ARTICLE
24 May 2022

Trusts And Trustee Services In Cyprus

A|
AGPLAW | A.G. Paphitis & Co. LLC

Contributor

Established in 2006, AGP & Co is a highly reputable, dynamic, award winning and excellence driven Law Firm based in Cyprus with a strong international presence. It provides full service Legal, Corporate, FS Advisory & Regulatory Compliance/AML, Tax, Immigration and Real Estate services.
Seeking competent planning advice is key when choosing the best structure for a trust, as well as managing and administrating it, in accordance with the International Trusts Law of 1992 to 2013.
Cyprus Corporate/Commercial Law

Trust formation

Seeking competent planning advice is key when choosing the best structure for a trust, as well as managing and administrating it, in accordance with the International Trusts Law of 1992 to 2013.

When structuring a trust, both asset wealth protection and estate planning options should be considered. Cyprus trusts also offer unique tax advantages, and there is a wide network of double taxation treaties between Cyprus and other countries that clients can benefit from.

Trust assets include:

  • bank deposits;
  • real estate;
  • cash;
  • jewelry;
  • any kind of personal property; and
  • company shares.

The most frequent type of trusts in Cyprus are:

  • discretionary trust
  • fixed trust;
  • fixed and discretionary trust;
  • trading trust; and
  • purpose trust.

They are most commonly aimed at:

  • legal protection of settlor's assets;
  • wealth planning purposes
  • succession planning purposes;
  • tax optimisation;
  • charity purposes;
  • relating to employee benefits, such as premium funds or a pension scheme;
  • common investment purposes; and
  • preserving the anonymity of the beneficiaries.

Trustee services

Trusts have been offering asset protection for hundreds of years, and, despite the changing lifestyle and business conditions over the years, they still offer multiple benefits.

The benefits of a Cypriot trust can be summarized as follows:

  • protection of assets and wealth for future security from business failure, future creditors or a relationship breakdowns;
  • tax planning and optimization – trusts can be subject to a low tax jurisdiction, which reduces exposure to high taxes of the country of residence; and
  • inheritance planning and retaining control over statutory disposition of assets.

Expert advice can take many forms, such as:

  • formation and management of Cyprus and foreign trusts;
  • appointment of trustees for every type of trusts; and
  • nominee appointments for private individuals and investments.

Confidentiality and anonymity

For various reasons, business confidentiality and not disclosing a client's identity are important factors particularly in business trusts. Ultimate beneficial owners of a variety of businesses choose to keep their identity undisclosed in public records.

There are many reasons for choosing to stay anonymous, including:

  • family protection – the less people know about a trustor's business dealings, the better;
  • asset protection – similarly to family trusts, company shares are held on trust for the benefit of the structure's ultimate beneficial owner; and
  • reducing public exposure – it is common that businesspeople who engage in a variety of businesses wish to keep their name and contact details undisclosed to the general public. Using services anonymously ensures and guarantees such protection.

A.G. Paphitis & Co LLC

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More