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Trusts

 On the 8th of March 2012 the House of Representatives of Cyprus enacted the International Trusts (Amending) Law of 2012.
 
All the amendments effected to the International Trusts Law of 1992 are of utmost importance in order to update and modernize the Cyprus law on trusts in accordance with the requirements of international investors, by taking into consideration the current investment practices and providing additional incentives for non Cyprus Tax residents to establish Cyprus International Trusts.
 
After the recent changes in the Law, the Cyprus position as an international financial center and a reputable Trust jurisdiction is enhanced.

Introduction

The Settlor, who is the owner of the assets, provides clear and specific instructions to the Trustee to create a Trust. The Trustee is appointed by the Settlor to hold and manage the Trust fund for the benefit of the Beneficiaries.

The Settlor assigns the legal title of the trust property to the Trustee. The Trustee manages the property in accordance with the instructions of the Settlor, which are expressed in written format on a trust deed of will. The Settlor in his discretion and will may also appoint a person who is called the protector to ensure that the Trustees act in accordance with his instructions.

Although the Trustee is the legal owner of the trust property, the beneficial ownership of the trust assets belongs to the Beneficiaries of the Trust. The Trustee has the legal ownership and manages the trust property of the Trust fund which is only available to the beneficiaries

Benefits of using a Cyprus International Trust

-Exemption from all taxes in Cyprus.

-Maximum confidentiality as there is no duty to register and/or prepare and file any financial statements or tax returns according to the Law. Therefore the Settlor and the beneficiaries are not disclosed in any event as the Law prohibits any Trustee or any other third party from disclosing anywhere such information.

-The relocation of the Trust to another jurisdiction and vice versa is possible, provided that it is allowable by the Law of the new jurisdiction.

-The validity of the Trust continues to apply even if the Settlor goes bankrupt; unless it is proven that the Trust was formed with the intention to defraud the creditors of the Settlor at the time of the transfer.

-A non Cyprus tax resident who decides to retire in Cyprus and creates a Cyprus International Trust is still exempt from taxes in Cyprus if all the property settled is situated outside of Cyprus and the income is derived from abroad, even if he is the beneficiary.

-Income receivable by a Trust may benefit from the provisions of a Double Tax Treaty always depending on the specific terms of the specific Treaty.
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