BridgerPay is the world’s first payment operations platform, built to automate ALL payment flows with a Lego-like interface, empowering ANY business to scale their payments, insights, and revenue with a codeless, unified, and agnostic software.
Ran Cohen: So thank you all for joining us and other events from Bridger around. This time we speak about startups in Cyprus and how to build a company in Cyprus. And we're happy to share our experience of building here a company that started with two people. And yes, we have Christos with us, you want to present yourself?
Christos Malikkidis: Yes. My name is Christos the business and legal advisor at Royal pine, Royal pine. It's a boutique advisory firm with offices in Cyprus and Greece. Although we were aspiring to be considered as a firm that provides global solutions to its clients. We have a strong global network of associates ranging from helping clients to creating open companies across the world, helping them with banking solutions. We have 25 professionals, ranging from lawyers, tax experts countdowns people with strong financial backgrounds. Our solutions vary from helping entrepreneurs how to correctly structure their idea into how to formulate their idea into a business to managing the state and wealth of high net worth individuals. We are quite strong in setting up funds and administering funds with them. Fans are also important for Cyprus other than, we also share a similar story with Bridger pay we, Royal pine six years ago was just six people and now we are 25 we aspire to be at 80 people by the end of 2030. We want to grow we open offices in other jurisdictions. And we look forward to get aligned with this vision of Cyprus to grow and bring more and more tech companies to the island.
Ran Cohen: More companies in the island I'm sure will bring more work. But yeah, this is a similar story, to grow a company. Okay, let's say see if we have questions before we start. Shy is asking us "what's going on with Cyprus and COVID restriction? I heard that mascara and tech and the Albrecht" I just learned that it was okay in the airport.
Christos Malikkidis: I think they're like in indoors in those places, especially in hospitals and then, care homes and maybe up there work as well or some maybe during, you're obliged to wear a mask. And I think Cyprus usually follows the European rules. So if anything happens in Europe, will be adopted in Cyprus as well.
Ran Cohen: Anyway, to the wild COVID, we basically continue to walk or slowly from the office was only one point of time when we diluted a bit. But it was very easy to continue working and growing given in COVID times in Cyprus. I think most than other places that with big lock downs and longer ones the hours was very sustainable.
Christos Malikkidis: Yeah, it's true that during the COVID, period, the period, before the vaccines where, you know, governments didn't know how to adapt to the new realities. I've met a lot of digital nomads, moving to Cyprus because they don't want to, they didn't, they couldn't cope through these strict lockdowns, either in London or in Berlin. So because we're working in these tech companies that took their laptop move to Cyprus, and at the end of the day, they even stayed so, and I think this is what Cyprus can really offer. And the best way to educate people about what we said before that Cyprus essentially is a nice place to live. I think everybody should explore and try leave to the island for a couple of weeks or months to see how life is here because it's easy to say but maybe difficult for someone who never lived here to understand.
Ran Cohen: Okay, so you're surprised about this. It's coming and going to get used to it. I think all of us. I was just I just came back from Paris on the way there you needed to put a mask on the fly on the way here you don't have. It's so confusing. Okay, so let's move on and get started. So Royal pine.
Christos Malikkidis: Yeah, I think we've touched before about Royal pine. As I said, we have entrepreneurs set up their business, we connect investors with interesting investment opportunities, we have some good and strong connections with VC funds and private equity funds, either through our experience of helping them setting up in Cyprus
Ran Cohen: The Company is built from lawyers, accountant that the company is built for lawyers and accountant people and like, who are the people in Royal pine?
Christos Malikkidis: In Royal pine? Yeah, as I said before, we have lawyers and accountants who have the skill and knowledge to set up a fund which is can be regulated either from the Cyprus authority or even from other jurisdictions like Cayman Islands, for example but can be set up even from us and we have the capability to administer those funds through very state of the art software. And we have our corporate people who can handle the whole process of setting up the funds and keep it running. And those funds are actively looking for opportunities. The startup ecosystem in Cyprus is now growing. It's true that we are not like Israel, that is a growth nation and you have so many developed companies but the Cyprus as a tech hub, or let's say as a business hub can give the opportunity to those companies from Israel to access European funds or from other even other countries, like CIS countries or even from the west from the US that want to invest.
