Amendments to the International Trusts Law
On March 08, 2012, the House of Representatives enacted the Cyprus International Trusts (Amending) Law of 2012, L.20(I)/2012 reforming the International Trusts Law of 1992, L.69(I)/1992. The Amendments are effective as of March 23, 2012.
It is expected that these Amendments will enhance the position of Cyprus as an international business centre and restore Cyprus as an attractive location for the establishment of trusts.
Major changes to the law
The new Law builds has introduced many new features. The most important of these new features are summarized below:
1. The settlor and the beneficiaries or any of them of a Cyprus International Trust may become resident in Cyprus.
2. All questions in relation to a Cyprus International Trust will be governed by Cyprus Law and Cyprus Courts will have jurisdiction.
3. A settlor is enabled to, inter alia, reserve powers to himself, retain a beneficial interest in trust fund, or to act as the protector of the Cyprus International Trust without impugning the validity of the trust. The Amendments explicitly provide that the reservation of any powers shall not be construed as “intent to defraud” the Settlor’s creditors
4. 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.
5. The new Law applies to new and existing Cyprus International Trusts irrespective of the date of their creation and do not prejudice the validity, of any prior valid disposition or transfer.
The new International Trust Law enhances the position of Cyprus as one of the most attractive jurisdictions worldwide to set up and operate an International Trust. It is expected that it will channel new investment in Cyprus and further enhance its position as an international business center.