Cyprus: Cyprus International Trusts – Welcoming Changes To The 1992 International Trust Law

Last Updated: 9 November 2017
Article by Stella Kammitsi

On 9th of March 2012 the Cyprus Parliament enacted Law 20(I)/2012 by which the Cyprus International Trust Law 69(I)/1992 was amended and modernized taking into account the needs arising from the international economy today and at the same time ensuring compliance with the EU law and directives.

Although the 1992 Law had introduced attractive provisions for international trusts after almost two decades there was a need to upgrade the law and to clarify certain areas of ambiguity and uncertainty as well as to remove certain limitations and restrictions.

Revised requirements for establishment of a Cyprus International Trust

The revised requirements for establishing a Cyprus International Trust (CIT) pursuant to the amended law are quite clear:

  1. The settlor must not be a permanent resident of Cyprus in the calendar year which precedes the year in which the trust was created;
  2. At least one of the trustees must be a permanent resident of Cyprus during the whole duration of the trust;
  3. No one of the beneficiaries must be a permanent resident of Cyprus in the calendar year which precedes the year in which the trust was created.

Prior to the amendment there was a requirement that the settlor and the beneficiaries (with the exception of charity) should not be permanent residents of Cyprus and this was causing difficulties if the settlor or any of the beneficiaries were subsequently becoming residents of Cyprus.

There was also a requirement that the property of the trust does not include immovable property located in Cyprus which has been deleted in the new law.

Reserved Powers of the Settlors

The amendments have introduced new provisions which have reserved extensive powers for the settlors enabling them to revoke and/or modify any of the trust terms and to instruct the transfer, distribution or payment of income or capital from the trust property.

Furthermore the settlor is granted with the explicit power to appoint and/or remove a trustee, a beneficiary or a director of any of the companies that belong to the trust structure and to issue binding instructions to the trustees in connection with the exercise of any power in relation to the trust.

The settlor is also given the right and the power to change the applicable law that will govern the trust and the forum of the management of the trust.

Powers of Trustees

The powers of the trustees of CITs have also been extended by virtue of Section 8 of the 2012 Law pursuant to which the trustee may now hold, maintain or invest in movable property in Cyprus and abroad, including shares in companies formed in Cyprus and in real estate located in Cyprus or abroad. It is important to note that under the 1992 Law it was unclear whether trustees could invest in movable or immovable property in Cyprus.

More specifically the new law provides that unless the instrument creating the trust provides otherwise the trustee has the power to:

  • Invest at any time the whole or any part of the trust funds in any kind of investment as he would have done so if he were himself the absolute beneficiary of the assets of the trust;
  • Vary the investment or retain it in its original state;
  • Hold, maintain or invest in any movable property in Cyprus and abroad, including shares in companies created in Cyprus and in immovable property located in Cyprus of abroad.

Duration of Trusts

Pursuant to the 1992 Law a CIT could be valid for up to 100 years from the date of its creation (subject to certain exceptions). The 2012 Law abolished all restrictions on the duration of trusts and for trusts created on or after the amendment there is no limitation regarding the duration of the continuation of the validity and enforceability of the trust. Furthermore no rule against perpetuity or long term investment or any equivalent principle or rule shall apply to a trust or to any advancement, distribution, payment or disposition of property from the trust.

Subject to express terms of the trust to the contrary, no concession, distribution, payment, holding or disposal of the income or capital of the trust to another trust is invalidated merely by reason that the other trust continues to be valid and enforceable after the date on which the first trust must cease to exist.

Charitable Institutions

The 2012 Law extensively redefines charitable institutions. It provides that a CIT is deemed to be a charitable institution where it has as its main objective of achieving one or more of purposes set out in section 7(1) of the Law such as the prevention or relief of poverty, the advancement of education, the advancement of religion, the advancement of health or the saving of lives, the advancement of art, civilization, cultural heritage or science, the advancement of the protection or improvement of the environment, the advancement of the welfare and the protection of animals.


Confidentiality has been preserved under the amendment and pursuant to section 11 of the law the trustee, the protector, the supervisor of the performance of the trust or any other person are forbidden from disclosing to any person not legally entitled any documents or information regarding the trust.

