The Cyprus trust has been recognized as an asset protection haven for astute investors, as they merge the benefits of tax optimization with asset protection. Cyprus has all the benefits of many of the most enduring trust jurisdictions, including the fact that all income held by the trust is tax-free. 

The Cyprus trust is one of the most solid asset protection tools in Europe. It can only be set aside exclusively within two years, and only if it is proven that the trust was established to defraud creditors. The trust retains control for the settlor by permitting the trustee to be a PTC (private trustee company established by the settlor or his counsel).

The trust protects your assets against bankruptcy, spousal claims, government claims, applications for spousal or extramarital maintenance, inheritance, death duties, and almost all types of claims.

Apart from the legal benefits, there are some practical benefits of trust establishment in Cyprus, including the multitude of professional banks, asset managers, accountants, and lawyers all familiar with trust law. This means they can effectively and quickly assist in structuring the trust per the settlors’ wishes.

• Asset protection;

• Wealth planning purposes;

• Charity purposes;

• Tax planning purposes;

• Succession planning purposes

Fixed trusts: Beneficiaries are only entitled to the specified trust property, which is indicated by the settlor upon the creation of the trust. Trustees are obliged to follow the terms of the trust deed. Thus, they don’t have discretional powers when distributing assets to the beneficiaries.

Discretionary trusts: Here, the settlor has given discretion to the trustees on the sum each beneficiary is entitled to receive from the trust property or asset. That means trustees have the discretion to deal with the trust property or asset as they think proper for the benefit of the beneficiaries.

Cyprus international trusts: They offer one of the world’s top legal frameworks, as they are based on the English principles of equity and trusts. They can be created in complex environments and circumstances and have many advantages that cannot be found in other countries. They allow the creation of trusts with tax planning benefits and asset protection features. The law is ideal for high-net-worth individuals who have complicated family structures and aim to optimize their tax planning.

What are the main benefits of Cyprus' trusts?

Asset protection: A trust protects assets against risks, future claims by governments or creditors, and claims of current or former spouses. Cyprus international trusts can be used to protect assets against future claims in contract based on prior transactions entered into by the previous owner.

Tax benefits: Any trust settled in Cyprus will enjoy the variety of tax benefits Cyprus offers for foreigners. All dividends, interest, and royalties received from the trust are not taxable or subject to withholding tax. Further, they are not subject to estate or inheritance tax. If beneficiaries are non-tax residents of Cyprus, only Cyprus sources of income are taxable under Cyprus’s income tax law.

Hard to void: Cyprus trusts are hardly declared void. To do so, the claimant must prove that the trust was created to dupe creditors on payment and transfer of the assets, and such claims must be brought within two years of the operation.

Perpetuity and confidentiality: Cyprus international trusts don’t have a time limit on their validity and are subject to strict confidentiality. The documentation that refers to a trust can only be disclosed by court order.

• Excellent tax regime

• Ruled by Cyprus law, protecting the trust from foreign law

• Perpetuity

• Unrestrained investment options

• Confidentiality: registry is not available to the general public. It only contains name of the trust, trustee’s name and address, and establishment date.

• The settlor can move to Cyprus after registering the trust.

• An intent of defraud is required to invalidate the trust.

• The trust is not affected by forced heirship nor matrimonial property laws.

• Creditors must prove they were creditors when the trust was settled.

• The UK Insolvency Act doesn’t apply.

About us

Our experts have vast experience in asset protection tools worldwide, including what is arguably the best in Europe, the Cyprus trust

Our goal is to provide a plan that will help you create a rock-solid structure to protect your family in times of distress and uncertainty.

Asset protection and tax optimization are essential goals to keep in mind in tough times. And a Cyprus trust can give you just that. It is a stable, optimized vehicle for intergenerational wealth planning. 

Please contact us for a consultation and protect your assets and legacy for generations to come.