In Cyprus, Trusts are governed by a specific legal framework which constitutes a combination of English law, the Principles of Equity and the following Cyprus Statute Laws:

A. Law N. 4(ΙΙΙ)/2017 relating to the Hague Convention on the law applicable on trusts and the recognition thereof (Ratifying) Law.

B. Cyprus International Trusts Law (Law 69(I)/1992)

C. The Trustees Law of Cyprus (Chpt. 193)

Α definition of trust was given in the case Azinas and another v Police 2 CLR «a trust is an equitable obligation, binding a person (who is called a trustee) to deal with property over which he has control (which is called the trust property), for the benefit of persons (who are called the beneficiaries) of whom he may himself be one,  and anyone of whom may enforce the obligation»


The Cyprus International Trust Law provides that the following conditions must be met in order to establish a CIT:

A) The Settlor must not be a resident of the Republic of Cyprus during the calendar year preceding the year of creation of the trust.

B) At least one of the respective Trustees must be a resident of the Republic of Cyprus.

C) None of the beneficiaries, with the exception of a charitable institution, is a resident of the Republic during the calendar year preceding the year of creation of the trust Deed


To be considered as such, a trust must have the following features:

A) The Trust property constitutes a separate capital and is not part of the property of the Trustee.

B) The title of the trust property is in the name of the Trustee or in the name of another person on behalf of the trustee.

C) The Trustee has the power and the obligation regarding which he is accountable to manage, use or dispose of the property of the trust in accordance with the terms of the trust deed and any special obligations imposed on it by law.


In order to create a trust, the following three certainties must be cumulative met:

A) Certainty about the intention to create a trust. The intention to create a trust must be explicit and clear.

B) Certainty regarding the property of the trust must be clearly defined.

C) Certainty regarding the object, beneficiaries of the trust. The beneficiaries must be identifiable and can be verified.

Benefits of Cyprus International Trust Regime

4.1 Asset protection

Cyprus international trusts can be used to protect assets against future claims in contract based on prior transactions entered into by the previous owner/settlor.

4.2 Tax benefits

  • Revenues and profits from non-Cypriot sources are exempt from income tax, capital gains tax, extraordinary defense contribution or other type of taxation in Cyprus
  • Beneficiaries who are not permanent residents of Cyprus are taxed only on income coming from Cyprus, in accordance with the Tax Laws in Cyprus
  • Dividends, interest or royalties received by a person from the Cyprus International Trust from an international company in Cyprus are not taxed and are not subject to withholding tax.
  • Trust funds introduced in Cyprus by foreign investors or trusts removed in Cyprus from trusts not established in Cyprus (or retired in Cyprus from trusts not resident in Cyprus), are not taxed to the detriment of the Trustee.
  • There is no inheritance tax in Cyprus.
  • The Cyprus International Trust can be used to distribute tax-free income in Cyprus to beneficiaries, ie family members.
  • People intending to immigrate to a high tax jurisdiction can obtain tax benefits in this new country by protecting their assets through the Cyprus International Trust in Cyprus.

4.3 Difficult to void

  • CIT is invalid or revocable only if it was established with the intention of defrauding the creditors of the Settlor at the time of transfer of the assets to the trustee. Such claims must be brought within two years of the transfer.
  • Notwithstanding any contrary provisions of the law of the Republic of Cyprus or of any other country, an international trust shall not be null and void and no claim may be made in respect of assets which have been transferred to an international trust in the event of the bankruptcy or liquidation of the settlor’s property or in the process of bringing an action for the credit of the earner and despite the fact that it has been set up voluntarily and without negligence or for the benefit of the trustee, his / her spouse, their children or any of them except to the extent that it is proved in court that the international trust was established with the intention of defrauding the creditor of the settlor at the time of the transfer of the assets to the trust.
  • The burden of proving this intention of the trustee is borne by the above creditors.

4.4 Unlimited duration

There is no limit to the length of time that a CIT can continue to be valid and enforceable.

4.5 Confidentiality

Cyprus international trusts are subject to strict confidentiality. Any information or documentation pertaining to a trust may be disclosed only by order of the court.  All trusts must be registered, although the relevant trust deed need not be submitted. In case of inspection, disclosures of settlors and beneficiaries will be seen only by the competent authorities. Further, Cyprus trusts have no reporting requirements.

4.6 Reservation of powers

  • Settlors have the power to revoke, vary or modify the terms of a trust Deed. They can also appoint or remove any trustee or protector and give instructions to the trustee on how to manage the trust. This can be settled through a letter of wishes
  • Settlors can specifically set out their powers in the trust deed. Moreover, beneficiaries or settlors can become residents of Cyprus after they form a trust Deed, or a Cyprus international trust can be redomiciled to another jurisdiction.