We talk to startups and investors, you get the value.
Oleg Reshetnikov, an international partner of investclub.vc, is known for gathering a large Russian-speaking IT community in Cyprus. We talked with him about how the startup ecosystem is developing on the island, about the new Relocate.cy project, the further development of the community and the benefits of Cyprus for IT companies.
We talk to startups and investors, you get the value.
Before moving to Cyprus, I wasn’t involved in the IT industry and only in the last year before moving I got into it. The CypRus_IT project, a community of technology entrepreneurs, I started as a beginner, was organizing meetings and creating a community more for myself. Since it was done for myself, it apparently turned out well.
It all started with the fact that I started meeting interesting people with whom I would like to talk. Later, as soon as people had a need to get to know each other, I realized that I could already organize meetings and create a community on this basis. In our community, people can exchange information, do collaborations, interact with each other, invest in projects, find a job: by doing so, I create the right conditions and interest to come back.
As of today, we’ve already had 170 offline meetings. The meetings are held regularly, every Wednesday, except for the 10 weeks of lockdown in Cyprus. In total there were more than 9,000 visits, which is more than 2,000 unique people. People come on their own, bring acquaintances — it all works because we have the opportunity to stably hold meetings: at the same time and in the same place. Many come here for informal networking and communication and, getting what they expected, begin to trust our community and recommend it to others. Almost everyone who comes here, becomes an ambassador. Among businessmen, founders, entrepreneurs and business angels trust and personal recommendations are of very high value.
Currently, there is a registration of a non-profit organisation CypRus IT Association. We’ve also launched Relocate.cy, a service that helps relocating IT-companies, startups, freelancers from all around the world to Cyprus. We cooperate with qualified lawyers, who work with IT and understand all the problems and expat difficulties in Cyprus. We’re still aimed at the Russian-speaking audience but we’re planning to develop it in other languages too.
After the project launch announcement, we’ve received quite many applications from both freelancers and companies. With some we’re in the middle of the negotiation process, with some contracts are already being signed, and the process of relocating has begun. This option is most suitable for small and medium-sized companies and especially for startups.
Usually, startup founders are good developers or visioners of their product, but never operational managers. When they have questions about how to get a startup visa, open a bank account, they make mistakes, waste time and resources. We offer packages with the services of our lawyers on a turnkey basis: a startup simply writes off this as an expense and then shows it to its investor. At the same time, he isn’t distracted from the development process — and this is important. Large companies go through all the procedures on their own, since they have their own staff of lawyers, and they simply turn to us for advice.
We can say that my community acts as a headliner in building Cyprus IT cluster. It is a long and hard way to go, but nevertheless, we manage it step-by-step — at least, we have our social network. When moving to a new environment, expats have a problem, when they don’t know anyone in Cyprus (this is especially problematic for their families), and it is largely solved due to everything that has grown around the community: a huge number of chats, people, events , side projects. CypRus_IT is the entry point where you can find everything you need, get it, learn it and then apply everything on practice.
Currently, a great number of mass media is gathered around the community, for example, our YouTube channel, where we have interviews with founders and projects’ CEOs. We also have many Telegram-chats and other thematic channels.
There are some communities with the founders of which we communicate, sometimes we visit each other’s events. I think now we will be interacting more and more. Cyprus is changing its priorities in terms of how the state will make money. During the last few years, they were earning money mainly on tourism, which has now practically disappeared, and on citizenship by investment, and on the so-called “golden passports”. The program has now been suspended and is being revised.
We are actively initiating interaction between IT and the state. Cyprus may not be a Silicon Valley, but a more attractive place for IT innovation. The interest of the local Cypriot community is noticeable, as the people understand that this is the future and the IT companies located in Cyprus will bring benefits, jobs, smart people to universities, “fresh blood” and, of course, money.
First of all, Cyprus is a perfect “climatic refuge”, as you can simply move here to live. Cyprus is politically stable and socially good. Now there is a startup visa, its second edition.
