The main legal framework governing trusts in Cyprus is a combination of English Law i.e. the Principles of Equity and Statute Law i.e. The Trustees Law of Cyprus (Cap 193), which, is modelled on the English Trustee Act of 1925 and the International Trusts Law of Cyprus (Law 69(I) of 1992 as amended by Law 20(I)/2012), making Cyprus one of the most competitive jurisdictions to set up such a Trust.


The trust is an instrument where the person who creates the trust (the “Settlor”) appoints another person or persons (the “Trustees”) to hold property of the Settlor (the “Trust Property”) for the benefit of others (the “Beneficiaries”). Under such a deed, the Trustee becomes the legal owner of the Trust Property whereas the Beneficiaries become its equitable owners.

The trust can be created at a time where the Settlor is alive or on his death (for example through a testamentary disposition). In the latter scenario, inheritance laws are applicable. Here we are dealing only with Trusts created during the life of the Settlor.


The creator of a CIT i.e. the Settlor and the Beneficiaries must not be tax residents in Cyprus during the year preceeding the year of creating a CIT (they may become tax residents subsequently)

  • All matters in relation to a CIT are determined in accordance with Cyprus Law and the Cyprus Courts have jurisdiction
  • A CIT may be challenged only on defraud of creditor grounds with a two year limitation period
  • Succession, heirship or other laws applicable in foreign jurisdictions or court judgments or orders or arbitral awards or decisions by foreign Competent Authorities do not affect the validity of a CIT or the transfer of property to the Trustee of a CIT
  • The Settlor has the right to reserve many powers including, the powers to revoke or amend the trust, to instruct the Trustee, to appoint and remove trustees, the protector or the enforcer, to change the law regulating the CIT or the place of its administration and others
  • A CIT may last for indefinite period
  • The income of a CIT may be accumulated without limitations
  • A CIT may be created for charitable or any other purpose
  • The law regulating a CIT may be changed to another foreign law
  • The trustees of a CIT are bound by confidentiality and cannot disclose information or documents unless they are ordered by a Cyprus Court or are required by law in certain defined circumstances
  • In the case of a CIT which is expressly governed by Cyprus Law, the provisions of the International Trusts Laws of Cyprus apply without reference to other applicable rules of conflict and as a matter of public order.
  • A CIT is not subject to registration in Cyprus (unless its property consists of real estate in Cyprus)


  • A CIT can appoint nominee shareholders to hold shares in a company on behalf of the trust. In such cases, dividends, interest or royalties received by a CIT are not subject to withholding tax.
  • Used to divest personal assets. For example, if someone wishes to dispose of an asset, he can do so by transferring it to the CIT.
  • Used to avoid exchange controls. For example, if in the future exchange controls are placed for remittance of funds back to the home country, the CIT can be used to keep the funds as part of the Trust and outside the scope of the exchange control remittance regulations.
  • A CIT can be used for estate planning. For example, through the trust the settlor can arrange for someone who wouldn’t inherit otherwise (due to forced heirship rules), to inherit.


Difficult to Challenge
There is a two-year limitation period for challenging a CIT (or challenging the transfer of assets to the CIT) and the only reason it can be challenged is for defrauding creditors; the burden of proof being on the creditors to prove that the CIT (or the transfer of assets to the Trust) was made with the intent to defraud them.

Secondly, the laws of succession applicable in any country (including court orders or decisions or Governmental Authorities) will not affect the validity of a CIT or the transfer of property to the Trustee of a CIT.

Law Governing the Cyprus International Trust
If the law chosen to govern the CIT is Cyprus law, then as a matter of public policy the provisions in the CIT will be upheld regardless of conflicting provisions in the laws of Cyprus or laws of other jurisdictions. For this reason, any inheritance laws in any other jurisdiction will not be applied.

Flexibility of the Trust
The Settlor (provided this is expressed in the instrument) can reserve powers, which include the power to amend the trust, appoint or remove trustees, protectors or enforcers, or change the law governing the trust.

It should be noted that amendments require the approval of the court.

Under our law, the Trustees of a CIT have an obligation not to disclose information or documents unless ordered to do so by the court or are required by law (For example the Trustee must register the Beneficiaries for tax purposes). What is required however is for the trust to be registered at the Trusts Registry for as long as the trust is governed by Cyprus Law. This registry is not available to the public for inspection but can only be inspected by the Competent Authorities.

Divesting of Personal Assets
An individual who wishes to divest himself of personal assets for fiscal or other reasons can achieve this by transferring them to an International Trust created in Cyprus.

Pre-Migration Arrangement
Individuals moving to a high tax country may obtain fiscal advantages in their new country by placing funds in an International Trust created in Cyprus.

Investing in Business Overseas
An individual, who wishes to invest in business overseas but wishes to ensure that the profits and dividends received are not remitted to the country of his residence, may set up an International Trust in Cyprus to invest in overseas business.

Investment Holding Company
A trust can be used in one country to own an underlying investment holding company in another. This type of tax planning device has many advantages in providing the maximum possible protection for both settlor and beneficially alike.

Exchange Control
An individual with assets outside his country of residence and whose country of residence may in future extend its exchange control restrictions to include remittance of overseas funds, may wish to retain the flexibility of overseas funds by transferring them to an International Trust created in Cyprus.

Global Estate Planning
An individual, through the use of a trust can arrange to be succeeded in inheritance by persons who due to the legislation of the individual’s country would otherwise be excluded from the inheritance.


  • We advise clients about the creation of a CIT, including proposing structure ideas for creating, managing and dissolving a CIT and draft all required legal documents
  • We support and assist clients in terms of logistics when setting up a CIT
  • We set up private trustee companies (PTCs), corporate protectors, corporate enforcers (in Cyprus and in other jurisdictions)
  • We advise clients and trustees about issues arising in relation to a CIT, trustee powers, beneficiary rights, interpretation of trust deeds and other trust related documentation
  • We represent clients and trustees in court proceedings (contentious or not contentious)
  • We advise clients on the potential weaknesses and deficiencies of existing trusts
  • We provide trustee, administration, management and other related services