Our company formation agents explain how you can set up various types of trusts in Cyprus and the advantages deriving from these efficient tax and estate planning tools. You can rely on us for assistance in opening a trust here.
| Quick Facts | |
|---|---|
| Availability of specific legislation (YES/NO) | Yes, the International Trusts Law and the Trustee Act. |
Possibility to create more than one type of trusts (YES/NO) | Yes, there are various types of trusts that can be created in Cyprus. |
Setup options | – trust deed creation, – will, – company formation in Cyprus. |
| Possibility to use a Cypriot trust as an investment vehicle (YES/NO) | Yes. |
| Can companies open trusts in Cyprus? | Yes, the settlor can also be a legal entity. |
| Can foreign citizens create Cypriot trusts? | Yes, foreign citizens can also establish trusts in this country. |
| Special requirements for foreign settlors (if any) | No. |
| Requirements to create international trusts | The settlor must not be a Cypriot resident. |
| Possibility to appoint foreign beneficiaries (YES/NO) | Yes, it is possible for the assets to be left to foreign beneficiaries. |
| Special requirements for the appointment of trustees in international trusts (if any) | The trustees must be Cypriot residents. |
| Registration authority | The Cyprus Bar Association. |
| Registration timeframe | Approx. one month. |
| Possibility to create trusts with a limited duration of life (YES/NO) | Yes, it is possible to create such trusts. |
| Are Cypriot trusts subject to taxation in Cyprus? | Yes, they may be liable for the VAT and stamp duties for various transactions. |
| Support in setting up a trust in Cyprus (YES/NO) | Yes, you can rely on our local specialists for support in creating a trust. |
Table of Contents
What are the conditions to open a trust in Cyprus?
There are several requirements to meet upon the creation of a Cypriot trust, as follows:
- the participants in the trust must be appointed in the creation deed;
- the assets must also be disclosed in the document;
- a trustee must be appointed to administer the respective assets in accordance with the wishes of the settlor;
- the trust must be registered with the Trust Registry, which is administered by the Cyprus Bar Association.
Can I also set up a trust in Cyprus if I am a foreigner?
Yes, you can. This is one of the main advantages of setting up a trust in Cyprus.
Is trust creation available for natural persons only in Cyprus?
No, it is also possible for legal entities to establish trusts in Cyprus. However, specific information must be disclosed upon registration. Our local agents can offer the necessary details in this sense.
What are the main ways to create a trust in Cyprus?
Investors who want to open a trust in Cyprus have the following options:
- open a trust through a trust deed or a will;
- incorporate a Cypriot company or partnership;
- incorporate a Cypriot subsidiaryor branch;
- set up an international trust.
Here is also an infographic on this topic:
What are the steps to open a trust in Cyprus?
The following:
- select the type of trust;
- appoint the trustee;
- create the trust deed (it is advisable to do that with the help of a Cypriot lawyer);
- pay the stamp duty with the local tax department;
- transfer the assets to the trustee;
- register the trust with the appropriate authority, depending on its type.
What are the parties in Cyprus?
The trust is a specific entity that depends on the existence of specific participants, namely:
- the settlor, who is the creator of the trust, can be a natural person (Cypriot or foreign citizen) or a legal entity;
- the beneficiary or beneficiaries who will inherit the assets established in the trust creation deed;
- the trustee, who will administer the assets until they can enter the possession of the beneficiaries.
What are the available types of trusts in Cyprus?
Here are the main types of trusts to create in Cyprus and their characteristics:
- charity trusts which, as the name states, can be used for non-profit or social purposes;
- discretionary trusts in which the trustee decides how the beneficiaries enter into possession of the goods they are entitled to;
- fixed trusts in which the settlor decides how the assets are distributed;
- protective trusts in which the settlor transfers the assets to the trustee until the beneficiaries have the mental capacity to receive them.
In addition to these, international trusts are also recognized in Cyprus.
What types of assets can I put in a Cypriot trust?
You can put real estate, money, works of art, company shares, jewellery, etc.
Can I put real estate that is not located in Cyprus in a trust?
Yes, you can.
Are there any specific requirements when appointing the trustee?
Yes, at least one of the trustees must be a Cypriot resident. From this point of view, you will find many professionals in this field.
What are the conditions to establish an international trust in Cyprus?
The following:
- the settlor must not be a Cypriot permanent resident at least one year before creating the trust;
- the beneficiaries must not be Cypriot permanent residents for the same one-year period before the establishment of the trust.
We also have a video on the main reasons to create a Cypriot trust:
What are the tax benefits of a trust in Cyprus?
The main tax advantages for opening a trust in Cyprus are:
- good taxation regime and tax rate of 0% to 35% if the beneficiary is a non-resident;
- no capital gains on the disposal of assets of a Cyprus International Trust;
- no withholding tax on dividends paid by a Cypriot trust.
With respect to the taxes to be paid by trusts, they can be liable for:
- the VAT which applies at a rate of 19%;
- stamp duties ranging from 0.15% to 0.20%, depending on the value of the transaction, with a maximum amount of EUR 20,000.
Also, our professionals will assist you with company registration in Cyprus.
How long does it take to set up a trust in Cyprus?
It takes between 2 and 6 weeks, depending on the registration requirements.
What is the duration of a trust in Cyprus?
The trust can be created for an indefinite period.
Can Cypriot trusts be amended or revoked?
Yes, both options are available.
For detailed information about trust formation in Cyprus, you can contact our experts. Our Cypriot company formation specialists will be able to help you with various matters.