Trusts in Cyprus

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What is a Trust

A trust is a relationship between one party, known as a settlor, who relinquishes control and transfers assets to another party, the trustee, to hold, administer and manage for the benefit of specified beneficiaries or for charitable or other purposes in accordance with the terms of the trust deed and applicable law.

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Components of a Cyprus International Trust

A Cyprus international trust is defined as a trust in respect of which:

  • the settlor (whether a natural or legal person) is not a resident of Cyprus for the calendar year prior to the creation of the trust;
  • at least one of the trustees for the time being is, during the whole duration of the trust, a resident of Cyprus; and
  • no beneficiary (whether a natural or legal person) other than a charitable institution is a resident of Cyprus for the calendar year prior to the creation of the trust.

All references to the term “resident of Cyprus” should be construed in accordance with the Income Tax Law, as amended (183 days rule for physical persons and “management and control” test for legal entities).