Eternity Law International — News — Trust in Cyprus

Trust in Cyprus

Published:
January 29, 2020

In order to protect financial assets from risks of various natures, including political and commercial, as well as to eliminate claims for capital by family members, offshore trusts and funds are organized.

With the help of them, you can ensure that business transactions are protected from infringement of profits by your family.

Features of the distribution of income within the trust

Trusts are an organization of property, the proceeds from which are distributed in favor of a special person (beneficiary). It is also managed by a manager. The owner of the trust is obliged to cooperate with the manager who designs the transactions. That will bring the highest possible profit. It is clear that the manager receives a certain percentage from it for his work.

Any property can act as such a model of property, incomes from which are distributed in favor of another person. The only exception is that it is prohibited to use under the guise of trust property, the legislative basis of the state.

The owner of the trust can transfer his own property throughout his life or declare such a transfer after his death. In this case, the manager:

  • bears full responsibility for the fulfillment of the terms of the agreement;
  • has extensive authority over the management of operations regarding the multiplication of finance;
  • distributes the income of the trust in accordance with the instructions of the owner.

Under special conditions, the rights of the manager are transferred to another person.

Features of offshore funds in Cyprus

The Foundation is owned by a legal entity to whom ownership rights have been transferred from another entity. In order to found a foundation, a special council must be created to govern its work. A guarantor is also needed who takes action to safeguard the assets.

In the fund, its owner is represented by special advice – such a structure retains all the benefits of the trust, but receives benefits in the form of income from commercial activities.

The main differences between trusts and foundations in Cyprus

Despite the apparent similarities, trusts and foundations differ significantly:

  • the foundation requires state registration, the trust does not need it;
  • the trust provides for a contractual relationship between the manager and the manager. In the fund all matters are resolved individually;
  • in a trust, all information is closed to prying eyes. The foundation has two types of information – open and closed;
  • in trusts, the owner can receive income from his activities, and in a fund, property is collective property;
  • the duration of the trust must be extended, and funds, as a rule, work indefinitely;
  • the trust begins its activities only when it has property, and the foundation has the right to start its work from scratch;
  • the minimum contribution, when the fund begins its activities, is $ 10,000, the owner of the trust contributes to it the amount that he sees fit.

Registration of a trust and a holding in Cyprus

With the help of the holding, financial flows are organized and redirected. As a result subsidiaries are organized, which are located in various parts of the world. Holdings help solve income generation issues and choose the best taxation system.

To register a holding in Cyprus, you should:

  • provide data on the actual owner of assets and information on the future activities of the holding;
  • formalize a notarized new offshore holding company;
  • to enroll it in the register of the Chamber of Commerce;
  • automatically enter data into the fiscal authorities.

For a trust agreement, you need to draw up an agreement between the two parties:

  • the owner of the property transfers the assets to another party;
  • the manager accepts these assets and must manage them in accordance with the instructions issued by the owner.

The specialists of Eternity Law International will provide you with expert advice on the acquisition of an offshore trust, a European trust, opening a bank account for a trust, as well as further support of the activities of your trust at any stage of work.

If you have any questions or need advice on registering or buying a trust, call us at the numbers listed on the website, or fill out and send us the form located at the bottom of the page.

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