Cyprus Express Trust Proposal Set to Re-Energise the Wealth Planning Landscape

A new form of Cypriot trust - the “Cyprus Express Trust” - has been proposed by the Trusts Committee of the Cyprus Bar Association as part of a broader legislative reform currently under consideration by Parliament. This forms part of a wider initiative to strengthen the Cypriot wealth planning sector.

A key aspect of the proposal is the removal of the residency-based criteria currently embedded in the amending Cyprus International Trust (CIT) Law 20(I) 2012, which provides that neither the settlor nor the beneficiaries can have been Cyprus tax residents in the calendar year preceding the establishment of the trust.

If the limitation is removed, both Cyprus residents and non-residents would be permitted to access the same trust framework, bringing Cyprus more into line with international trust jurisdictions where such distinctions are not typically applied.

Under the current rules, Cyprus-resident individuals are effectively limited to the Trustee Law (Cap. 193) of 1955, which reflects a more traditional legislative framework pursuant to the English Trustee Act 1925.

By contrast, the modern CIT Law provides a modern and commercially practical alternative, including enhanced asset protection, flexibility of duration, recognition of settlor reserved powers and clarity in relation to non-charitable purpose trusts.

Updating this framework would reduce many long-term residents’ reliance on alternative jurisdictions or the 1955 Law, therefore providing an improved consistency in cross-border structuring involving Cyprus-based individuals - particularly in situations where a Cypriot nexus is commercially or practically required.

Overall, the direction and focus of this reform is to position Cyprus as a more competitive and versatile private wealth jurisdiction within the EU, whilst aligning more closely with established finance centres.

Further developments will be monitored as the legislative process progresses.