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Offshore Trusts Report: Cyprus

Supervision, Licensing and Tax

Trust services in Cyprus are provided through International Trustee Services Companies.

Until 2003, the Central Bank of Cyprus was the authority responsible for the licensing and regulation of international business enterprises (i.e. companies which are beneficially owned exclusively by non-residents) involved in the provision of trustee services to the public at large, known as “International Trustee Services Companies” or “ITCs”.

Following the enactment of the Financial Services Firms Law in July 2002 (Law No. 148(I)/2002),(as subsequently amended in January 2003), as from 16th January 2003, the responsibility for the licensing and supervision of international business enterprises which offer financial services in or from within Cyprus to the public at large was transferred to the Cyprus Capital Market Commission.

The Central Bank of Cyprus is therefore no longer legally empowered to authorise new international business enterprises to provide financial services, under the provisions of the Exchange Control Law.

The Central Bank of Cyprus remained, however, until 31 August 2003, the competent authority responsible for the regulation of existing IFCs and ITCs. Existing companies were required to apply to the Cyprus Capital Market Commission, by 30 June 2003 the latest, in order to obtain a licence under the above mentioned Law.

While Stamp Duty is levied, broadly speaking, the income and assets of International Trusts are not taxable in Cyprus:

  • All income whether trading or otherwise of an International Trust is not taxable in Cyprus;

  • Dividends, interest or other income received by a Trust from a Cyprus international business company are also neither taxable nor subject to withholding tax;

  • Gains on the disposal of the assets of an International Trust are not subject to capital gains tax in Cyprus;

  • An alien who creates an International Trust in Cyprus and retires in Cyprus is still exempt from tax if all the property settled and the income earned is abroad, even if he is a beneficiary.

It is often possible to combine Cyprus International Trusts with the island's network of double-tax treaties to create very advantageous results.

   

The Report

Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

New Zealand

New Zealand: Legal Framework and Formation Rules and Fees
New Zealand: Review of the Law of Trusts
New Zealand: Taxation of Trusts

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees

 


Cyprus News

International Support For Beneficial Ownership Info Exchange Wednesday 27/4/2016 More than 20 jurisdictions have signed up to a pilot project to exchange data held on beneficial ownership registers and registers of trusts, according to UK Chancellor George Osborne.

Barclays Warns Expats Of Possible Account Closures Thursday 23/7/2015 Barclays Bank has disclosed that it may close expat's accounts in Cyprus if they do not maintain a minimum balance of GPB100,000 (USD156,000).

Cypriot Company Register Shrinks By Ten Percent Tuesday 13/1/2015 Cyprus removed almost 30,000 companies from its company registry in 2014, new figures show.

Harney Opens Singapore Office Friday 30/5/2014 Harneys, an international offshore law firm, has announced the opening of a Singapore office, adding to its offices in the British Virgin Islands, the Cayman Islands, Uruguay, the United Kingdom, Cyprus and Hong Kong.

Cyprus QROPS Struck From HMRC Approved List Monday 20/8/2012 The UK tax authority, HM Revenue and Customs has removed all Qualifying Recognised Overseas Pension Schemes based in Cyprus from its approved schemes list, effectively blocking the territory from being able to admit new pension transfers on a tax-free basis from would-be UK expatriates.

Cyprus Treaty Provides New Capital Gains Rules Friday 15/10/2010 The protocol amending the 1998 tax treaty between Russia and Cyprus includes special provisions related to real estate investment.

Cyprus Initials Revised DTA With Germany Wednesday 2/9/2009 The German Ministry of Finance announced on September 1 that it had initialled the text of a revised double taxation agreement with Cyprus to allow for the exchange of information on tax matters between the two countries’ tax authorities, in accordance with Article 26 of the OECD model convention.

IMF Concludes Article IV Consultation With Cyprus Thursday 20/8/2009 On August 5, the Executive Board of the International Monetary Fund concluded its 2009 Article IV consultation with Cyprus.

India Plans To Revise Double Tax Treaties Thursday 13/8/2009 India is revising its double taxation avoidance treaties, especially those which were concluded prior to 2004. Its objective is to renegotiate anti-abuse provisions.

IMF Issues Cyprus Mission Concluding Statement Monday 6/7/2009 The IMF has issued a Mission Concluding Statement in respect of its Article IV Consultation with Cyprus. The relatively benign impact of the crisis is due, in part, to conservative financial sector practices and strict supervision, and the elimination of exchange rate risk following euro adoption, according to the IMF.