A Trust is formed to legally create a relationship whereby one person or persons (the trustees) are appointed to hold, manage and safeguard the assets of a trust for the benefit of the beneficiaries. The assets of a trust can be in various forms, including shares, money, land or real estate. It is commonly used for tax planning purposes, for asset protection purposes, for confidentiality, for the protection of minors’ rights, for the protection from potential creditors, for preserving the family fortune and for protection from family members.
There are several types of trusts which can be set up in Cyprus depending on the structure the interested party would like to have.
When forming a trust a settlor, a trustee and a beneficiary should be appointed.
Settlor: the person who settles property on trust law for the benefit of the beneficiaries.
Trustee: the person who holds property, authority, or position of trust for the benefit of another.
Beneficiaries: natural person is entitled to the benefit of any trust arrangement.
The type of trust depends on the circumstances of the Settlor and the objectives he is trying to achieve in creating the trust.
Types of trusts:
- Discretionary trust;
- Fixed trust;
- Fixed and discretionary trust;
- Protective trust;
- The simple declaration of trust;
- Trading trust;
Cyprus International Trusts enjoy important tax advantages, providing significant tax planning possibilities to interested parties.