A Cyprus International Trust is one of the most attractive ways to protect your money. The establishment of international trusts and its related legal frameworks allow individuals to plan for the transferring of accumulated wealth to other family members or of a company with specific instructions.

 

This vehicle of wealth protection and transferring has been used by families since the Roman and feudal centuries in history. [Company Website] explains how Cyprus has developed a reputation as being a well-established financial center for setting up and managing a Cyprus International Trust that provides greater financial protection for international high-net-worth-individuals (HNWIs).

 

A trust is a legal agreement or a settlement that plans for the succession of accumulated wealth to the next generation which concerns at least three parties: the settlor – the trustee, the beneficiary, and the protector.

 

The settlor is the person, either natural or legal, who establishes the trust and is the owner of the property being put into the trust.

 

The trustee is the person, either natural or legal, who agrees to hold and manage the trust property under specified terms for the benefit of the beneficiary.

 

The beneficiary, or beneficiaries if there are more than one, is the individual or company receiving the benefits of the trust property.

 

The protector is the individual(s) or company(s) that are appointed by the settlor to protect the trust and oversee or appoint the trustee. It is optional to appoint a protector.

 

A trust deed is usually created which outlines which assets will be transferred, who is responsible for management, who are the beneficiaries, and the rules or conditions required of the trustee and beneficiaries.

 

The concept of the Cyprus International Trust has been decades in the making. The trust concept has its origins in Roman civil law. The notions of trustees and trustees’ obligations and duties is found in Roman law. Both fideicommissum and fiducia are two trust-like devices centered around property.

 

Fideicommissum developed for a person, upon death, to pass on the property to another individual and, under obligation, to pass that property onward to the next named individual. Property in this manner could also be passed on as a part of a chain. Property in this case could also be passed on value, similar to a portfolio of shares.

 

Fiducia was executed under either fiducia cum creditore, a property was transferred to a creditor in order to secure the performance of an obligation, or fiducia cum amico, a property was transferred to a friend to be kept safe until the transferor returned. The transferee was required to take reasonable care of the property and to handle the accounting of any profits.

 

Through the thirteenth to sixteenth centuries, mainland Europe utilized this system to create secret trusts for illegitimate children and mistresses. The generational transfer of land and property using Roman law principles continued until Napoleonic Code halted the transfer of wealth and influence.

 

At the same time, English common law developed in response to feudal ownership doctrines with large favor being placed on being able to transfer these assets to a long line of direct descendants or heirs. English Crusaders often left the care of estates to trusted individuals for safekeeping while away. The modern day notion of trusts and trust law emerged from English common law and rooted in the principles of Roman law.

 

In 1985, the Hague Convention on the Law Applicable to Trusts and on their Recognition, more commonly known as the Hague Trust Convention, was developed by the Hague Conference on Private international Law. It is a multilateral treaty that harmonized the definition of a trust and set rules for resolving conflict problems in applicable law cross-border.

 

Essentially, Cyprus trust law is based on the English system. The English 1925 Trustees Act provided the basis for the 1955 Cyprus Trustee Law, Chapter 193, which mainly regulates Cyprus International Trusts. In 1992, the International Trusts Law was enacted to modernize the legal framework surrounding trusts and to develop Cyprus as a serious financial center and trusts jurisdiction.

Cyprus is quickly becoming the preferred European Union jurisdiction of choice for trusts for HNWIs. Qualified non-tax resident individuals for a Cyprus International Trust are given the opportunity to establish trusts for even the most complex situations while enjoying many advantages not provided in other global jurisdictions.

 

Under Cypriot law, the definition of a trust is a legal relationship which is created when the settlor puts assets under the responsibility and care of a trustee for the benefit of the beneficiaries or for a specific purpose. A Cyprus International Trust is quite flexible under its definition and HNWIs with complicated family structures can use the trust to optimize their tax planning.

 

There are six main advantages of a Cyprus International Trust. The first is asset protection. Establishing a trust in Cyprus safeguards assets against risks, such as future private or governmental claims.

 

Another advantage is that a Cyprus International Trust is hard to void. The claimant must prove to the court that the trust was established with the intention of duping the settlor’s creditors on the transfer or payment of the assets. There is a two-year limit after the transfer that the claim must be made, making it difficult to declare the trust void.

 

A Cyprus International Trust also comes with an unlimited duration period. The trust can be created for the duration of a lifetime and an additional 21 years. If no natural person is involved in the agreement, the trust can continue for the next 21 years.

