As per the Cyprus Law there is no definition of the meaning of trusts however with the development of case law it is said that it is a structure whereby the holder of a property has an obligation to manage that property for the benefit of another. The validity of a trust will depend on the three certainties as they exist in the U.K. common system namely certainty of intention, certainty of subject matter and the certainty of objects.
As regards to international trusts, an international trust is described as a trust created by a non-resident settlor for the benefit of non-resident beneficiaries. What is specifically stated in the law as to international trusts is the following:
(i)The settlor of the international trust must not be a resident of Cyprus in the year preceding the year of the creation of the international trust;
(ii) There must be at least one trustee resident in Cyprus at all times and
(iii)No beneficiary, other than a charity, should be a resident of Cyprus in the year preceding the year of the creation of the international trust.
There are a number of advantages to a Cyprus trust including for example that the trust cannot be set aside by the settlor’s creditors unless and to the extent that the creditors can prove that the trust was created specifically for the purpose of defrauding such creditors or even for example the fact that a trust under Cyprus law may be removed from the Cypriot jurisdiction.
For further information on this topic please contact Ms. Nada Starovlah (firstname.lastname@example.org) at SOTERIS PITTAS & CO LLC,
by telephone (+357 25 028460) or by fax (+357 25 028461)