While the COVID-19 pandemic has caused global economic turmoil, Cyprus is also facing challenges owing to the global interconnectedness of its economy. However, the government is working closely with the Cyprus Investment Promotion Agency to support the revival of the economy and has taken measures to protect the value of individual investments during this economic crisis.
The Cyprus International Trusts Law is one of the world's most attractive legal frameworks, as it builds on the well-established English principles of equity and trusts. Under this framework, Cyprus international trusts can be created in most complex situations and enjoy many advantages that cannot be found in aggregate in other trust jurisdictions.
Cyprus has a complicated system of forced heirship in which a portion of a deceased's estate must be effectively passed to surviving family members according to a set system of inheritance. This forced heirship regime means that even if a deceased writes a will leaving a certain portion of their estate as gift to their spouse, their wishes will be deemed invalid if there are natural children who are entitled to a fixed minimum percentage of the estate.
Cyprus offers a number of tax incentives to high-net-worth individuals. For example, foreign nationals who earn €100,000 per annum from employment in Cyprus are eligible for a 50% tax exemption on their income irrespective of the status of their tax residency or domicile. Further, Cyprus is party to more than 65 tax treaties, which allows it to charge zero or minimal withholding tax rates on incomes such as pensions, royalties, dividends and interest received from abroad.
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.