The main document regulating the activities of trusts in Cyprus is a law on trusts, which was adopted in 1992. At present, the law works with the amendments that were made in 2012.
According to the initial version of the law both the founder and the beneficiaries must not be Cypriot citizens. However, over time it became clear that many of the founders and beneficial owners would like to get the citizenship of Cyprus, which led to revisions. Currently adopted amendments enable founders and beneficiaries receive Cypriot citizenship a year after the creation of the trust. Trust must have at least one manager- a resident of Cyprus, during trust existence period.
International Trusts are not required to register in Cyprus, but from the trust agreement only state fee is charged. The existence of trust in Cyprus is not time limited. Trust in Cyprus is completely confidential. Right of access to accounts has beneficiary and complete information is disclosed only with the court judgment.
Cyprus law has precedence over international law in dispute settlement cases that provides trust protection. Trust in Cyprus is likewise protected from heirs and bankruptcy of the founder. The contract may be declared illegal only if the Cypriot court has evidence of concealment of property or criminal activity of the founder.
Founder of the trust in Cyprus is given considerable authority, including:
Abolish the trust or change its terms and conditions;
Manage the trust income and property, also with help of the trustee;
Acting as a director and to appoint the directors and other officers;
Appoint and dismiss managers, indicate beneficiaries, appoint observers and protectors;
Change the applicable law.
Trusts do not report on their activities in Cyprus tax service, tax payments are made throughout the beneficiaries. If the beneficial owner is a resident of Cyprus, he must pay all the necessary taxes and fees, if not- he is taxed only on income earned in the country.