Disclosure can only be made where the instrument creating the trust provides otherwise or when a court order for disclosure is issued or where a request is submitted by a beneficiary to the trustee for the disclosure of the accounts of the trust or for any documents or information

relating to the proceeds and payments made by the trustees which form part of the said accounts. In such a case the trustee shall have the power to make such disclosure only if in his opinion it is necessary and it is for the best interest of the trust.

Registration requirements

Pursuant to section 12(2) of the Law the instrument creating a CIT is liable to a stamp duty of EUR 430.

Furthermore the new Fiduciaries Law of 2012 (as amended by virtue of Law 109(I)/2013) has introduced a registration requirement for trusts and provides that within 15 days from execution the trust must be registered at the relevant Cyprus Authority. It is important to note that the only information that is disclosed is the name of the trust, the name and address of the trustee, the date that the trust is set up, the date upon which the governing law of the trust may be amended and the date of termination of the trust. All other information pertaining to the trust is not disclosed for the purposes of the registration and according to the law is kept confidential.

Tax benefits

Following the amendment:

  • The income and gains of a CIT derived or deemed to be derived from sources inside and outside of Cyprus shall be subject to all taxes imposed in Cyprus in the event that the beneficiary is a resident of Cyprus (section 12(1)(a)).
  • Where the beneficiary is not a resident of Cyprus the income and gains of a CIT derived or deemed to be derived from sources inside the Republic shall be subject to all taxes imposed in Cyprus (section 12(1)(b)).

These tax provisions in the law mean that a Trust with non-Cyprus residents and income from non-Cyprus sources will be exempted from Cyprus tax.

Selection of applicable law

The trust shall be governed by the law selected by the settlor which selection may be express or implied by the terms of the instrument creating the trust. The express and implied selection of the laws of Cyprus shall be valid, effective and final (notwithstanding the circumstances).

In the instances where no applicable law has been selected or where the law that has been selected does not make provision for trusts or where the selected law does not make provisions for the specific category of the trust (in which both cases the selection of law shall not be valid) the trust shall be governed by the law which is more closely related thereto

According to the new section 12A(4) the factors that need to be taken into account for the purpose of determining the law which is more closely related to the trust are:

  • The state in which the management of the trust is carried out as prescribed by the settlor;
  • The state in which the assets are located;
  • The country in which the trustee resides;
  • The purposes of the trust and the countries where these needs to be implemented.

Jurisdiction and governing law of the trust

A new section 12B has been introduced specifically providing where the Cyprus courts shall have jurisdiction (unless the instrument creating the trust provides otherwise) without prejudice to the provisions of the EC Council Regulations No. 22/2001 on jurisdiction and enforcement of judgments.

Furthermore according to the amendments all matters arising in relation to a CIT shall be determined in accordance with the laws of Cyprus, without reference to the applicable law of any other jurisdiction. Therefore, any matters regarding the validity, interpretation or effect of any trust or transfer will be decided by the laws of Cyprus.

The fiduciary powers and duties of trustees are also now regulated solely by the laws of the Republic of Cyprus. It is also important to note that according to the law no CIT is void or voidable because it is contrary to any law of any other jurisdiction.

If the terms of the trust so provide the applicable law of the trust may be changed to or from the law of Cyprus provided that:

  • In the case of a change from the law of Cyprus to another law the new applicable law recognises the validity of the trust and the respective interests of the beneficiaries;
  • In the case a change from another law to Cyprus law such a change is recognised by the previously applicable law.

Variation of CITs

A trust may be varied in any way provided by its terms or by the court subject to the exercise of its discretion upon the filing of an application approving any arrangement which varies or revokes the terms of the international trust or enlarges or modifies the powers of management of administration of trustees

Application of amended trust law

The changes brought forward by the 2012 Law apply to all CITs irrespective of the date of their setting up and its provisions do not in any way affect the validity of any distribution or transfer which took place prior to the enactment of the 2012 Law.

It is expected that with these amendments Cyprus will become an even more popular and attractive trust jurisdiction taking into consideration the simplified procedure for setting up a CIT, the relaxed provisions in the new Law and the favorable tax benefits that the CITs can enjoy.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
A. Danos & Associates LLC
Patrikios Pavlou & Associates
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Practice Guides
by Mondaq Advice Centres
Relevancy Powered by MondaqAI
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
A. Danos & Associates LLC
Patrikios Pavlou & Associates
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions