CYPRUS Law and Practice Contributed by: Alexis Erotocritou, Dafni Loizou and Georgia Demou, A.G. Erotocritou LLC
applicable. Relevant laws provide wide investment powers to trustees, which are largely similar to the powers that the settlor would have had prior to the creation of a trust. Additionally, the trustee(s) obliga - tions require good faith, prohibit any conflict of inter - est, and trustee(s) need to act in the best interests of the beneficiaries given that they are fiduciary in nature. Having said this, recently, trust deeds have explicitly outlined the trustee’s powers, which may expand or restrict the powers granted by statute. While trustees may use their powers quite broadly, they must act with the care and judgement of a prudent person managing their own assets. Professional fiduciaries are held to an even higher standard. It is useful to note that professional fiduciaries are licensed and monitored under CySEC, CBA or ICPAC, as applicable on a case-by-case basis. 6.4 Fiduciary Investment Generally speaking, trustees need to be prudent in their choice of investments, which is a principle enshrined in the Trustees Law. This empowers trus - tees to invest globally in movable or immovable assets as if they were the absolute owners. The “prudent” person standard means that the trus - tees invest the trust property in a similar way as a reasonable person would do when managing/invest - ing their own affairs and assets. It is not unusual for this standard to be interpreted more strictly due to the trustees’ fiduciary obligations. It is seen through case law that trustees have to priori - tise the beneficiaries’ interests over their own personal or ethical beliefs. 7. Citizenship and Residency 7.1 Requirements for Domicile, Residency and Citizenship Domicile Cyprus follows the common law concept of domicile of origin and domicile of choice. A person acquires a domicile of origin at birth and may acquire a domi - cile of choice by permanently settling in Cyprus with
the intention to reside indefinitely. For tax purposes, Cyprus also applies the non-dom test, where an indi - vidual becomes Cyprus- domiciled for SDC purposes after 17 years of Cyprus tax residency. Residency Residency in Cyprus can either be tax residence or immigration residence, as set out below. For individuals, Cyprus tax residency is generally determined by either the 183-day rule or the 60-day rule. Under the 183-day rule, an individual is tax resi - dent if they spend more than 183 days in Cyprus dur - ing the calendar year. Under the 60-day rule, applica - ble in 2026, an individual may also be tax resident if they spend at least 60 days in Cyprus, do not spend more than 183 days in any other single country, main - tain a Cyprus employment, business or directorship link, and have a permanent home in Cyprus, whether owned or rented. Immigration residence is separate from tax residency. EU/EEA citizens and their family members must apply for a Cyprus Registration Certificate if staying for more than three months, while non-EU nationals require the appropriate residence permit depending on their route, such as employment, study, family reunifica - tion, visitor status, digital nomad status, long-term residence or permanent residence. A Cyprus resi - dence permit does not automatically create Cyprus tax residency, and Cyprus tax residency does not by itself grant immigration residence rights. Citizenship Citizenship in Cyprus is obtained by the main routes of naturalisation by residence, marriage/civil partner - ship to a Cypriot, and Cypriot origin/descent. Cyprus no longer has a citizenship-by-investment “passport” programme. Cypriot citizenship by naturalisation through resi - dence generally requires seven years of lawful resi - dence in Cyprus within the previous ten years, plus a continuous 12-month period of residence immediately before submitting the application, and the fulfilment of additional conditions, including good character, a clean criminal record, sufficient knowledge of the Greek language, financial self-sufficiency, suitable
205 CHAMBERS.COM
Powered by FlippingBook