Ran Cohen: The time in startup and Israeli startup today, which is probably precede looking for funds and looking for a place to establish his operation out of Israel. What services will you provide him for example, so it's just opening the company here in Cyprus or in bank account or it's also introduced productions to fund managers and how expensive is it?
Christos Malikkidis: Our Company, we want to position ourselves as a one stop shop. Because we have all the expertise to help the company in every element of corporate financial legal need that it may have, we can help an Israeli company as you have suggested to relocate to the island, to open up the company to open up the bank account to help with the migration procedure of the shareholders have the key employees that are coming, we can help them with introductions to investors, we can assist them finding, real estate for the people who are moving office space, all the internal accounting and financial support that they may need, ranging from HR support, payroll, internal accounting, so our solution is holistic. We want to take all the headaches that the CEO is facing
Ran Cohen: Product, focus on the products
Christos Malikkidis: Exactly focus on the product
Ran Cohen: It is good in the beginning. It's a must. There's a lot of headache. That’s there for sure.
Christos Malikkidis: We want the business people to focus what they're good at, to focus on the business plan, grow the company, we want to give them this peace of mind that we are there for them to undertake all these small challenges that can become real headaches, if you have to urgently tangle. And I'm sure you know what I'm talking about.
Ran Cohen: So, okay, we have few questions and, guys, please, we are happy to stop. If you have any question and answer them. So it will be on topic if it's off topic, and we will probably leave it to the end of the event. So how can royal pine help startup with opening a new entity or any other entities? So first of all, which entities can you help them open?
Christos Malikkidis: At the moment, we are present at setting Cyprus in Greece. So we can help directly with incorporation of a Cypriot direct Greek entity. We have strong partnership in other jurisdictions, such as Malaysia, Singapore, UAE, Dubai, Abu Dhabi, Cayman Islands, BVI, Malta but as I said before, our network is global in nature. And we have associates through our dealings about these years that we have created, a trusted relationship. And we know that where we cannot help immediately the client, we can connect them with the people that can help them because at the end of the day, we want to add value to the client. As far as EU entities are concerned, again, we are comfortable to say to client that we can help them to open up an entity almost anywhere in the EU.
Ran Cohen: Before we go to always question Is there a restriction for Israeli Startup Company to come in to Cyprus and alter?
Christos Malikkidis: Actually, from January 2022, it's even more, it's even easier to open up a company, and the government has created a business facilitation unit. So where you had to deal with five, six authorities now you have to deal with a dedicated team in the Ministry of Commerce
Ran Cohen: And what is under that?
Christos Malikkidis: So there you look, they're setting up the company, the social insurance, connect, enrolling the people to the social insurance with the residence permit the employment permit tax, of course, and actually, I was in touch with them last week. Wanted to get an update on the numbers, can you guess how many companies have moved to Cyprus in the last seven months? Six and a half? Can you give a guess can you get give a guess?
Ran Cohen: 100?
Christos Malikkidis: More.
Ran Cohen: Really? Wow. How many?
Christos Malikkidis: 760.
Ran Cohen: 760 companies do you know the spread of locations?
Christos Malikkidis: They Okay, predominantly they're from Russia and Ukraine. Of course they were has pushed a lot. But they're coming from Lebanon. And they're coming also from Israel. 10% is 100% on Trouble with Israeli investors. So 75 out of 760 can imagine 75 Israeli companies moved here. And if even more if you consider the minority shareholdings of some Israeli so it's, indeed a window of opportunity, because from January 2022, companies can move here with 100% of their employees, they don't have to hire local or European staff, which was a case before. There are some, of course, minimum requirements like salary, and at least some years of residence and continuous employment, to safeguard that you're not just gonna open up a company and then go out show and we're really, I mean, the whole business community of Cyprus is pushing for that. And, it's, it's creating an ecosystem, that if you bring the companies, then the funds will come because they're going to be like, Okay, there's targets. So we need to move there. Of course, it's gonna take time, in my opinion, the biggest challenge is to push young Cypriots while they're not schools to go and study these new sciences that are much more relevant, for example, data science, computer engineering, computer science. Because, yeah, I'm sure you're facing lack of talent. Everywhere, not just Cyprus, right. It's very demanding now. Yeah. So I think I'm very optimistic about that. And, as I said, Cyprus a nice place to live. So you have a good job, a nice place to live, then I think it's a good match.
