Feod Group Provides Comprehensive Services for Establishing International Trusts with Full Confidentiality
✓ Jurisdictions: Cyprus, Malta, Gibraltar, Guernsey, Isle of Man, Saint Kitts and Nevis, British Virgin Islands
We offer the creation of trusts and funds through accredited structures and trustees in the above jurisdictions.
Feod Group includes Western lawyers, trust managers, accredited investment fiduciaries, and international tax planning experts.
Trusts and funds are utilized for various purposes, including:
Wealth preservation and asset distribution
Favorable tax regimes
Succession planning
Asset protection
Confidentiality
Philanthropy
It is better to ask ones than to search 100 times
If you have any questions, please contact us.
Definition of a Trust
In international terms, a trust is a legal arrangement whereby the settlor transfers their assets (the trust property) into the fiduciary ownership of a trustee, who is obligated to manage the assets for the benefit of the beneficiary or to achieve a specific purpose under the terms outlined in the trust deed.
Simply put, a trust separates legal ownership from beneficial ownership. The legal title to the assets is transferred to the trustee, while the beneficiary or beneficiaries have the right to receive income or benefit from those assets.
In some jurisdictions, such as Cyprus, the same person can act as the settlor, trustee, and beneficiary of a trust. However, such a structure must be approached cautiously, as courts may deem it a sham trust.
A trust is not a legal entity and does not require state registration. This is a key distinction between an international trust and a foundation.
Structure and Participants of an International Trust
Different types of trusts vary in their characteristics, but the basic structure consists of the following participants:
Settlor The settlor is the owner of the assets who establishes the trust and transfers their assets into it. Once the assets are transferred to the trustee, the settlor relinquishes ownership rights. However, the settlor may issue a Letter of Wishes to the trustee, providing recommendations on how to manage the trust assets, who should be appointed as beneficiaries, and how the assets should be distributed among them.
Trustee The trustee holds and manages the trust assets for the benefit of the beneficiary or to fulfill the trust’s specific purposes.
Importantly, the trust assets are separate from the trustee’s personal assets and cannot be seized or claimed for the trustee’s personal debts.
The trustee can be an individual or a legal entity appointed by the settlor, acting according to the terms outlined in the trust deed. Multiple trustees can be appointed.
The trustee does not have the authority to alter the terms of the trust or derive direct personal benefit from the trust assets. They are also required to maintain financial records of the trust, referred to as the Trust Declaration.
Selecting the trustee is a crucial aspect of establishing a trust.
Protector While not a mandatory participant, a protector may be appointed by the settlor to oversee or limit the trustee’s powers and to replace one trustee with another. A protector can be an individual or a specialized company, and there may be multiple protectors in a trust.
The protector’s powers must be specified in the trust deed.
Beneficiary The beneficiary is the person who benefits from the trust assets or receives the assets themselves upon fulfilling certain conditions specified in the trust deed. Unlike settlors, beneficiaries have the legal right to file claims against trustees if necessary. There can also be multiple beneficiaries in a trust.
It is better to ask ones than to search 100 times
If you have any questions, please contact us.
Types of Trusts
International law recognizes several types of trusts. Let’s explore the main ones.
First, note that an “international trust” is not a separate type of trust. This term applies when the elements and participants of a trust are tied to different jurisdictions. For example, when a Ukrainian resident establishes a trust in Cyprus under Cypriot law, and the trust assets are located in a third jurisdiction, such a trust is referred to as an International Cyprus Trust.
Revocable vs. Irrevocable Trust
The key difference lies in the settlor’s control over the trust assets:
In a revocable trust, the settlor can reclaim the trust assets at any time.
In an irrevocable trust, the settlor relinquishes ownership and cannot retrieve the transferred assets.
Note that a revocable trust may be deemed a sham and considered fraudulent.
Fixed Trust
A fixed trust is a contractual arrangement where the trustee has no discretion in distributing the trust’s income to beneficiaries. The distribution of income and assets is strictly based on the settlor’s instructions and is allocated to specific beneficiaries over a predetermined period. Beneficiaries in a fixed trust are explicitly named.
Discretionary Trust
In a discretionary trust, the settlor and beneficiaries have no involvement in management, control, or decision-making. The trustee has full discretion to determine the amount and timing of distributions to beneficiaries. The settlor may issue a Letter of Wishes recommending specific beneficiaries and asset distribution shares, as well as appointing a protector.
Unlike a fixed trust, the names of beneficiaries in a discretionary trust are not explicitly listed; they may be identified by a category (e.g., “children of the settlor”). This provides additional confidentiality and protection for beneficiaries.
An international irrevocable discretionary trust is widely used for structuring, tax optimization, asset protection, and addressing issues related to Controlled Foreign Companies (CFC) and the automatic exchange of information under CRS rules.
Under CFC regulations, the settlor of such a trust is not considered a controlling person over the companies transferred into the trust.
Blind Trust
In a blind trust, control and management of the trust assets are entirely transferred to the trustee, who has full discretion over their handling. In some cases, the beneficiary is not even informed about the trust assets. Blind trusts are popular in the U.S. and are often used to avoid conflicts of interest, such as those arising from the professional or political activities of the settlor.
It is better to ask ones than to search 100 times
If you have any questions, please contact us.
Who Needs a Trust and Why? Benefits of an International Trust
Trusts are created for various purposes, including confidentiality, tax planning, asset protection, CFC rules compliance, and succession planning. While beneficial for many, one must also consider the costs of establishing and maintaining a trust under professional management.
Advantages of Trusts
✓ Asset Protection A trust is one of the best tools for protecting assets. Assets transferred to a trust no longer belong to the settlor and are shielded from creditors, lawsuits, former business partners, or divorce disputes. The settlor does not declare trust assets as personal property.
International trusts also protect assets if your country of residence is politically or economically unstable.
✓ Tax Planning An international trust provides several tax advantages and is a recognized tool for tax planning. With the proper structure, trusts can help avoid inheritance tax and minimize obligations related to income or capital gains taxes.
✓ Confidentiality The trustee, protector, and any other involved parties are prohibited from disclosing any information about the trust, its trustees, settlor, or beneficiaries, as well as details about the trust’s accounts and assets. The trust deed is not a public document and remains confidential.
Information or documentation can only be disclosed legally by court order in criminal or civil proceedings.
✓ Succession Planning Trusts can prevent the division of family assets and help avoid disputes among heirs.
✓ Foreign Investment Opportunities For example, a Cypriot trust can engage in investment activities and generate income. With a well-structured corporate setup, taxes can be minimized.
When properly structured, trusts can simultaneously address multiple objectives, including asset protection, tax optimization, and asset distribution for inheritance.
Contact Feod Group professionals for expert assistance!
In 2013, Anastasia Taran graduated with honors from the National University "Odessa Law Academy", earning a Master of Laws degree. She joined Feod Group in 2018 and has since gained extensive experience in international corporate, tax, and immigration law....
In 2013, Anastasia Taran graduated with honors from the National University "Odessa Law Academy", earning a Master of Laws degree. She joined Feod Group in 2018 and has since gained extensive experience in international corporate, tax, and immigration law.
