Cyprus International Trusts: A modern, secure, and strategic vehicle for global wealth planning
Cyprus has been recognised as an attractive jurisdiction in the EU for international wealth structuring. With a robust legal framework, favourable tax system, and strong asset-protection features, Cyprus International Trusts (CITs) offer individuals and families an efficient vehicle for long-term wealth preservation and succession planning. At Harneys Fiduciary Cyprus, we deliver comprehensive, bespoke trust solutions supported by decades of institutional expertise and a deep understanding of the complexities of cross-border planning.
The legal foundations of CITs
CITs are governed by the International Trusts Law, which was significantly reformed in 2012. These reforms strengthened the structure by enhancing asset-protection features and permitting CITs to hold immovable property in Cyprus. As a result, Cyprus offers one of the most modern and well-protected trust regimes in Europe.
Main requirements for establishing a CITs:
- The settlor and beneficiary(ies) must not have been a Cyprus tax resident during the calendar year before the trust the trust was created
- At least one trustee must be a Cyprus tax resident for the duration of the trust
- Trustees providing services must be duly licensed by the relevant regulatory authorities
These conditions ensure that the trust remains fully compliant with EU and Cyprus regulatory standards.
Key advantages of CITs
CITs offer a range of benefits, which positions Cyprus as a leading hub for international wealth structuring.
- Long-term flexibility and duration
A CIT may exist indefinitely, offering long-term continuity across generations, unless otherwise defined by the trust deed.
- Strong asset protection
A CIT cannot be voided due to the settlor’s bankruptcy or liquidation. Challenges by creditors are strictly limited to a two-year period and require proof of intent to defraud, offering exceptional security for assets placed in trust.
- Freedom from forced heirship rules
Transfers of property into a CIT cannot be contested on forced-heirship grounds, enabling settlors to determine the distribution of their wealth with complete autonomy.
- Tax efficiency
CITs are treated as tax-transparent structures. Where beneficiaries are not Cyprus tax residents and the trust does not own Cyprus-situated immovable property, no Cyprus tax is applied at the trust level. Even when beneficiaries are Cyprus tax residents, taxation applies only to income received from Cyprus-based sources. This favourable regime has made CITs highly attractive for international tax planning.
- Investment freedom
Trustees may invest in any class of assets, with no restrictions on accumulation or forced distributions, supporting long-term strategic asset management.
- Confidentiality with modern transparency standards
Cyprus maintains stringent confidentiality rules. Officials and trustees may not disclose trust information except under specific legal circumstances. Since 2022, beneficial ownership information is recorded in the Cyprus Trusts Beneficial Ownership Register (CyTBOR). CyTBOR is a non-public register accessible only to competent authorities, obliged entities, and in limited cases, persons with a legitimate interest, balancing privacy with compliance requirements.
- Settlor control through reserved powers
Settlor autonomy can be preserved by reserving powers such as amending the trust, appointing or removing trustees or protectors, instructing trustees, or changing governing law or place of administration.
Cyprus: A stable and competitive international financial centre
Cyprus is considered as one of Europe’s most competitive and reliable jurisdictions for structuring international wealth The evolution of its trust and tax legislation reinforces that Cyprus is an established EU jurisdiction that offers regulatory stability, strong legal protections, and compelling tax advantages.
Why Choose us
At Harneys Fiduciary, we provide exceptional service rooted in professionalism, efficiency, and a deep understanding of client needs, ensuring personal engagement throughout every stage of establishing and managing a CIT.
