Trusts & International Trusts

Papantoniou & Papantoniou LLC > Trusts & International Trusts

Trusts & International Trusts

 

Papantoniou & Papantoniou LLC provides innovative solutions to meet the client’s best interests by including the structuring and preparation of wills, trust deeds and agreements, international tax planning, incorporation of trusts within a corporate structure and through other legal and commercial vehicles. Our Practice can advise as to the procedure of setting up a trust, draft the Trust Deed and generally complete this procedure.

 

It is well established that the use of Trusts as vehicles for various activities has many legal and financial benefits. The new Law amending the Cyprus International Trusts Law (L. 20(I)/2012) has been introduced and came into force on the 23rd of March 2012. The new International Trusts Law enhances the position of Cyprus as one of the most attractive jurisdictions worldwide to set up and operate an International Trust.

Our Practice can advise as to the procedure of setting up a trust, draft the Trust Deed and generally complete this procedure.

The new Law maintains the existing attractive Cyprus International Trusts Law and has introduced many new features.

The new Law maintains the existing attractive Cyprus International Trusts Law and has introduced many new features. The most important of these new features are summarised below:

 

  • The Settlor and the beneficiaries or any of them of a Cyprus International Trust (“CIT”) may become resident in Cyprus
  • All questions in relation to a CIT will be governed by Cyprus Law and Cyprus Courts will have jurisdiction
  • The principle of Settlor reservation of powers is greatly enlarged and is being codified in the new Law. The Settlor of a CIT may retain or vest in the protector or enforcer of a CIT very wide powers including powers in respect of revocation or amendment of the CIT, distribution, sale, transfer disposal or charge of the trust property and substitution of the trustees. These and other of the powers expressly provided in the new Law, allow the settlor (or the protector of a CIT) to exercise a greater degree of control over the administration of the CIT
  • Real Estate situated to Cyprus may be the subject matter of the CIT
  • The new Law applies to new and existing CITs.

 

Types of Cyprus Trust

 

  • Discretionary Trust
    Provides the trustees discretion to exercise their own judgment as to the manner an amount by which the beneficiaries might benefit.
  • Fixed Trust
    The Trustees have no discretion in distributing the trust assets to the beneficiaries. Under such a trust the trustees are directed to distribute the income to a designated individual for a fixed period of time and there after the capital of the trust to a specific beneficiary/ies.
  • Protective Trust
    This trust is appropriate when a beneficiary is given a life interest which may become discretionary on certain defined events such as the bankruptcy of the beneficiary.
  • Trading Trust
    The trustee is usually a limited liability company which has power to carry on business and employees to manage its business.

Why choose Cyprus?

 

Generally the Cyprus International Trusts Law (L. 20(I)/2012) enhances the position of Cyprus as one of the most attractive jurisdictions worldwide to set up and operate an International Trust.

 

Cyprus International Trusts and Tax Advantages:

 

Cyprus International Trusts enjoy very important tax advantages, providing significant tax planning possibilities to interested parties. The following are the possible tax minimizations options:

 

  • Income
    All income whether trading or otherwise of an International Trust, is not taxable in Cyprus.
  • Dividends
    Dividends, interest or other income received by an International Trust from a Cyprus Company are neither taxable nor subject to withholding tax.
  • Capital Gains
    Gains on the disposal of the assets of an International Trust are not subject to capital gains tax in Cyprus.
  • Estate Duty
    There will be no estate duty in Cyprus over a Cyprus International Trust established for estate duty planning purposes.

 

Trusts may be used by individuals for the purpose of protecting their assets, for inheritance purposes or by employers to set up employment benefit scheme trusts for their employees

 

Cyprus International Trust is available:

 

To the individual who wishes to divert his overseas income to a discretionary trust

 

To the individual who wishes to divert himself of personal assets

 

To the individual who wishes to keep the ownership of his company anonymously and confidential.

Cyprus International Trusts Law enhances the position of Cyprus as one of the most attractive jurisdictions worldwide to set up and operate an International Trust.