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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

Offshore Trusts Guide: Jurisdictions

Bahamas Barbados Bermuda British Virgin Islands Cayman Islands Cook Islands Cyprus Gibraltar Guernsey Isle of Man Jersey Liechtenstein Madeira Malta Mauritius Monaco Nevis New Zealand Panama Seychelles Turks & Caicos Vanuatu

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 countriesí 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.