Ran Cohen: Okay, so always asking us we have a data platform for enterprises. We need a local partner in Cyprus, how can I find data system integrator in Cyprus? Data System Integrator, I need to know more about that only. But if you want, you can refer that question to me after the event and I'll try to help you. We have a fine that he's asking us the any employment restriction visa for foreigners, what is the company tax rate? So we're speaking about why Cyprus? And I think it's a good question that yeah, related to that. I remember when we opened Bridger, it was 15 people that you could relocate, right?
Christos Malikkidis: It goes used to go with percentages. So it was 30%, non-European, and 70%. So if you had 100 People 70 have to be Cypriots and 30 non Europeans.
Ran Cohen: But how many visas could I apply to how many people could I relocate as a company now it’s changed
Christos Malikkidis: Now its change. Now it's fully
Ran Cohen: Now you can relocate as many as you want.
Christos Malikkidis: Yeah, if you are anywhere non-European. I mean, if you're a European company, because the European Union, you can move with no restrictions. If you're a non-European, you can still bring 100% of your people from day one. The only limitation is on the fifth year of relocation, you should have 30% of Cyprus or European but I think it's inevitable. If you move...
Ran Cohen: After five houses, you will start to hire locals.
Christos Malikkidis: And of course, nobody will kick you out if you don't match that 30%.
Ran Cohen: Tax I think it's one of the things probably you have on your course.
Christos Malikkidis: The corporate tax rate of Cyprus is 12.5%. Of course now with all them harmonization on a global scale, it's expected to be increased at 15%, which is still lower 12.5 is the lowest one of the lowest in the European Union. But other than the corporate tax rate, there are other more tax benefits personal for shareholders when they move here. They can even get tax breaks by actually eliminating any tax exposure when they move to Cyprus paying zero tax on dividends. And even for the relocated employees. Actually the cup the parliament last week passed the new law and if an employee earns more than 55,000 euros and as you know, the software developers are earning that amount of money, they can get a 50% tax break on the income tax, which the highest is 55% over 60k. So effectively, they're gonna pay 17%, which I mean, for European standards, it sounds like
Ran Cohen: That's not I think that's not the only thing you have also the IP region,
Christos Malikkidis: Of course, yeah, you have the IP regime, which can decrease effectively the corporate income tax to 2.5%.
Ran Cohen: Yeah only on the expense on that are related for development but
Christos Malikkidis: There is a formula and that's why we see a lot of big gaming companies in the one of the biggest names in the gaming industry are here
Ran Cohen: I think, look, people that are working in the especially in the FinTech area, building software on subscription models. These are the type of software that can enjoy the cyber regime. And it's very much built for those type of FinTech companies. It takes time to get it approved. But once it's done, then yes, a good part of your income is going to be reduced taxed.
Christos Malikkidis: Yeah, because you license the IP rights to and also you said FinTech, could be regulated. So if you come to Cyprus, you can freely passport in the European Union your product without having to get licensed to every, every jurisdiction. And Cyprus is quite flexible. And welcome to new technologies. Questions? Kenny?
Ran Cohen: Eric, I want to second guys let us go over? We have Kenny asking, "Are there government schemes, incentive for startup in Cyprus? What are the requirements?" So I think that's the IP regime can is one of the schemes that gives that incentive. So it's not only 5% as a company tax is the baseline. From that baseline, you can reduce to 2.5% for companies that all the IP that is being sold on recording basis. So that's one very important skill and definitely provide an incentive for any company or any startup needs to console to be conservative on his, expenses and tax, and spend everything back on the product and people,
Christos Malikkidis: Although maybe a startup is not at that stage where it's already making profits, and we'll be worried of the profit tax or other incentives.
