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There are no formalities in setting up a Cyprus International Trust (CIT), and it can be done simply through a Deed of Settlement. There are however basic registration requirements which depend on whether the trustees of the Trust are licensed Cypriot Advocates or regulated service providers, which do not in any way affect the confidentiality of the beneficiaries or the settlor.

Protection of assets

The assets of a Cyprus International Trust are well protected. As an example of this protection is the fact that no claim can be made in case of the Settlor’s bankruptcy or liquidation, or in any action or proceedings raised against the Settlor unless it is proven that the transfer of the assets to the Trust was carried out with the intention to defraud the Settlor’s creditors.

Confidentiality

Confidentiality is invariably of paramount importance and is secured when the Cyprus International Trust is formed. The names of the persons indicated in the Trust are not disclosed to any public authority. This creates a strong advantage in comparison to jurisdictions where trust deeds are open to public for inspection.

Taxation

It is only when the Beneficiary is a Cyprus resident that both income sourced within the Republic, as well as from outside Cyprus is subject to taxation. There is no capital gains tax on the disposal of assets of a Trust (excluding Cypriot real estate), and there is no withholding tax on dividends paid out by a Cyprus International Trust to a non-resident beneficiary. 

Where the Beneficiary is not a Cyprus tax resident, only the income and profits of a Cyprus International Trust earned, or deemed to be earned from sources within Cyprus (other than dividends or interest received from Cyprus sources), are taxable.

Investment Capabilities

The trustee can to invest trust funds in any type of investments. The income is accumulated for the whole perpetuity period with no forced distributions.

Purpose of a CIT

A Cyprus International Trust is an excellent vehicle for holding assets where inheritance and succession planning is required, and where confidentiality is given paramount importance. With appropriate structuring and planning it provides maximum asset protection and flexibility, and is known as one of the most attractive trust legal frameworks in the world and a very powerful wealth management tool.

Our team of highly experienced professionals can advise you on establishing a Cyprus International Trust, with effective structuring, management and dissolution of a CIT, as well as all other legally related services. 

Source: Savva & Associates (S&A)