"May be the most modern and favourable trust regime in Europe"
Setting up a Cyprus International Trust – Qualification criteria
A trust is considered as Cyprus International Trust, if the following criteria are met:
- the Settlor (i.e. the creator) and the beneficiaries must not be tax residents in Cyprus during the year preceding the year in which the trust was set up. After the establishment of the Trust, they may relocate to Cyprus.
- at least one of the trustees should be a Cyprus tax resident for the whole duration of the Trust
- the Trust property may include all kinds of assets situated in the world but may not include any immovable property in Cyprus.
Tax benefits
- A Cyprus International Trust is not subject to tax in Cyprus and may not register to the Cyprus Tax Authorities, unless it holds immovable properties in Cyprus.
- All income received by a Cyprus International Trust from non-Cyprus sources is not subject to tax in Cyprus.
- Dividends, Interest and Royalties received by a Cyprus International Trust from a Cyprus Tax resident company are not subject to tax in Cyprus, neither to any withholding tax.
- Profits on the disposal of the assets held by a Cyprus International Trust are not subject to Capital Gains Tax in Cyprus, unless the assets include immovable property in Cyprus.
- A Cyprus International Trust may not be subject to estate duty or inheritance tax in Cyprus.
- If the beneficiaries of the Cyprus International Trust will remain non Cyprus Tax residents, then are taxed only on Cyprus sourced income in accordance with the Cyprus tax law. On the other hand, if the beneficiaries will become Cyprus Tax residents, then their worldwide income is taxable in Cyprus.
Non-Tax benefits
- A Cyprus International Trust can be used for asset protection, for estate planning and for anonymity.
- The duration of the Trust could be indefinite.
- A Cyprus International Trust could be the ideal solution for high net-worth individuals with complicated family structure.