- What are some of the biggest issues &challenges you come across when planning for Chinese or Asian clients in general? What are the solutions that your jurisdiction provides for these issues?
The challenges faced are not in particular to Chinese or Asian Clients but apply to any client that is not familiar with the international business system and needs time to recognize and familiarise himself with the opportunities that are provided in Cyprus as an international financial centre, the legal framework of the Cypriot Laws, in particular for international business services and complex corporate structures for efficient tax planning.
The solutions that the jurisdiction provides are adopting a friendly and approachable method of promoting the jurisdiction to foreign clients. English language is spoken by all professionals and even the locals of Cyprus speak the language very well. Due to the increase of the Chinese market in the jurisdiction of Cyprus, directions, advertisement and signs have been established in the Chinese language.
Affordable and efficient visa schemes and receipt of EU passports packages have been offered and provided to foreign investors and HNWI making Cyprus a very popular jurisdiction for foreign investment in Cyprus, tax planning and asset protection.
- We understand that some jurisdiction focus on asset protection, while others focus on asset succession products. Does your jurisdiction have a better solution for asset protection or asset succession?
Cyprus is one of the fortunate jurisdictions to provide asset protection from forced heirship. Asset protection is established by the separation of the legal ownership from the beneficial ownership. For evident legal purposes the trustees of the Trust are recognised as the legal owners of the assets and the beneficiaries are protected by a vast body of legal rules that are effectively applied in the jurisdiction of Cyprus. An International Trust established under Cyprus Law can prevent the assets from passing to the heirs prescribed by law. It is also a good vehicle to provide a source of income to somebody for life, or saving money for future use for the children. An international Trust is an ideal tax planning tool for such purposes. Additionally after death, the probate procedures are costly, lengthy and public. Establishment of an International Trust in the jurisdiction of Cyprus avoids all these procedures and exposures.
Furthermore the validity of the International Trust or the transfer of disposition shall not be affected by the laws of succession or inheritance in force in Cyprus or any other jurisdiction, thus rendering the International Trust, immune from forced heirship rules.
The inheritance and succession Law of Cyprus as well as any other country do not affect the transfer or disposition of assets by the Settlor or the validity of the International Trust.
- When were trust and foundation law introduced in your jurisdiction?
Trusts & Foundations in Cyprus are initially enforceable by the Trustees Law of 1955, Cap.193. In 1992 Cyprus implemented the International Trust Law 69(I)/92 which was amended by Law 20(I) 2012 and Law 98(I) 2013 which introduced significant changes to the legal framework of the Trust. In regards to non-profitable foundations the appropriate law is The Societies and Institutions Law 1972 and 1997, and the Charities Law of Cap. 41of 1925.
Contributed by: Sergey Kolesnikov, Managing Director, Polymage Consulting
