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.
International Support For Beneficial Ownership Info Exchange Wednesday 27/4/2016More 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.