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Cyprus international trust how can I setup and time?
- Thread starter blainchain
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INTERNATIONAL TRUSTS in Cyprus
A) The concept of trusts generally
The various types of trust vary in complexity but they have one common fundamental feature. A “person” being either an individual or a company (“the trustee”) agrees to hold certain assets (“the trust fund”) in its name for the benefit of another person (“the beneficiary”) on certain terms and with certain powers (which are usually set out in the Trust Deed). The assets comprising the trust fund are legally held and registered as owned by the trustee and the trustee is under a duty, enforceable in the Courts, to hold those assets and the income arising from them for the benefit of the beneficiary(ies).
The above relationship can be summarised as follows: The trustee has legal title to the trust assets and the beneficiary has beneficial or equitable title (it is the beneficial title which is of value when one is considering asset ownership).
The other important parties of the trust are:
The settlor. This is the person that creates the trust. In some jurisdictions the settlor could not act as trustee or be a beneficiary. In the Cyprus jurisdiction, the settlor can also be a trustee or beneficiary.
The protector. This is the person(s) that has the power to restrict key powers (such as add beneficiaries, etc.) of the trustee so that they can only be exercised with the consent of suitable person.
B) The Cyprus International trust
The international trust is a trust whereby:
At least one trustee is resident in Cyprus.
The nature of the Cyprus international trust could be “discretionary”.
As the name suggests the discretionary trust allows the trustee to exercise a large element of discretion with regard to distribution of income and assets, and to choose from a large “pool” of potential beneficiaries. The selection of beneficiaries from the “pool” could vary every year.
The following benefits relate to Cyprus International Trusts:
Income, gains and profits are exempted from income tax, capital gains tax, special contribution or any other taxes in Cyprus.
No estate duty or inheritance tax in Cyprus.
All or the majority of the board of directors should be residents in Cyprus. If only the majority of directors reside in Cyprus the majority should be enough to form a quorum for the conducting of the board meetings under the articles of association. The minority directors who are not resident(s) should consider traveling to Cyprus for an occasional board meeting.
The most important factor however is to register a branch of the U.K. company in Cyprus to undertake the activity.
An international trust shall not be void or voidable in the event of the settlor’s bankruptcy or liquidation or in any action or proceedings against the settlor or at the suit of his creditors not with standing any provision of the law of Cyprus or any other country.
An International Trust may be set aside by the settlor’s creditors to the extent that is proven to the satisfaction of the Cyprus Court that the International Trust was made by the settlor with the intent to defraud the creditors. The onus of proof of this intent shall be on the creditors. Confidentiality and non-disclosure
Confidentiality is of paramount importance. No government or Central Bank of Cyprus official may disclose to anybody any information or documents in connection with:
(a) Settler
(b) Beneficiaries
© trustees and their duties
(d) accounts or property of the trust
However, a beneficiary is entitled to request from the trustees information about the accounts of the trust. Furthermore, the court may order the disclosure of information or documents in criminal or civil proceedings cases, where the disclosure is important.
Stamp duty
A Cyprus international trust is subject to stamp duty of EUR 427. If the trust deed is stamped more than 30 days after the date of creation of the trust, a late payment fine is charged. The amount of the late payment fine depends on the length of the delay.
A) The concept of trusts generally
The various types of trust vary in complexity but they have one common fundamental feature. A “person” being either an individual or a company (“the trustee”) agrees to hold certain assets (“the trust fund”) in its name for the benefit of another person (“the beneficiary”) on certain terms and with certain powers (which are usually set out in the Trust Deed). The assets comprising the trust fund are legally held and registered as owned by the trustee and the trustee is under a duty, enforceable in the Courts, to hold those assets and the income arising from them for the benefit of the beneficiary(ies).
The above relationship can be summarised as follows: The trustee has legal title to the trust assets and the beneficiary has beneficial or equitable title (it is the beneficial title which is of value when one is considering asset ownership).
The other important parties of the trust are:
The settlor. This is the person that creates the trust. In some jurisdictions the settlor could not act as trustee or be a beneficiary. In the Cyprus jurisdiction, the settlor can also be a trustee or beneficiary.
The protector. This is the person(s) that has the power to restrict key powers (such as add beneficiaries, etc.) of the trustee so that they can only be exercised with the consent of suitable person.
B) The Cyprus International trust
The international trust is a trust whereby:
- The settlor is not a permanent resident of Cyprus
- The trust property does not include immovable property in Cyprus
At least one trustee is resident in Cyprus.
The nature of the Cyprus international trust could be “discretionary”.
As the name suggests the discretionary trust allows the trustee to exercise a large element of discretion with regard to distribution of income and assets, and to choose from a large “pool” of potential beneficiaries. The selection of beneficiaries from the “pool” could vary every year.
The following benefits relate to Cyprus International Trusts:
Income, gains and profits are exempted from income tax, capital gains tax, special contribution or any other taxes in Cyprus.
No estate duty or inheritance tax in Cyprus.
All or the majority of the board of directors should be residents in Cyprus. If only the majority of directors reside in Cyprus the majority should be enough to form a quorum for the conducting of the board meetings under the articles of association. The minority directors who are not resident(s) should consider traveling to Cyprus for an occasional board meeting.
- Board meetings should be actually held in Cyprus.
- General policy of the company is formulated in Cyprus.
- Company bank accounts controlled by the Cyprus directors. This entails that money movements in the accounts are properly minutes, so that they are seen to be done under the Control of the directors.
- Day to day management if actually carried out in Cyprus.
The most important factor however is to register a branch of the U.K. company in Cyprus to undertake the activity.
- No exchange control regulations.
- An International Trust may carry out business in Cyprus subject of course to the laws of the country, which are imposed on the beneficiaries and not on the trust itself.
- There are no reporting requirements in Cyprus for the International Trusts.
- Trust capital received in Cyprus by a foreigner resident or retired in Cyprus from trusts not resident in Cyprus is not taxable on the trustee.
- Asset protection
An international trust shall not be void or voidable in the event of the settlor’s bankruptcy or liquidation or in any action or proceedings against the settlor or at the suit of his creditors not with standing any provision of the law of Cyprus or any other country.
An International Trust may be set aside by the settlor’s creditors to the extent that is proven to the satisfaction of the Cyprus Court that the International Trust was made by the settlor with the intent to defraud the creditors. The onus of proof of this intent shall be on the creditors. Confidentiality and non-disclosure
Confidentiality is of paramount importance. No government or Central Bank of Cyprus official may disclose to anybody any information or documents in connection with:
(a) Settler
(b) Beneficiaries
© trustees and their duties
(d) accounts or property of the trust
However, a beneficiary is entitled to request from the trustees information about the accounts of the trust. Furthermore, the court may order the disclosure of information or documents in criminal or civil proceedings cases, where the disclosure is important.
Stamp duty
A Cyprus international trust is subject to stamp duty of EUR 427. If the trust deed is stamped more than 30 days after the date of creation of the trust, a late payment fine is charged. The amount of the late payment fine depends on the length of the delay.
From my understanding is the Cyprus International Trust at the moment the best choice!
Question: Your company must be owned by the trust or how does the trust profit from capital gains of your own company?
Question: Your company must be owned by the trust or how does the trust profit from capital gains of your own company?
I do not trust the countries and believe that in the end they will still tax you as the beneficial owner.
Is there any experence here with trusts?
Is there any experence here with trusts?
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