The Cyprus International Trust
by Pericles Spyrou, Managing Director of MMG Trust (Cyprus) Ltd., Nicosia
Published: August, 2012
Submission: August, 2012
Legislation and Legal Requirements
Prior to the enactment of the 2012 Law, there were three requirements to be met in order to establish a CIT:
1. Neither the settlor nor the beneficiaries were allowed to be permanent residents of Cyprus.
Prior to the enactment of the new law, a CIT could exist for a maximum period of 100 years from the date on which it came into existence. Under the new law, this restriction was alleviated and, as such, a CIT can exist perpetually.
Lastly, it is worth noting that the beneficial tax regime was not only preserved but also enhanced. It is clearly stated that, for beneficiaries who are not tax residents in Cyprus, only the income and the profits of a CIT derived or deemed to derive from sources within Cyprus are subject to all taxes that are applicable in Cyprus. Dividends or interests received from non-Cypriot sources are, in most cases, not taxable.
Once the trust deed is executed, the only formality that needs to be completed is to have it stamped by the Commissioner of Stamp Duties and, upon doing so, pay a one-off fee of EUR 427. No copy is kept by the Commissioner and there is no need for either public filings or other administrative requirements such as auditing.
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