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Introduction: The Evolution of Wealth
As global wealth continues to grow and diversify, high-net-worth individuals (HNWIs) and families are increasingly turning to Family Offices as a sophisticated solution for managing their financial, legal, and personal affairs. These structures offer a centralized platform for wealth preservation, succession planning, lifestyle management, and philanthropy.
Cyprus, with its strategic location, favourable tax regime, and strong legal infrastructure, is rapidly becoming a premier destination for establishing Family Offices. At AGPLAW, we have witnessed a significant rise in interest from private clients seeking guidance on how to structure their own Family Office; from understanding the benefits and operational models to exploring compliance, governance, and long-term legacy planning. We are proud to have served as both the starting point and the ongoing legal partner for numerous Family Offices, supporting them through every stage of their evolution. This article focuses on our hands-on experience to share key insights and best practices.
What Is a Family Office?
A Family Office is a private advisory entity that manages the wealth and affairs of a single family (Single-Family Office or SFO) or multiple families (Multi-Family Office or MFO). Traditionally associated with significant wealth, Family Offices today are accessible to a broader range of wealthy families seeking control, privacy, and strategic management.
Key Functions Include:
- Investment management and asset allocation
- Tax and legal coordination
- Succession and estate planning
- Philanthropy and foundation management
- Lifestyle and concierge services
- Risk management and compliance
In Cyprus, the SFO model is particularly attractive to nationals from across the globe, including Europe, the United States, Latin America, Africa (notably South Africa), the Middle East, Asia, Ukraine, and Russia. These families are considering Cyprus not only for its advantageous tax residency programs but also for its exceptional quality of life, legal stability, and strategic access to international markets.
Why Cyprus? Strategic Advantages for Family Offices
Cyprus offers a compelling mix of legal, fiscal, and lifestyle benefits that make it an ideal jurisdiction for Family Offices:
1. Attractive Tax Regime
- Corporate tax rate of 12.5%
- No inheritance or estate tax
- Capital gains exemptions on securities
- Non-domicile regime: No tax on dividends or interest for up to 17 years
2. Legal and Regulatory Strength
- Based on English common law, offering predictability and familiarity
- Strong asset protection through Cyprus Local and International Trusts (CITs)
- Over 60 double tax treaties for international tax planning
3. Strategic EU Location
- Gateway to Europe, Asia, and Africa (four hours to the UAE and less than five hours to London)
- Full access to the EU single market (EU member state since 2004)
4. Business Facilitation Scheme (BCS)
- Simplified immigration and employment regime for third-country nationals
- Ideal for staffing the Family Office with international professionals
Structuring a Family Office in Cyprus
A Cyprus-based Family Office typically includes:
- Management Company
- Holding Structures
- Investment Vehicles
- Philanthropy Vehicles
Who Should Consider a Family Office?
A Family Office is ideal for:
- Families with significant wealth and assets
- Entrepreneurs separating personal wealth from business risk
- International families with cross-border tax and legal needs
- Families with minor children or complex succession goals
- Art collectors, real estate investors, and luxury asset owners
- Philanthropic families seeking structured giving platforms
Benefits of a Cyprus-Based Family Office
| Benefit | Description |
|---|---|
| Tax Efficiency | Low corporate tax, no inheritance tax, and favorable non-dom regime |
| Legal Protection | Trusts and foundations shield assets from litigation and political risk |
| Succession Planning | Tools like Wills, trusts, and family constitutions ensure continuity |
| Operational Control | Centralized governance and professional management |
| Privacy | High confidentiality, especially with trust and foundation structures |
| Philanthropy | Formal vehicles for local and international charitable initiatives |
How AGPLAW Can Help
At AGPLAW, we offer end-to-end support for establishing and managing Family Offices in Cyprus:
- Initial Consultation & Strategy: We assess your family’s profile, goals, and global footprint to design a tailored structure.
- Legal Entity Formation: We incorporate the management company, trusts, holding entities, and philanthropic vehicles.
- Tax Planning & Optimization: Our tax teams ensure compliance and efficiency using Cyprus’s tax treaties and non-dom rules.
- Regulatory Licensing: If regulated activities are involved (e.g. investment management), we handle licensing with CySEC.
- Employment & Immigration: We assist with staffing under the BCS, including employment contracts and residency permits.
- Governance & Succession: We draft family constitutions, shareholder agreements, Wills, and trust deeds to ensure long-term governance.
- Philanthropy Structuring: We establish and manage foundations or associations aligned with your family’s values and goals.
We don’t just create legal documents, but we aim at becoming trusted advisors supporting our clients’ family evolving needs over time.
Case Study:
An Eastern European family with €100M+ in diversified assets approached AGPLAW to establish a Cyprus-based Family Office. We structured a Cyprus International Trust for asset protection, incorporated a management company as well as a BCS entity, and set up a foundation for their philanthropic work. Within 12 weeks, the family had a fully operational Family Office with tax-efficient structures, governance protocols, and a long-term succession plan.
Frequently Asked Questions (FAQ)
Conclusion: Build Your Legacy
As global wealth becomes more complex, the need for structured, secure, and strategic management grows. A Cyprus-based Family Office offers the ideal platform for families to protect, grow, and pass on their wealth.
At AGPLAW, we combine legal perfection, tax expertise, asset protection and regulatory compliance proficiency, backed up by personalized service exclusively aiming towards private clients’ support, to help our clients build a Family Office that reflects their values and secures their legacy.
The information provided by AGPLAW | A.G. Paphitis & Co. LLC is for general informational purposes only and should not be construed as professional or formal legal advice. While every effort has been made to ensure the accuracy and reliability of the information contained herein, the author, publisher, or any related parties make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability of the information. In no event will the author, publisher, or any related parties be liable for any loss or damage, including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this document/article. You should not act or refrain from acting based on any information provided above without obtaining legal or other professional advice.
