Cyprus Trust Roles

In a Cyprus Trust, especially a Cyprus International Trust (CIT), the main roles involved are as follows:

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Settlor

The settlor is the individual or legal entity who creates the trust by transferring assets to the trustee. In a CIT, the settlor must not be a resident of Cyprus during the calendar year preceding the creation of the trust. After establishing the trust, the settlor typically relinquishes control over the trust assets, although reserved powers (such as the power to replace trustees) can be structured into the trust deed.

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Trustee

The trustee is the person or entity (often a professional trust company) who holds legal title to the trust assets and manages them in accordance with the terms of the trust deed and for the benefit of the beneficiaries. At least one trustee must be a resident of Cyprus for a trust to qualify as a Cyprus International Trust. The trustee has fiduciary duties, including the duty of loyalty, prudence, and impartiality, and may also have wide discretionary powers depending on how the trust is drafted.

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Beneficiaries

The beneficiaries are the individuals or classes of persons who benefit from the trust, either by receiving income, capital, or other advantages. In a CIT, the beneficiaries must also not be Cyprus residents in the year before the trust is established. The trust deed can define fixed beneficiaries or give the trustee discretionary power to decide who benefits and when.

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Protector (Optional)

A protector is not mandatory under Cyprus law but is often included in more complex trusts. The protector’s role is to oversee the trustee’s actions and ensure they align with the settlor’s intentions. The protector may have powers such as approving distributions, changing trustees, or even amending trust terms. The use of a protector adds an extra layer of oversight and control without compromising the trust's independence.