Ran Cohen: A start up and you make $10,000 a month and you will pay 50% tax on it, then yes, it's important for you, even if it's a startup because in the end, it takes out of your cash flow it takes out the money that you need to grow. And that is one of the biggest things that allows your company to utilize finance, I think much better than in other places.
Christos Malikkidis: Of course, I fully agree. But adding to that they're even incentives or the prior stage, even when you set up the company, at the beginning. There are some incentives introduced recently in the last years where you can the initial share capital you put in the company, you can deduct it for from the tax. And this is I think, very accurate
Ran Cohen: Deduct from the tax?
Christos Malikkidis: Yeah, there is a mechanism is called notional deduction. Yeah, something like that. My background is I'm not a tax expert. But yeah, it really helps. I have to come back to that check, maybe premier advisor if
Ran Cohen: There's zero tax on dividends, include income from offshore real estate, pay this rent. Pay this rent, I'm not sure that we can have the best one to answer and it's more like a tax question. Offshore real state and there is a booking an apartment. They are getting rent out of it. They need to pay something they need in Cyprus as an income from rent.
Christos Malikkidis: I think you can avoid the tax but you have to pay some defense sometimes called the UFC for the person. I'm not I don't have the answer here. But on the general question of Shai, whether you can get 0% tax on out of Cyprus dividends? That's correct, yeah, you can get zero tax on your [inaudible]. That's because we have a real estate
Ran Cohen: If you have a real estate in I don't know, somewhere else in Greece, you will get zero dividends basically, out of the revenues you get from that, I don't know as the reader the company, that building or apartment is registered.
Christos Malikkidis: Or outside real estate, you know, you may have come may have other ventures in Israel, that you didn't move them Cyprus and you're still a shareholder there. And you are earning some income back because you move in Cyprus.
Ran Cohen: Because you moved to Cyprus, you want to allocate it. Okay, so we spoke a little bit about Cyprus
Christos Malikkidis: And in Royal pine, let's go to Bridger pay yeah. Tell us your story.
Ran Cohen: So, Bridger. Bridger started three and a half years ago said in an apartment. So yeah, I had another company for Bridger and E-learning company that I sold. I was already in Cyprus. So it was easy for me to start the new venture here. But wasn't easy in any other aspects. So that was the only thing that was easy to be already. But the rest we had to basically do from scratch with a lot of mistakes. And a lot of things that we learned on the way. Bridger is a FinTech company, we basically built software that helps businesses around the world to manage and operate the payments. So there are a lot of companies around the world, they're all processing money in order to for people to pay for their services, different companies from many, many different verticals. Travel and E commerce and retail and marketplaces and governments, even city halls that we have that works with us. It really everything that is processing money online. And those company needs to integrate and connect and manage multiple payment providers and multiple methods in one checkout that they have in the website. And that's what we do, we basically provide them a checkout, which is unified, that can connect everything from one side, PayPal and JCC here in Cyprus and revolute. And any crypto exchange or I don't know, voucher or any payment solution buy now pay later that now is very much installments that people are doing basically every payment method available into one unified place. basically reducing all the tech resources and giving a business, the ability to like you said to concentrate on their product on their offering, and keep all their payments, pains and challenges with our software. So we've built it for almost, I think it was around eight months. Then we launched the beginning of 2019 first paying client in Bridger. And yeah today we started obviously to three people in the company me Aron the co-founder of Bridger who was with me in that my best venture and had so much knowledge and experience in payments. And we've basically had this problem in our old venture and we started connecting payments and we saw how hard it is and how the experience is so when you try to buy something even when you pay electricity bill here, they take you to another screen. We try to eliminate find a way to eliminate all those problems and yet we started Bridger three and a half years ago today it's around 80 People 50, 60 around in Cyprus already and it's growing fast. Yeah, we got funded from Israeli AVC and now in a round. So yeah, the company is growing fast. Today we are processing in 180 countries through our clients over a billion dollar a month in terms of processing volume connected to around 400 different payment providers in the world. So yeah, well
Christos Malikkidis: It’s a Cyprus success story, Will you allow me to say, secret success or?