 

Moreover, Cyprus places great emphasis on the confidentiality of the trust. Any documentation or information regarding a Cyprus International Trust may only be disclosed by order of the court. It is required of all trusts to be registered, but the trust deeds may not be submitted. Any court-ordered disclosures will only be viewed by competent authorities. Further, in Cyprus there are no reporting requirements.

 

Finally, settlors retain the power to revoke or modify the terms of the trust. They can appoint a trustee or protector for the management of the trust property through Letter of Wishes. Settlors remain the enforcer of a trust.

 

Although a Cyprus International Trust is for non-tax residents, beneficiaries or settlors may become residents of Cyprus after the formation of a trust or may choose to re-domicile the trust to another jurisdiction, making it a top location for effective tax optimization and asset management.

When choosing a place to establish an International Trust, there are several factors to keep in mind. Not all jurisdictions have kept up with modern trust legislation, especially in regards to protection and benefits of assets. High-tax regimes are another concern for many looking to optimize their financial plan for future generations. Cyprus does not impose any income or estate taxes on a Cyprus International Trust.

 

Some jurisdictions are also a risk due to political or legal uncertainties that could affect the legal protections surrounding the creation of a trust. For instance, the Bahamas and the Cook Islands do not apply the legal protections established from the Hague Convention. Denmark, Luxembourg, Switzerland, Austria, and Aruba do not use the common law legal system as a framework for trusts legislation.

 

The Cook Islands, the Cayman Islands, and Gibraltar have less protections for trusts regarding international legal disputes, which could pose complications for maintaining a trust throughout multiple generations. Although, the Cook Islands has a short statute of limitation on several types of legal claims. Most often, by the time legal claims are processed in a foreign jurisdiction, the statute of limitation will have expired for the Cook Island Trust. International legal disputes pose the risk of dissolving or undoing a trust across multiple generations. Jurisdictions such as Cyprus grant more protections to trusts and can ensure that the trust holds its validity as it transfers to different beneficiaries down the line. 

 

Moreover, Cyprus has no perpetuity period maximum, whereas the Cayman Islands (150 years), Malta (125 years), New Zealand (99 years), and Singapore (100 years) do limit the trust’s time limit.

 

Belize, the Cayman Islands, and the Cook Islands work closely with many U.S. individuals and with the U.S. Internal Revenue Code, ensuring tax compliance and reporting is easier for U.S. individuals. 

Cyprus has no exchange control regulations while at the same time being a cost-effective jurisdiction easily accessible and free of language barriers. Cyprus is also one of the few jurisdictions where record keeping is not required.

 

Finally, in comparison, a Cyprus International Trust is covered by asset protection legislation as well as includes provisions to a beneficiaries’ right to information and the right to remove a trustee.

 

In all, Cyprus is an ideal international trust location for its cost-effective benefits, ease of set-up and management, and connectivity to international law and other major financial centers.

 

Given the legal framework of Cypriot law regarding international trusts, this jurisdiction has made establishing a Cyprus International Trust more practical, effective, and accessible for any context. The law and financial territory of Cyprus also provides more clarity, stability, and consistency for creating a sustainable international trust for future generations.

 

[Company Website] is a leader among professional service providers in Cyprus. Our experts can assist with the establishment and management of a Cyprus International Trust and help you ensure protection for your financial legacy.

 

Contact our team for tailor-made solutions regarding setting up a Cyprus International Trust. We can help you get started on your financial journey.

Cyprus international trust

 

[Company Website] breaks down the history and advantages of establishing a Cyprus International Trust over other jurisdictions worldwide.

From Roman law to English Crusader knights, the concept of international trusts has been decades in the making. Modernized applications of the legal framework of trusts have guaranteed greater legal protection of financial assets and more cost-effective tax planning strategies for the next generation.

 

[Company Website] explores the history and the advantages of establishing a Cyprus International Trust to ensure financial stability and sustainability for the current holders of valuable assets and the ones to follow.

Cyprus is fast becoming a leading international financial center. As individuals seek to find optimized financial solutions for their assets, Cypriot law makes it easy and clear to create a Cyprus International Trust. Moreover, its legal framework also ensures that it is one the most attractive jurisdictions for low taxes and the highest quality of protections.

 

[Company Website] navigates through the concepts of a Cyprus International Trust and compares it to other global trusts jurisdictions. As a lead service provider, our professionals can help you create and manage a trust in Cyprus no matter how complex your situation or family tree.