For IT companies and startups, the state gives the opportunity to protect their intellectual property according to “British law”. Apart from Cyprus, this opportunity is only available in Malta and the UK. “British Law” allows IT companies to protect, transfer, sell, buy their intellectual rights and attract investments for them.
The second significant factor: Cyprus has a fairly low income tax — 12.5%, which can be reduced under certain conditions to 2.5% in terms of the development and sale of intellectual property. This case is, of course, difficult, but our lawyers know how to do it.
The third important factor: tax on dividends for foreigners — 0%. This creates a good environment for owners of IT companies and startups. In the second edition of the startup visa, the conditions for visitors have been greatly mitigated. However, we continue to work to convey the state that adjusting the conditions in a more loyal direction will make a startup visa even more attractive.
Now, a person can come to Cyprus and start creating their own startup. If the company already exists, then you can organize a relocation, if not, then it is necessary to create and open a company from scratch. This is a clear diagram for those who already stand the ground. If you are a freelancer, you can come to Cyprus as a visitor (here is a clear visa program for foreigners), show that you have income from abroad, like a freelancer, and get the right to live in Cyprus for a year (temporary residence permit). Every year this right is renewed and after 7 years it makes it possible to apply for Cypriot citizenship.
Another option is to apply for a startup visa. In general, there are simple requirements, one of which is the volume of foreign (non-Cypriot) investments in a startup in the amount of at least €20,000.
Another important plus of Cyprus is the English language. Although it is not a state one, all state bodies in Cyprus accept documents in both Greek and English.
Cyprus has its own local investment environment, you can find all the links to funds and business angels in my previous interview with Startup Jedi. Several venture funds’ offices with representatives are located here, but this doesn’t mean that they invest only in the Cypriot projects, as they operate all over the world. In this case, coming to Cyprus doesn’t mean that a startup can find investments here, but rather an opportunity to obtain a visa and register a European-level company with access to Europe, which is understandable and pleasant for future investors.
In general, there are many business angels here, and you can try to establish contacts, but so far there is no developed model or club, so there is a cooperation among CypRus_IT, Rocket DAO and several other partners. We send interesting projects that we find in accordance with niches of different partners. We have signed many partnership agreements and, depending on the level of the project itself, you can simply introduce or recommend someone to someone. So far, the level of personal networking is more active here.
First of all, it is an opportunity to send interesting startups to investclub.vc and conduct joint offline events. Last year, our interaction was quite interesting, Rocket DAO brought several startups to Cyprus. As far as I understand, there are even signed preliminary agreements with some of them. Most importantly, all startups have received good feedback. And now, observing their development, we can see that they have applied something in practice and have made progress. So such offline interactions with our Cypriot IT get-together are bearing fruit. This was our first pilot event and it worked well. This year we planned to do several joint events, but due to the world situation, we are still on hold.
We say that Buzzguru is my “godchild”; this company started after I introduced the founder of the company to current investors and partners, and also helped with employees. Then the guys had a working model which had to be developed and improved. Buzzguru started as a marketplace for working with influencers, but now they have made a pivot and specialize in analytics of working with them. The company is well known in the Belarusian IT community, they have many integrations with bloggers. The startup was initially launched in Cyprus, but after another pivot, a small office remained here, and most of the employees relocated to Minsk.
Yes, I have some experience. I came to Cyprus as a freelancer and started a company here — resilient advertising agency. In half a year, I attracted quite good investments (I can’t name the numbers and the investors). All this worked for more than a year and then I closed the project, preliminary having returned all the investment. During the company’s lifetime, we were a profitable organisation: we had a good valuation and a high multiplier at the current market.
Currently, I see myself more an organiser of the present ecosystem of Cyprus, where the system of separate elements assembles into one unified whole. My goal is to make Cyprus more attractive to people and to myself. If through our joint forces of IT companies, freelancers, startups we can better communicate with the Cypriot government, and it will make advances towards us, it will be a win-win situation.
While we were preparing the article to be published, it has come to our knowledge that the government of Cyprus improved conditions for IT companies. Now, companies have the right to hire citizens from other countries, including IT specialists, with minimal formalities.