When property interests are given away during life or at death, taxes are imposed on their transfer. Such taxes are known as estate and gift taxes. The simplicity of Cyprus's tax system, especially with regard to estate and gift taxes, is one of the major attractions for the many high-net-worth individuals and companies that choose Cyprus as their place of business or residence.
The Central Bank of Cyprus recently issued a circular which clarifies dubious and vague information regarding shell companies and entities in Cyprus and advises banks and service providers on how to deal with them. As Cyprus remains an attractive jurisdiction for registering offshore entities, the circular's revised definition of 'shell companies' will assist banks when opening accounts for international businesses and corporate service providers.
Typically, a parent's main concern is being able to pay for their children's education and ensuring the best start for them when they grow up and want to purchase property or launch their own business. One way to accomplish these goals is to set up a Cyprus investment trust (CIT), which allows a trustee to manage its assets for the good of the beneficiaries. Setting up a CIT for children is easy and allows parents to tailor a trust to fit their unique circumstances.
Cyprus international trusts, which are subject to the International Trusts (Amendment) Law 1992, provide a significant number of tax advantages and can be used as part of an international tax planning strategy. In order to estimate the tax that should be imposed on a trust, its specifications, purpose and any other relevant circumstances must be considered.
Cyprus saw its highest increase in gross domestic product in almost a decade in the first quarter of 2017. The dark days of the 2013 financial crisis appear to be in the past and foreign investment remains at the heart of government strategy, aided by factors such as the citizenship-by-investment programme, which will help to attract private investment in the property, retail and pharmaceutical sectors.