to any person any information or document in relation to the name of the settlor or any of the beneficiaries, the consultations of the trustee regarding the exercise of his power, discretion of duties, the reasoning of such specific exercise of power, discretion or duties or the elements supporting the aforesaid reasoning, the exercise of the power, discretion or the performance of the duties of the trustee and the accounts of the International Trust.
– These non-disclosure provisions are critical because many jurisdictions cannot guarantee such confidentiality, or registration requirements necessitate disclosure of settlors or beneficiaries.

Protection of assets
– Assets may be placed in the trust to safeguard the interests of a beneficiary, e.g. sheltering the inheritance of a daughter from claims in case of divorce.
– Professional partnerships may also find that a trust assists in providing custody for personal assets and safeguarding them from loss through litigation.

Management, profit sharing and pension scheme
– Companies may provide pension schemes, benefit plans and profit sharing arrangements by using a trust with their employees forming the class of beneficiaries. The trust provides an effective method for grouping and sharing benefits and has the added advantage of being able to accommodate a rule book designed to suit each specific and individual circumstance.

Trust advantages and uses
– Individuals who have income arising outside the country of residence which they do not wish to remit to that country can arrange for such income to be remitted to the trustees of a settlement in another jurisdiction to be held in accordance with the trust deed and letter of wishes.
– Individuals with substantial assets outside their country of residence, which may in the future extend or change its control restrictions to include the remittance of overseas funds, may wish to retain flexibility by transferring these funds to the trustees of a settlement.
– Individuals wishing to divest themselves of personal liability can arrange those assets to be transferred to the trustees of a settlement and to be in accordance with the trust deed and letter of wishes.
– Persons expecting to leave one country to take up residence in another may obtain more financial advantage with regard to the new residence by placing the assets in a suitable settlement.
– Persons who wish to invest in businesses overseas but do not wish profits and dividends to be remitted to their country of residence, may set up a settlement to undertake the investment.

Validity of a Cyprus International Trust
– No foreign law relating to inheritance or succession will invalidate the trust
– The validity of the trust is not affected by the settlor’s bankruptcy or legal action by creditors unless it can be proved that the trust was made to defraud creditors, and an action is brought by them within two years of transfer of trust assets to the trustees.