The practical advantages of a trust are derived from the fact that a distinction is drawn between the formal or legal owner of property and the person who has the use or benefit of the property - the beneficiary. For formal legal purposes the trustee is recognised as the owner whereas the persons who have the use or benefit of the property are the beneficiaries. Trusts have many applications and advantages, including the protection and preserving of assets, tax planning or avoiding the expense and delays of obtaining probate under a will. Trusts also provide a high degree of confidentiality.
The procedure for establishing an international trust in Cyprus is straightforward and can be arranged in a relatively short period of time. Cyprus trust law is contained in both statute and case law with many of the principles of equity and English law. The primary statute for Cyprus international trusts is the International Trust Law, which defines a Cyprus international trust as a trust in which:
- The settlor is not a resident of Cyprus in the year preceding the year of settlement of the trust;
- The beneficiaries are not residents of Cyprus in the year preceding the year of settlement of the trust; At least one of the trustees is a permanent resident of Cyprus.
- The settlor may retain or be granted powers, rights and interests in the trust property allowing great flexibility to adapt to changes in circumstances or objectives. The validity of a Cyprus international trust and the disposition of property to the trust are protected against claims brought for contravention of any foreign laws nor are they affected by the inheritance or succession laws of Cyprus or of any foreign jurisdiction.
Cyprus international trusts enjoy a tax status that provides significant opportunities. Non-resident beneficiaries are subject to tax in Cyprus on income and profits of the trust derived only from sources within Cyprus, while resident beneficiaries are subject to tax in Cyprus an income and profits of the trust derived from sources within and outside Cyprus.
Vergina Trust has unrivalled experience in helping clients regarding Trusts including:
- Establishment of Cyprus Trusts, Cyprus International Trusts and international Trust Structures
- Legacy Planning
- Provision of corporate Trustee
- Provision of Protectors
- Advising on family asset protection and inheritance issues
- Administering trusts involved in employee bonus schemes
- Opening, administering and monitoring all bank accounts
- Liaising with fund managers for the operation of investment accounts
- Making distributions to the beneficiaries
- Maintaining Trust's accounting records through affiliated companies