A comfortable job can be a difficult starting point for entrepreneurship. For employees at the international technology companies now established in Cyprus, leaving a good salary to build a business means taking a risk the island’s growing prosperity may give them little reason to take. Yet their decision to do so could shape its next decade.

Alexey Gubarev sees that as unfinished work. Through TechIsland, he has helped advocate for changes that make relocation viable for whole families, including employment rights for spouses and incentives reaching beyond company owners to their employees. His attention is now turning toward what might persuade more people to become founders themselves.

Before we talk about Cyprus’s technology ecosystem, tell us a little about yourself and how you chose this island.

I moved to Cyprus in 2002, at 21, with my wife and our one-year-old daughter. Some of my business partners were moving here, and with a young family, the island’s sense of safety was a big attraction. We decided to try it. Twenty-four years later, two of my children have been born here, and it is difficult to imagine living somewhere else. Cyprus has become home.

When we arrived, there was almost no technology ecosystem. There were very few companies and very few people we could hire locally, so we had to bring employees from abroad. I had been working since I was 15, and in 2005, we began building the hosting and data center businesses that eventually led to Servers.com. We started with a $100,000 investment and sold the business in 2023 for approximately $200 million. Our customers and infrastructure were international, so building it involved a lot of travel, but Cyprus remained our base.

Later, we created the venture studio now known as Palta. One of the projects we supported from day one was Flo, the women’s health app. I remember meeting a man in the Maldives who showed us a picture of his son. He told us that he and his wife had struggled to conceive and that using the app had helped them. When you meet somebody whose life has been affected by something you helped build, it stays with you.

In the meantime, we’ve started multiple local initiatives, we have donated parks to the city, and my wife built City Friends Club, which organizes cleanups and works to keep the city clean. I am very proud of what she is doing. We have built our lives here, and we want to help make it a better place for the people who live here.

You have since helped build international businesses and co-founded TechIsland. What prompted you to take responsibility for the wider ecosystem, and what did you initially hope to change?

TechIsland was created by entrepreneurs who knew the industry’s problems. We had specific things we wanted to achieve and cared about the outcomes. That practical experience mattered because we understood what companies and their employees needed.

Cyprus already had advantages for company owners. Much of the work we pushed forward was about improving conditions for employees and middle management.

One example was the right of spouses to work. If somebody moved here for a job at a technology company, their husband or wife could face restrictions on working. We studied what other European countries were doing and explained why that needed to change. My own wife had experienced that frustration for years. For a family deciding whether to move, it makes a real difference.

What has Cyprus become particularly good at offering technology companies, and where is there still room for improvement?

There is now a good set of incentives and arrangements that help companies establish themselves here. Businesses are coming, and people want to stay. You can convince a company to move, but you cannot convince its employees to remain somewhere if they are unhappy.

There are still important gaps. School places are one of them. The population grew quickly, and the shortage became very serious. We also need better infrastructure, including roads, to keep up with that growth.

I would like to see more investment in technology education for local children. Five years ago, among my Cypriot friends, the careers people discussed for their children were medicine, law, accounting, or government service. Technology wasn’t a part of the conversation.

Now that is changing. Some of their children are choosing to study IT. I think that change in perception is very important, and bringing people into the country is one part of developing the sector. When local people start seeing technology as their own future, the change becomes much deeper.

You have argued that Cyprus needs stronger mechanisms for creating new technology companies locally. What would help experienced employees at international companies become founders themselves?

This is something I am concentrating on now. We have a lot of established companies, but fewer people willing to take the risk of starting from scratch. If you have a good salary and a good life, it is understandable to ask why you should risk it.

One or two major companies built from Cyprus could change that perception. I mean businesses that originate here, rather than companies that relocate here after becoming successful elsewhere.

We need more early-stage support, grants, and education. Plug and Play has opened here, with support from the government and from people including myself. It gives founders access to people who can help them understand what they could do better and faster.

Where has TechIsland made a concrete difference, and what remains difficult to solve?

Three changes were particularly important in the initial program. The first was employment rights for spouses. 

The second was the income tax incentive for employees. There was already a 50% exemption associated with an annual income threshold of €100,000. We explained that this was too high to reach much of middle management. Reducing the threshold to €55,000 made the incentive relevant to many more people considering a move.

The third was a clearer route to citizenship for people who live here, learn the language, and become part of the community. For people building their lives in Cyprus, especially those coming from countries affected by war or instability, that long-term security matters enormously.

The problems keep changing. You deal with one issue and another appears. The next area where I would like to see more progress is support for startups. 

As establishing a company across Europe becomes simpler, what will founders need to find in Cyprus to choose it as their base?

Setting up here is already relatively straightforward. What also matters is the life people can build around their work.

We see interest from people in the UK and northern Europe. The climate is part of the attraction. I have had enough cold weather in my life! But quality of life is broader than that. People want to build something and still have a life outside work. Being able to go for a swim in the morning matters to some people more than others might expect.

The technology community has also become a much stronger reason to come. A favorable tax arrangement alone does not give you that community. Cyprus now has companies across gaming, software development, and other industries, with people who understand each other’s businesses.

When I arrived, if I needed somebody, I generally had to bring them to Cyprus. Today, there is a local market for talent. That is a major difference.

Does Cyprus now have the talent to support companies that want to establish and grow there?

The chances are much better than they were five years ago. We still need to bring people in for certain specialist roles, but the difference is substantial.

Previously, you could come here and struggle to find the team you needed locally. Now there is a much more realistic opportunity to recruit people already in the country and start building a business with them.

Imagine you are talking to a CEE entrepreneur. What should they understand about access to customers, capital, and experienced people before choosing Cyprus?

Access to people is reasonable now, and people are often willing to move here. Access to capital is more limited than in markets such as Germany or the UK. 

But I have done business in many countries, and I find the administrative side here manageable. As part of the European system, Cyprus has standards and processes that will be broadly familiar to somebody coming from another European country. There will be differences, but it is not an entirely unfamiliar environment.

One adjustment people do notice is driving on the other side of the road. That can take a little time!

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