What is a Cyprus International Trust (CIT)?
A Cyprus International Trust, under the International Trusts Law, 69(I)/1992 as amended by Law 20(I)/2012, is a trust where (i) the settlor was not a Cyprus tax resident in the calendar year before the trust was created, (ii) at least one trustee is Cyprus-resident throughout the life of the trust, and (iii) no beneficiary (other than a charity) was a Cyprus tax resident in the calendar year before creation. The term “resident” follows the Income Tax Law.
Who typically uses a CIT
– International families with assets or beneficiaries in multiple countries.
– Owners of operating companies and holding structures who want a long-term, neutral platform for ownership and succession.
– Individuals seeking robust asset-protection and confidentiality features within an EU legal system.
Key advantages
Asset-protection features with creditor time limits. A disposition into a CIT cannot be set aside simply because it is voluntary or benefits the settlor’s family. A challenger must prove “intent to defraud,” and any such action must be brought within two years from the transfer to the trust.
No rule against perpetuities. Modern amendments removed duration limits for CITs; a trust can be valid for an unlimited period if the deed allows it.
Settlor-friendly control options. The law allows the settlor to reserve significant powers (e.g., to amend, give binding investment directions, appoint/remove trustees or beneficiaries) without undermining the trust’s validity.
Clear governing-law and jurisdiction rules. Matters concerning validity, administration and powers under a CIT are determined under Cyprus law, and parties may provide for Cyprus court jurisdiction in the deed.
Confidentiality. Trustees and protectors are generally prohibited from disclosing the settlor’s or beneficiaries’ identities, trustee deliberations, or trust accounts, unless a court orders disclosure or the deed requires it. It is important to highlight that, since 2022, competent authorities and obliged entities have access to CyTBOR, even though it is not public.
Eligibility & basic structure
At a high level, you need:
– a non-resident settlor (in the calendar year before creation),
– at least one Cyprus-resident trustee for the trust’s duration, and
– beneficiaries who were non-resident in the calendar year before creation (charities excluded from this rule).
Note: After creation, the settlor or beneficiaries can relocate to Cyprus without affecting the trust’s status (though their personal tax position changes).
Tax treatment in brief
Cyprus taxes CIT income at the beneficiary level, based on the beneficiary’s residency:
– If a beneficiary is Cyprus-resident, worldwide income/profits attributable to that beneficiary are taxable in Cyprus including Special Defence Contribution (SDC) where applicable.
– If a beneficiary is non-resident, only Cyprus-source income/profits attributable to that beneficiary are taxable in Cyprus.
(We tailor the structure so distributions and any Cyprus-source items are handled efficiently under the Income Tax Law and SDC rules applicable at the time.)
Set-up steps and timeline
- Scoping & design. Clarify aims (asset protection, succession, philanthropy), classes of beneficiaries, and any reserved powers.
- Choose trustee(s). At least one must be Cyprus-resident and suitable for long-term administration.
- Drafting. Trust deed (and where appropriate, a letter of wishes, protector provisions, and investment governance).
- Stamping. The trust instrument is stamped at a fixed €430.
- Onboarding of assets. Transfer of shares, cash, portfolio assets, or other property, observing any third-country formalities.
- Registrations. If applicable, handle CyTBOR entries and any tax registrations.
Ongoing compliance (incl. CyTBOR)
Cyprus maintains the Cyprus Beneficial Ownership Register of Express Trusts and Similar Legal Arrangements (CyTBOR) under CySEC. Trustees must register and keep UBO information updated; access is restricted (competent authorities and obliged entities with proper basis), and it is not a public, open-search register.
Trustees also comply with Cyprus AML requirements in administering the trust.
Common use cases
– Shareholding platform for a Cyprus holding company (or a group across jurisdictions).
– Succession planning that avoids forced-heirship claims from other systems by anchoring validity and administration in Cyprus.
– Asset diversification with long-term governance where the settlor retains defined oversight without collapsing the trust.
– Philanthropy or purpose trusts with clearly stated objects.
How we can help
We advise on design, draft the deed and ancillary documents, act (or arrange for) Cyprus-resident trustees, handle stamping and onboarding, and manage CyTBOR/AML compliance and ongoing administration. For cross-border families or corporate groups, we coordinate tax and regulatory advice in each relevant jurisdiction.
