Trusts have many applications and advantages, including the protection and preserving of assets, tax planning or just avoiding the expense and delays of obtaining probate under a will. They also provide a high degree of confidentiality.
Cyprus enacted the Regulation of Fiduciaries, Administration Businesses and Company Directors Law in 2012 (the ‘Law’). The Law requires all individuals or companies offering trustee, administration or related services to be authorised as ‘fit and proper’ and licensed by the Cyprus Securities and Exchange Commission.
The main legal framework governing trusts in Cyprus is a combination of English common law, the Trustees Law of Cyprus (Cap 193), which is modelled on the English Trustee Act of 1925, and the International Trusts Law of Cyprus (Law 69(I) of 1992 as amended by Law 20(I)/2012).
Regulations require trustees to know the identity of the settlor and ultimate beneficiaries of a trust. This information is kept completely confidential. Disclosure to third parties is only required in very particular circumstances and must be accompanied by a court order. There is no public register of trusts in Cyprus. The ownership of trust assets can remain entirely confidential in most circumstances.
Although some of the tax benefits that were associated with trusts have been eroded in recent years, they still offer great advantages – particularly for individuals who are changing, or planning to change, their domicile, residence or citizenship; those with families resident abroad; those seeking asset protection; and those who wish to dispose of their estate on death freely and without a lengthy and expensive probate procedure.