International Trusts in Cyprus  
 In July 1992, Cyprus enacted the International Trusts Law 69(I)/92 (the “Law”). The Law regulates the establishment and administration of international trusts and is designed to complete the spectrum of services the island offers as an international financial centre. It should be noted that, since Cyprus is a common law jurisdiction, the concept of trusts has always been part of Cyprus law. Thus, the object of the Law has been to modernise and update the existing legal framework in order to reaffirm the position of Cyprus as a significant trust jurisdiction. As of 23 March 2012, the Law has been extensively amended in order to bring it in line with the laws of other jurisdictions, allowing for the creation of international trusts.
The most important provisions of the Law are set out below:
1. Definitions 

Section 2 of the Law defines the conditions necessary for a trust to be considered an international trust and thus to fall under the ambit of the Law. In that regard, it is necessary that the settlor and beneficiaries are not residents of Cyprus in the year preceding the creation of the trust and that at least one of the trustees is a resident of Cyprus. The term “resident of Cyprus” is determined in accordance with the Income Tax Laws of the Republic of Cyprus.
2. Asset Protection 

Sections 3(2) and 3(3) of the Law provide that no trust shall be void unless, and to the extent that it is proven in Court by a creditor, that, at the time of the transfer of assets to the trust, this transfer was conducted with the intent to defraud. The burden of proof consequently lies with the creditor. No action may be brought against the trustee after two years from the date of the transfer.
3. Perpetuities and Accumulation

Section 5 of the Law provides that there is no limit on the period for which a trust may continue to be valid and enforceable, and that no rule against perpetuities or remoteness of vesting or any analogous rule will apply. According to Section 6 of the Law, income may accumulate for any period within the period of the trust.
​​4. Flexibility of Applicable Law 

Section 9 of the Law allows for the change of the governing law of the relevant trust to and from the law of the Republic of Cyprus, if such change is authorized by the terms of the trust itself. In this way, Cyprus trust law provides the necessary flexibility for the clients to change the governing law to and from Cyprus law, depending on which jurisdiction is most advantageous for the client’s circumstances at any given time. This flexibility, coupled with the possibility of having more than one trustee where one of the trustees is a non-Cyprus resident, serves to provide the client with confidence and security in the successful management of the trust in the most advantageous jurisdiction, where the client may be confident that the trust will continue to successfully evolve to meet their ever-changing needs.

5. Confidentiality 

Subject to the trustee complying with the applicable anti-money laundering legislation and subject to the provisions of the trust deed, the trustee, protector, enforcer or any other person are prohibited from disclosing any information about the trust. Sections 11(1), 11(2) and 11(3) of the Law provide that a Court may, by order, allow disclosure of information for certain specific purposes. 

6. Favourable Taxation 

Section 12(1) of the Law provides that, in the event that the beneficiary is a Cyprus resident, the income and gains of a trust derived, or deemed to be derived, from outside and within Cyprus are subject to taxation imposed in the Republic. In the case of a non-Cyprus resident beneficiary, only the income and gains of a trust derived, or deemed to be derived, within Cyprus are subject to taxation in Cyprus, noting that dividends or interest received from Cyprus sources are not taxable. 
7. Stamp Duty 

The instrument creating an international trust is subject to flat stamp duty of EUR 430.