The Cyprus International Trust (CIT)
The procedure for establishing a CIT is straightforward and can be arranged in a relatively short period of time. A trust created in Cyprus under the International Trusts Law of 1992 must meet the following requirements:
- The settlor must not have been Cyprus tax resident in the calendar year proceeding the year of creation of the trust.
- The beneficiaries must not have been Cyprus tax resident in the calendar year preceding the year of creation of the trust.
- At least one of the trustees must be Cyprus resident at all times.
It is worth noting that the 2012 amended Law clarifies that the settlor and the beneficiaries of a CIT may take up residency in Cyprus at any time following its creation.
CITs are considered particularly advantageous for international investors because they allow for flexibility in managing assets and offer strong legal protections. One of the defining features of the CIT is that neither the settlor nor the beneficiaries are required to be Cypriot residents, allowing for a global reach and appeal. The only residency requirement is that at least one trustee must be a permanent resident of Cyprus.
Trust Registration and Reporting Requirements
A new international Cyprus trust must register certain information with the Register of Trusts held by CySEC in its capacity as regulator, as follows:
Trustees of trusts managed in Cyprus are further required to obtain, maintain and update accurate information regarding the beneficial owners, including the settlor, trustees, protectors, beneficiaries or categories of beneficiaries, and any person exercising ultimate control. This information, and any changes, must also be submitted to CySEC.
Access to this information is only granted to supervisory authorities, obliged entities for due diligence, and persons demonstrating a legitimate interest, while all actions comply with data protection and GDPR requirements. Disclosure to third parties is only required in very particular circumstances and must be accompanied by a court order. The ownership of trust assets can therefore remain entirely confidential in most circumstances.
Where a request is submitted by a beneficiary to the trustee for the disclosure of the accounts of a CIT or of any documents or information relating to the proceeds and payments made by the trustees, the trustee has the power to disclose but only if it believes such disclosure is necessary and secures the bona fide interests of the trust.
Asset Protection
Succession, heirship or other laws applicable in foreign jurisdictions or court judgments or orders or arbitral awards or decisions by foreign competent authorities do not affect the validity of a CIT or the transfer of property to the trustee of a CIT.
A CIT may only be challenged on defraud of creditor grounds with a two-year limitation period. The trustees of a CIT are bound by confidentiality and cannot disclose information or documents unless ordered by a Cyprus Court or required by law.
Accumulation of income
Income can be accumulated indefinitely in a CIT without any requirement to need to make distributions.
Cyprus International Trusts Law
The 2012 amendment provides that Cyprus law has exclusive jurisdiction on CITs. It explicitly provides that any question relating to the validity or administration of a CIT or a disposition to a CIT will be determined by the laws of Cyprus, without reference to the law of any other jurisdiction.
The law relating to inheritance or succession in force in Cyprus, or any foreign law, will not in any way affect the validity of the CIT or any transfer or disposition of property to it and dispositions to a CIT may not be challenged on the grounds that they are inconsistent with the laws of another jurisdiction.
Settlor’s right to reserve powers and interests
The 2012 amendment introduced provisions enabling the settlor to reserve certain powers, to retain rights over, or interest in, the trust property, and to act as a Protector of the trust without affecting the validity of the trust. These reserved powers include the right to:
Investing in movable and immovable property in Cyprus
The 2012 amendment expressly enables trustees to invest in movable and immovable property in Cyprus and abroad, including shares in Cyprus companies. This eliminated potential issues in cases where the settlor and/or the beneficiaries seek residency in Cyprus after the creation of a CIT.
Authorised investments – extension of trustees’ investment powers
The 2012 amendment gave trustees, subject to the provisions of the trust deed, the power to invest in a broader range of investments for the best interests of the beneficiaries. This development brings the trustees investment powers into line with those of a trustee in England and Wales, as well as trustees from other trust jurisdictions that have followed the English Trustee Act 2000.
Duration
The 2012 amendment permitted new CITs to exist in perpetuity, subject to the terms of the trust. Previously, CITs were permitted for a maximum duration of 100 years from the date of creation although an exemption was available for charitable and purpose trusts.
Taxation
The Cyprus International Trust (CIT) benefits from a stable, transparent and internationally recognised tax framework. The Cyprus tax regime, as revised with effect from 1 January 2026, continues to support legitimate international wealth and succession planning when a trust is properly structured and administered.
- Income tax – generally, CITs are transparent for tax purposes although they may be liable to taxes such as VAT and stamp duty on their activities in Cyprus. The trustee is not assessed on the income or gains of the trust and is responsible for discharging the tax liabilities of the beneficiaries on their behalf.Income, gains and profits from non-Cyprus sources are exempt from income tax, capital gains tax, the Special Defence Contribution (SDC), or any other taxes in Cyprus.Non-resident beneficiaries are subject to tax only on income and profits sourced in Cyprus. Beneficiaries who are tax resident in Cyprus are subject to tax in Cyprus on income and gains of the CIT earned from sources both within and outside Cyprus.
- Dividends – dividends received by a CIT are not taxable and are not subject to withholding tax in Cyprus.
- Capital Gains – gains arising from the disposal of assets by a CIT are not subject to capital gains tax in Cyprus, except in the case of disposals of immovable property situated in Cyprus or shares in property‑rich companies.
- Inheritance Tax or Estate duty – no inheritance tax or estate duty is payable in Cyprus in respect of assets held through a CIT.
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