Cyprus International Trust – 2021- Wealth Protection-Zero Taxes!
Updated 07 July 2021
A well-known fact among the international financial community is that the Cyprus International Trust ( C.I.T. ) is a one of a kind legal vehicle for absolute secrecy, zero taxes and a 100% asset protection from third party claims even from foreign and local courts!
- ZERO TAXES: A Cyprus International Trust (C.I.T.) is a powerful tool for cross-border tax optimization schemes. A C.I.T. can invest in any kind of assets such as real estate, securities, bonds, gold, Forex etc. and it will pay 0% Tax in Cyprus, on the profits of all or any of these revenues provided that they are made outside of Cyprus.
- FULL SECRECY: A Cyprus International Trust offers full secrecy to the Settlor as no one can force the Trustee to disclose any details of the Trust Property, the Beneficiaries, The Settlor, or any of the terms and provisions of the Trust. That is so even as against any order of any foreign court. Only a Cyprus Court has the power to order such disclosures and only on the application of an interested party, such as a Beneficiary or the Protector.
- ABSOLUTE PROTECTION OF ASSETS: A Cyprus International Trust offers absolute protection to the Trust Property by raising a firewall of protection against any claims by third parties against any Trust Property, even if that claim is represented by a valid Court Judgement of a foreign Court.
- VERSATILE TOOL: It is a versatile instrument which allows for fluent and practicable structuring without creating an iron restraint on the investor (The Settlor). On the contrary it allows manipulation and resettlement of goals and targets. It allows the acquisition of real estate in any country, the ownership of shares, bonds or other securities, the holding of shares in any company, the possession of gold, cash, or other movable property and so on. All assets of the Trust can be sold, rented, or developed!
- LEGAL ENTITY NOT BEING A COMPANY: It is basically a legal entity without being a “company”, so the Cyprus Government does not have to report the Trust’s economic activity or Banking operations on the strength of the Automatic Exchange of Information treaty, signed by over 135 countries. A C.I.T. can act as a holding vessel for the shares of any company registered in Cyprus or abroad and to accept the profits (dividends) of that company at 0% tax!
Cyprus International Trust in 2021
A CIT is created on the strength and provisions of the Cyprus International Trust Law, Law 69 (1)/1992 article 2, which provides:
By Cyprus International Trust it is meant a trust whose:
- Settlor, is not Tax Resident in Cyprus the year before the year in which the Trust is created.
- The Beneficiary is not Tax Resident in Cyprus the year before the year in which the Trust is created.
- The Trustee during the existence of a Cyprus International Trust is a Cyprus Tax Resident person.
Presence is Not Required
A Cyprus International Trust can be created and registered without your presence in Cyprus. It will be a custom made Trust, which will encompass all the terms, conditions, agreements, promises and wishes of the you as the Settlor ot the Trust. It can be operated from Cyprus by the Trustee, for purposes of investments, opening a bank account for it, buying or selling trust property etc. without your presence. The Trustee can execute all the above through written instructions from you, by email, fax, letter or even by a telephone call.
Firewall for All Assets of the Trust
One of the main and most important advantages of a C.I.T. is the protection of the assets assigned to the Trust against any claims. Life is full of surprises good and bad. If you at some stage of your life have the bad luck to find yourself in economic troubles, the property set aside for your family and even for yourself cannot be touched or confiscated or blocked or frozen by creditors even through a foreign or local court decision or order. Article 3 (2) of Law 69 (1)/1992 also provides a full firewall of protection of the assets assigned to a C.I.T. as follows: Art 3 (2): Contrary to any Laws of Cyprus or any other country, no claim whatsoever can be raised as against any Assets of the Trust in case of bankruptcy of the Settlor or any court actions against the Settlor by any creditors.
Benefits of A Cyprus International Trust in 2021
A Cyprus International Trust has many Tax and Legal Benefits as follows:
- It is indefinite: Art 5 (1) of Law 69 (1)/1992 provides: In connection with a Cyprus International Trust, there is no time limit for it being valid and binding. Of course a time limit can be provided.
- It pays no Taxes: Art 12 (1) of Law 69 (1)/1992 provides: All income of a Cyprus International Trust earned by a foreign beneficiary outside of Cyprus, who is not Tax Resident in Cyprus is not taxed in Cyprus.
- Full Confidentiality: Art 11 (1) of the Law 69 (1)/1992 provides in short that no one including the Trustee, the Protector or any other person can reveal information to anyone about the identity of the Settlor, the Beneficiaries, the Trust Property, the Terms of the Trust, Accounts of the Trust, the reason of the creation of the Trust and generally anything about the Trust!
A CIT upon its creation becomes a legal entity of its own, just like a natural person. It can hold movable and immovable property in any country and can be the owner of any company in any country. It can therefore act as a Holding Vessel, to accept dividends from any other company operating outside of Cyprus, completely free of tax! This way a Trust can operate a Hotel, a chain of restaurants, a chain of men`s clothes shops, a Bank, a shipping business etc.! All assets of the Trust will of course protected.
Termination or Collapse of a Cyprus International Trust
A Cyprus International Trust can be terminated by the Settlor at any time without any penalties or other legal problems provided 3rd parties are covered. Art. 5 (1) of Law 69 (1)/1992.
Re-Domiciliation Or Change of Proper Law of a Cyprus Trust
A C.I.T. can move its registered address from Cyprus to another count and also change the proper law (Governing Legal System) to that of any other country, at any time. Art. 9 of Law 69 (1)/1992.
Reasonable Setting Up Fees
Another advantage of the Cyprus International Trust is that it can be set up for a very reasonable fee and it can be operated and maintained also for very reasonable Trustee salary, legal fees and other expenses. Please ask for our quote for setting up and operating a Cyprus International Trust.
Custom Made Trust For Each Client
We can create a custom draft of your Cyprus International Trust in a few days and have it executed and registered as soon as it is approved by you. We can also open a bank account for your Trust in about 10 working days from the moment you provide the necessary documents requested by the Bank.
Frequently Asked Questions:
If I set up a C.I.T. will I be paying taxes in Cyprus personally?
No you will not paying any taxes personally in Cyprus just because you set up a Trust in Cyprus. You don`t even have to register with the Tax Office in Cyprus.
Will my Trust in Cyprus entitle me to a Long Stay Visa in Cyprus?
It will count heavily when your application for a long stay visa in Cyprus, is being examined by the Migration Department. Ask for more details.
Can I increase the Trust Fund, once the Trust is set up and executed?
If there is a provision in the Trust Deed, when it is drafted for this, then yes, the Trust Fund can be increased and new assets added to the Trust Property.
Can I add new Beneficiaries to the Trust if I want to?
Again, if there is provision in the Trust to that effect you can add new Beneficiaries.
If you need any more technical information or legal advice about the setting up or operation or tax repercussions of a C.I.T., you or your Lawyers are welcome to contact me and I will be very happy to discuss everything with you.