International Trust Formation
Top 7 reasons to create a Trust
- Manage Assets – By having trustees manage those assets it can be ensured that the assets are properly managed by qualified persons of your choice.
- Protect Assets – If you want to protect assets from creditors, marriage breakdowns or from those who might influence your beneficiaries, a trust can be an effective vehicle.
- Control distributions – you choose when to give your beneficiaries directly control the assets you want them to have (perhaps because they are minors etc), you can distribute assets to them over time through a trust.
- Ensure Confidentiality, as there is no requirement to register or publish the financial results of an International Trust. The Deed of Trust is private to the parties concerned whereas in many overseas jurisdictions, when a person dies his will becomes open to public inspection.
- Avoiding compulsory succession – If someone feels that they were treated unfairly in your will, a legal battle could ensue. In some cases, it may be possible for your will to be varied (changed) – called “compulsory succession.” A properly drafted trust can be watertight so that challenges to your wishes may be avoided.
- Mitigate the tax liability on your income and/or wealth by transferring your assets from anywhere in the world to a Cyprus International Trust, as under a proper tax structure you will be able to take advantage of the beneficial double taxation treaty network that Cyprus has to offer.
- Helping charity – A trust can be set up with the purpose of providing gifts to charity.
Cyprus Trust Law is based on the English Trustee Act of 1925.
The Cyprus International Trust Law is one of the most attractive trust frameworks in the world – with the added bonus of being within the EU.
For a trust to qualify as an international trust, the following requirements must be fulfilled:
- the settlor must not be a permanent resident of Cyprus;
- no beneficiary, other than charitable institution, can be a permanent resident of Cyprus;
- the trust property cannot include any immovable property in Cyprus;
- at least one trustee must be a permanent resident in Cyprus.
Cyprus International Companies do qualify as residents of Cyprus for the purpose of the Law.
For further information on Trusts, you may read the Official Guide from STEP by clicking here