Private Trust Companies in Cyprus: Regulation & Practice

Private Trust Companies (PTCs) have become a prominent and well-established feature of the Cyprus trust landscape, particularly in the context of private wealth structuring, family offices, and succession planning for high-net-worth individuals and closely held corporate groups. While Cyprus does not have dedicated legislation for private trustee companies, the Companies Law, Cap. 113 (“Cap 113”), the Trustees Law (Cap 193) and the Cyprus International Trust Law of 1992, as subsequently amended, offer a sufficiently flexible legal framework for their establishment and operation. A PTC is typically incorporated as a private limited liability company under the Cyprus Companies Law, Cap. 113, whose objects are limited to acting as trustee, and is established for the specific purpose of acting as trustee of one or more trusts connected to a single family or a defined group of related persons.

The increasing use of PTCs reflects a broader international trend in trust planning in or via Cyprus, whereby settlors and beneficiaries seek a balance between professional administration and retained influence over strategic decision-making. By interposing a corporate trustee that is controlled by family members or trusted advisers, a PTC enables the trust to benefit from the continuity, separate legal personality, and governance structure of a company, while avoiding the loss of familiarity and oversight that may accompany the appointment of an institutional trustee. PTCs also offer significant advantages in terms of continuity and succession. As corporate entities, they are unaffected by the death or incapacity of individual trustees, ensuring uninterrupted continuity and administration. Control of the PTC can be transferred across generations through shareholding arrangements, thereby facilitating long-term wealth planning and governance continuity.

Licensing requirements for PTCs

From a legal perspective, Cyprus law does not recognise PTCs as a separate or distinct category of trustee. A PTC is treated as an ordinary Cyprus company which undertakes the role of trustee, and its regulatory status is determined by reference to the general legislative framework governing the provision of administrative and trust-related services, particularly the Law Regulating Companies Providing Administrative Services and Related Matters of 2012 (Law 196(I)/2012) (the “ASP Law”).

Accordingly, the regulatory treatment of a PTC depends on a factual assessment of the nature and scope of its activities, as well as its ownership and control structure. The key considerations are whether the PTC is regarded as providing trustee or related administrative services within the scope of the ASP Law and whether it qualifies as an exempt entity under that Law.

The mere fact that a PTC does not offer trust services to the public and acts exclusively as trustee for a single family or a defined group of related parties does not, of itself, remove it from the ambit of the ASP Law. The central regulatory considerations are whether the PTC is regarded as providing trustee or related administrative services falling within the scope of the ASP Law and whether it qualifies as an exempt entity pursuant to the statutory exemptions provided therein. Cyprus adopts a functional regulatory approach, whereby emphasis is placed on the substance of the activities carried out and the manner in which the PTC is controlled, rather than on its label or formal description.

Where a PTC is owned or controlled by regulated professionals—such as advocates admitted to practise in Cyprus by the Cyprus Bar Association or members of the Institute of Certified Public Accountants of Cyprus —and the relevant statutory conditions are fulfilled, the PTC may operate without obtaining authorisation from Cyprus Securities and Exchange Commission (“CySec”). In such cases, regulatory oversight is exercised through the relevant professional body, primarily in relation to anti-money laundering and counter-terrorist financing obligations.

The fact that a PTC acts exclusively as trustee of trusts established by a single family or a defined group of related persons does not exclude the application of the ASP Law. Pursuant to section 4(4) of the ASP Law, trustee services provided by a company fall outside the regulatory scope only where the PTC’s activities are strictly confined to a family relationship, typically encompassing the settlor, the trustee, the trustee’s spouse, and relatives within the fourth degree of family relation In order to qualify for this exclusion, the trustee services must be provided on a private basis, must not be advertised, and must not be offered to persons outside the relevant family circle.

This exclusion reflects a clear legislative policy choice: family members acting as trustees of family wealth are not perceived as giving rise to the regulatory risks associated with professional or commercial trusteeship. The ASP Law therefore seeks to preserve the privacy and autonomy of family trust arrangements, while simultaneously mitigating the risk of abuse by prohibiting public offering or commercialisation.

Finally, where a PTC is not registered in Cyprus but is regulated in its home jurisdiction in relation to the provision of trustee services, and where a cooperation agreement exists between the competent supervisory authority of that jurisdiction and CySec or another Cyprus supervisory authority, the PTC is likewise exempt from the licensing requirements of the ASP Law, in accordance with section 4(5).

Irrespective of their licensing status, PTCs remain subject to the provisions of the Prevention and Suppression of Money Laundering Activities Law 188(I)/2007 must comply with all applicable obligations, including the conduct of customer due diligence in respect of settlors, beneficiaries, protectors and other relevant parties; the identification and disclosure of beneficial ownership; the application of enhanced due diligence measures in higher-risk scenarios; ongoing transaction monitoring on a risk-based basis; the maintenance of records for the prescribed statutory retention periods; and the timely reporting of suspicious transactions or activities to MOKAS.