Ran Cohen: Look for us, there is a long way to go. We see Bridger as an operation platform for any business to operate on. And there are many businesses around the world. So we see a long road ahead.
Christos Malikkidis: But even from small Cyprus, you can describe yourself as a company that has operations everywhere, right?
Ran Cohen: Yeah, it doesn't stop us to walk and produce a client or produce a product that any client around the world can consume and use. And we have clients from all around the world. And we work very strongly both with US and Australia. And in the end, this break, between the time zone allows us to catch both of them. So, again, I know that to grow any region, I would need to, to have food on the ground, we open just now an office in Melbourne, and we will by the end of the open an office in the US. But still, I could start an initiate the, these regions from Cyprus and I could do it well. So that helped us
Christos Malikkidis: What is the biggest? Okay, we discussed about the advantages of Cyprus and of leaving and having a business's Cyprus, you as an entrepreneur, what is the biggest difficulty you're facing here, but maybe the participants of this webinar would like to know.
Ran Cohen: In the end, it's I think it's all about people, you have all the environment or the terms you need to build a successful campaign. Now it's all new, it's only about the people. You're good people to come and to be very much connected to your company like you would try to do in any other place. Because Cypress has, it's an island, India, and it's an island, it's an it's a growing tech community, it's time for you to really feel it. Interview, for example, when you go when your people, we have this joke, when your people go down for lunch, they get, seven, eight offers from the rest of the building. And you, you're always in this pressure, I think here, you're out of that pressure, which is a good thing that, your people are going to not going to get so many offers from one side, but from the other side, you need those people and you need good talents. And that's, that will be a struggle that I think it will be forever even for companies that are right now in Israel. Although now in this time, basically, you're from one side, it's an opportunity for few companies that and for other companies that are laying off there are other companies that find those as an opportunity and hiring those people. So it's a transition time now.
Christos Malikkidis: So you would agree that it's very important that the strategy strategy on the Cyprus government is giving benefits not only on the shareholders that are moving the business but also to the people and the talent to make it attractive for them to come and work here and something we didn't mention before is that it's expected that the even the naturalization of non-Europeans is going to be decreased to five years before you leave things prosper seven years you could apply for the Cyprus passport. Now its five years can you speak Greek is four years it's gonna change it's expected to change so
Ran Cohen: Okay, in a few words, okay. I need to work on it.
Christos Malikkidis: Yeah, four years is nothing I mean time flies especially after COVID and the current lights seven years Yeah. So if you know Kalimera Kalimekhta it's fine
Ran Cohen: To keep that was born here its almost simple. Okay, Kenny is asking us how are non EU residents open businesses? I'm here on spouse visa wife in civil, but I don't have Cyprus passport do I have to use my wife as a director. So it's normally you ready meaning husband of a Cypriot
Christos Malikkidis: Of a Cypriot now if I think under what can...
Ran Cohen: If wife is Cypriot so they are eligible to open a business
Christos Malikkidis: yes if he has a residence right on the basis on the basis of his wife being here
Ran Cohen: Its not like a Non-European residence but how can you be a non. Even if he's a non-European can he then form his wife he's not getting a residence
Christos Malikkidis: If he's a non-European meaning like he's a third country national let's say someone from Australia or Israeli if the wife lives in Cyprus he can move on the basis on the spouse alright because his wife disappeared
Ran Cohen: And if he opens a company
Christos Malikkidis: Yeah it's fine because he has resident right
Ran Cohen: On his name?
Christos Malikkidis: On his name. If he has residents right on the basis of his wife he can open up a company and run business of course
Ran Cohen: Excellence
Christos Malikkidis: On his name.
