The Cyprus Trust LawOne Year On

Maria KyriacouAndreas Neocleous & Co LLC

The Law of Trusts in Antiquity

• The Greeks (Demosthenis case 365 BC)• The Romans (fideicommissum 200 BC)• The Crusaders (12th century)• The Anglo-Saxon legal system

The Law on Trusts Today

• The Trustee Law Cap 193 of 1955

• The International Trusts Law No. 69(I) of 1992 to 2012

STEP The law aims at further enhancingCyprus’s footprint as a leading trustjurisdiction since in contrary to mostjurisdictions transparency and authoritywill be granted from the law creating theTrust.

Total Serve - Cyprus Amends InternationalTrusts LawThe Cyprus House of Representatives passedlate last week the eagerly-awaited amendment

International welcome of the new LawPWC - Amendment of the CyprusInternational Trusts LawThe new Law builds on the existing veryattractive Cyprus International TrustsLaw and has introduced many newfeatures.

Andreas Neocleous & CO LLC - Reform of the Cyprus International Trusts Law of 1992The long-awaited reform of the Cyprus International Trusts Law, a muchneeded initiative, has finally become reality

DeloitteReform of the Cyprus InternationalTrusts. The most modern and favourabletrust regime in Europe

The effects of the new Law• New Trust Companies Registered• Increase in EU Family Trusts choosing the Cyprus Law

Cyprus International Trusts Cases &

UK Case Law

Key features of the new Trust Law (1)

• Removes any prohibition on settlors relocating to Cyprus after establishing a Cyprus International Trust;

• Makes clear that all questions relating to Cyprus International Trusts are to be determined in accordance with the laws of Cyprus;

• Protects against the application of foreign laws, such as forced heirship laws, as a matter of public policy;

• Allows the settlor to reserve powers to himself, to retain a beneficial interest in trust property, or to act as the protector or enforcer of the trust

• Removes any limit on the duration of a trust;

• Widens trustees' investment powers and, in particular, abolishes the prohibition on investment in immovable property in Cyprus

Key features of the new Trust Law (2)

• Powerful asset protection features

• 2 year “hardening period”

• Valid transfers unless intention to defraud is proved

• Claimant must show that he or she was a creditor at the time of transfer

• Unaffected by matrimonial property or succession laws

Uses of Cyprus international trusts

• Individuals– Preservation of wealth – Managing family wealth– Pre-immigration planning– High-risk professions– Pre- or post- nuptial arrangements– Testamentary freedom– Philanthropy

Managing family wealth

A Cyprus international trust provides an effective structure for managing family wealth with the following benefits:•Flexibility - reserved powers, choice of law•Protection •Unlimited investment powers•Tax neutrality•Perpetual existence•Inheritance tax avoidance

High-risk professions• Claims may emerge many years after the

event and be disastrous in scale- From doctors to accountants - From architects to businessmen• But also prudent for all It is not intended to offer a loophole to every settlor who wishes to avoid

his existing creditors. Instead, it is intended to offer a legitimate protection to persons who may be engaged in high risk professional activities.

The reform of the International Trusts

Law gives Cyprus the most modern and favourable trust regime in Europe, and restores it to the "premier league" of trust jurisdictions.