Cyprus International Trusts

Discretionary trust

A Discretionary Trust is a trust whereby the Trustees have “discretion” about how to use the trust’s income and about how to distribute the trust’s capital. A Discretionary Trust is used in those cases whereby there is a need to protect the beneficiaries from taxation, as in that case the beneficiaries have no legal right on the trust until the trust funds are distributed to them by the Trustees.

Purpose/Charitable Trust

A Purpose/Charitable Trust is set up in order to advance a specific purpose. It is a trust that has no beneficiaries as it is usually set up for a charitable purpose. A purpose/charitable trust can be executed by the Settlor, his personal representatives or by an enforcer.

Fixed Trust

Another type of trust is a Fixed Trust, which does not give the trustee any discretion when distributing the assets to the beneficiaries. A Fixed Trust is usually set up as a way of preventing the Trustees from using their full powers in the way assets are distributed to the Beneficiaries as in that case the Trustees will have to follow the terms of the Trust.

Purpose Trusts

Private Trusts are expressly created by the settlor and can be created by deed, in writing, by will and, with some exceptions, orally. The intention of the settlor must be made absolutely clear. The beneficiaries have enforcement powers in respect of the trust.

Tax Benefits

Income, gains and profits from non-Cyprus sources are exempt from income tax, capital gains tax, special defense contribution or any other taxes in Cyprus. In addition, there is no estate duty or inheritance tax in Cyprus.

Anonymity

A CIT is not a public document. Furthermore, neither the Settlor nor the Beneficiaries will be the registered owner of any Trust Assets, a Trust arrangement can be regarded as highly confidential.

Asset Protection

A CIT is an effective way to protect assets from creditors and potential claimants, as the Settlor ceases to own the settled assets, but also from any claims based on a lack of recognition of the Trust, infringement of forced heirship rules, and a personal relationship with the Settlor, such as husband and wife.

No exchange control regulations are applicable to the CIT.

Legal Services

LLPO advises on the creation of Cyprus International Trusts, including proposing structure ideas for creating, managing and dissolving Cyprus International Trusts and draft all required legal documents.

The firm also advises the beneficiaries and trustees on issues arising in relation to a Cyprus International Trusts, trustee powers, beneficiary rights, interpretation of trust deeds and other trust related documentation.

The firm also represents the beneficiaries and trustees in court proceedings (contentious or not contentious).

Administration Services

We support and provide assistance in terms of logistics when setting up a Cyprus International Trust.

We also provide trustee, administration, management and other related services.