Ran Cohen: Okay, yeah hope we few. Guys if you have any more questions we're happy to answer. Okay, the tax benefits we spoke about it and it's good to have the numbers in front of in front of you I think tax is one of the reasons to move to relocate the company it's not the only reason you want to adjust for tax, the other schemes for startup in many countries I think the reason to move in or to open it here is required to work and produce products and not have all the noise from around that I think consumed a lot of us as founders their ability to focus is one of the most important thing in the beginning of a company and I think that that's a place if we speak about Israel, we have also an office in Israel so it's very easy to commute between those offices and walk by and enjoy both works. So that's a possibility as well so just for you to know it exists and can happen okay questions guys. We're happy to answer any questions you might have
Christos Malikkidis: What about the post? What are they?
Ran Cohen: Let’s see the post eyes don't forget to answer the post. They're an interesting company can employ high skilled third country national earning a salary at least all I know that as it's 2500. So individually locating to Cyprus and commence employment with annual immunization exceeding 55 can benefit which is you said, yeah, what is it? 50?
Christos Malikkidis: Yeah. 50
Ran Cohen: Wow. That's crazy. So how much was will be the effective tax so if I'm ill and ya know, 70k years?
Christos Malikkidis: 70k means you pay the above 60 you pay 35 so you get that 50%
Ran Cohen: So 50% is up to 60 is up to 55?
Christos Malikkidis: No it's on your income tax. So if it's 55 and let's say under this rule you have to pay 15000 tax you are gonna pay 7.5 so you have the 50% factor
Ran Cohen: Cyprus is more than 100 days. Wow. This year was different. Okay, so let's go with the polls. Finding this company can employ highly skilled the first question the answer is 2500 euros. That's basically the minimum amount costs that you need to pay your employees when you relocate them
Christos Malikkidis: Under the new policy, so you can relocate all your income.
Ran Cohen: You can locate everyone. We said you get 50% benefit. You said it and you're right. How many days?
Ran Cohen: 340 days
Ran Cohen: Wow, yeah.
Christos Malikkidis: 340 its 100 days per year, which is nice, because you don't have to buy from the pharmacy, you have it for free.
Ran Cohen: Also the calories obviously. For any company, the percentage of the total number of employees can be 100?
Christos Malikkidis: 100% yeah all of them basically
Ran Cohen: You can bring everyone, personally which benefit of relocating to Cyprus, do you find more attractive? And you answer the attractive tax regime, the ease of doing business, and the generous, generous policies of employment. So that's what you answered. Let's see if we have more questions. No, we don't. So, guys, if you don't have any more questions, we will wrap it up here. Yes.
Christos Malikkidis: Thanks for inviting me was very, very productive talk. Of course, we touched before some of these elements, but I think we need more and more companies like you to be out there and give the story, their success story and actually making small Cyprus proud because you are here, you are part of the ecosystem. And it doesn't matter where you from, it matters where you live, and it matters, what families you're supporting. And we want more and more companies to come to the island and build this ecosystem and, the business community to support you through the whole journey.
Ran Cohen: And it's, it's good to see that the government is moving and making the steps, they took a long time to get there. But it's these steps now. Some of them can be game changers for companies that want that couldn't relocate everyone. And now it's becoming feasible and it's becoming something that case precede will definitely will seed companies will definitely consider. Great. So, guys, thank you very much. Thank you for joining us today. And if you have any more questions, you are always happy to ask us on our channel in our Facebook groups. So we'll be happy to answer we have another question. Let's say, Let's see from Shai. Thank you. So thank you, Shai. Thank you for participating as asking questions. It was good to see that the interest is here. And hope to see more and more companies coming here to Cyprus and helping us build the better ecosystem. Your company's good to see that there is companies leaving the island to support us. So thank you very much.
Christos Malikkidis: Thank you Ran.
Ran Cohen: Thank you guys. Bye bye.
BridgerPay is the world’s first payment operations platform, built to automate ALL payment flows with a Lego-like interface, empowering ANY business to scale their payments, insights, and revenue with a codeless, unified, and agnostic software.