Sergey Kartashov, the CEO of Generation Partners, has a huge experience of working as head of an IT asset management company. He finds Cyprus as one of the best countries in the world for IT industry and believes it is also best for relocating IT companies, especially from Eastern Europe.
Factors that make a Country Attractive for Relocation
There are dozens of factors that make a country attractive to IT companies from all across the world. In recent years, Cyprus welcomed IT companies from Eastern Europe and various other parts of the world. According to Sergey Kartashov, the most important factors in this regard are tax policy, legislation, cost of living, infrastructure, and the existence of a developed IT community.
Based on these factors, countries are divided into various categories. The US, Lithuania, Estonia, the Netherlands, Germany, and Cyprus are among the most comfortable countries for IT. On the other hand, Poland, the Czech Republic, Portugal, and many others are in the second category. They provide a comfortable environment for IT. However, there are fewer facilities in these countries as compared to the countries present in the first category. Plus, some communities prefer particular places simply because they can find friends from their native country there and, therefore, can easier adapt to new conditions. This way, Cyprus has become the best destination for relocating IT companies, especially, for the companies based in Eastern Europe.
Tax Policy and IT Legislation in Cyprus
Cyprus is one of the best countries in the world in terms of favorable IT tax policy and legislation. It is very simple to register a company on this island. “The most famous benefit of Cyprus in the world is the flexible taxation system and the implemented IP-Box regime,” says Sergey Kartashov. It offers the lowest corporate tax rate on net income, 12.5%, in the world. The companies only have to pay the Value Added Tax (VAT) of 19% if they sell a product or service to an EU resident. However, there is no VAT if the purchaser is a non-EU resident.
Other Benefits offered by Cyprus to IT Companies
It is very easy to reach the island from any other country located in Eastern Europe. The average flight time from any Eastern European county to Larnaca or Nicosia is less than three hours. Similarly, the flight timing from the island to any other EU country is the same as for Eastern European countries. “It allows the company’s management and its employees to quickly get home and also to other countries to resolve business issues,” notes Sergey Kartashov.
The relocation of foreign companies to Cyprus injected huge money into the economy of the island. It is helping to actively develop its infrastructure to improve facilities for the IT companies. The local real estate market is developing continuously over time. The residential and office rent costs here are very low as compared to other countries. A two-bedroom apartment costs $1300-$1400 per month in the center of the city. The island also has affordable health and schooling facilities for those who come here with their families. Last but not least, Cyprus has a great community of IT developers. It is famous for having a community of game developers and Russian-speaking developers.