Cyprus International Trust (CIT): Asset Protection & Succession Planning
How high-net-worth families and founders utilize the Cyprus International Trusts Law: shielding wealth from creditor claims, ring-fencing succession from forced heirship, and total tax exemption on foreign gains.
Establish settler and trustee eligibility criteria
Under the International Trusts Law 1992 (as amended in 2012), the Settlor and Beneficiaries must not be tax residents of Cyprus during the year preceding the creation of the trust. At least one Trustee must be a licensed Cyprus resident fiduciary (advocate, ASP or trust company).
Draft the Trust Deed with tailored protective clauses
Draft provisions specifying beneficiary distribution rights, discretionary powers, appointment of a Protector, and reservation of powers by the Settlor (such as powers of revocation, investment direction, and appointment/removal of trustees permitted under Section 4A).
Register with Competent Regulatory Authority and secure 2-year limitation protection
The Trustee registers the trust on the confidential Register of Trusts maintained by CySEC, CBA, or ICPAC. Under Section 3(3), creditors challenging asset transfers into the trust bear the burden of proving intent to defraud, and claims are statute-barred after strictly 2 years.
FAQ
How are income and capital gains generated by a CIT taxed in Cyprus?
Where beneficiaries are non-tax residents of Cyprus, all international-sourced income, dividends, interest, and capital gains are 100% exempt from all Cyprus taxation (including income tax, capital gains tax, and SDC).