The Characteristics of Cypriot TrustsUpdated on Friday 23rd October 2015
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The Trust Law in Cyprus
The Cypriot legislation on trusts is based on the English Trust Law. The Trustee Law which was enabled in 1955 was included in the Cypriot Civil Code. In 1992 Cyprus also introduced the International Trusts Law which is very advantageous for foreign investors coming to do business in the country. Under the legislation, international trusts can exist for a period of up to 100 years from their settlement. The main purposes foreign citizens set up trusts in Cyprus are:
- - to protect a property,
- - for charitable purposes,
- - to ensure the succession of family property for future generations,
- - for commercial purposes.
For details about the International Trusts Law you can refer to our law firm in Cyprus.
Types of trusts in Cyprus
Foreign citizens or companies can set up several types of trusts in Cyprus:
- - private trusts,
- - express private trusts,
- - resulting trusts,
- - constructive trusts,
- - implied trusts,
- - charitable trusts,
- - fixed trusts,
- - discretionary trusts,
- - trading trusts.
Our lawyers in Cyprus can explain in detail the characteristics of every type trust and the requirements to settle them.
How to settle a trust in Cyprus
Foreign citizens or companies wanting to set up an international trust in Cyprus must fulfill four main conditions:
- - the settlor is not a Cypriot permanent resident,
- - at least one trustee is a Cypriot permanent resident,
- - the beneficiaries are not Cypriot permanent residents,
- - the trust property does not include immovable property situated in Cyprus.
In order to settle a valid trust, the following three conditions must be met:
- - the settlor must express their intention of settling the trust,
- - the assets of the trust must be identifiable,
- - the identity of the beneficiaries must be ascertained.
There are no special procedures involving the creation of a trust in Cyprus. However, it is advisable to settle the trust in writing. The settlor will decide who the trustees and the beneficiaries are, what the powers of the trustees will be and what restrictions apply. A trust can also be settled as testamentary dispositions, usually taking the form of wills in Cyprus. Also, trusts come with several tax benefits in Cyprus.
For details about the advantages of setting up a trust in the country, please contact our Cypriot attorneys.