Wargaming: The company that placed Cyprus on the gaming map

With over a decade of presence in the Cypriot business scene, video game developer Wargaming has a pretty good idea of what the main decisive factors are for a foreign company to move its headquarters to Cyprus.

The importance of having international companies move their headquarters to the island – often referred to as headquartering – has been highlighted by the successive governments but also the market itself. Cyprus’ ICT sector in particular is one of the fastest growing, with its contribution to GDP expected to be in the range of 13% in 2022.

Wargaming is one of the biggest ICT companies operating in Cyprus. The company has contributed hundreds of millions to the Cyprus economy from 2012 until present, either directly or indirectly. According to Valentinos Polykarpou, General Manager in Nicosia, this amount comprises taxes paid by the company and its employees, net salaries, and social security and VAT contributions. The amount also includes the cost of purchasing real estate and the facilities for the company’s activities, goods and services sourced from Cypriot suppliers, as well as Wargaming’s investment in Hellenic Bank.

“Wargaming today employs almost 450 people in Cyprus and is the company that has placed Cyprus on the map of the gaming companies, with many more companies establishing presence in Cyprus following Wargaming’s example,” said Polykarpou.

With all this in mind, coupled with the company’s effort to further deepen its presence in the country, Wargaming is the best example of how to attract companies from the gaming industry but also the broader ICT sector.

“The Republic already has policies in place aimed at further boosting Cyprus’ potential as a destination for foreign technology companies and their staff,” Polykarpou explained. “For example, the new strategy for attracting businesses and talents that came into effect on 1 January 2022 allows free access to the labour market for the spouses of foreign professionals employed in Cyprus’ technology sector. The tax exemption of 50% of the income of new residents-employees with earnings of €55,000 is also an additional motivation for the attraction of top ICT talent to the island.”

Meanwhile, a special agreement has been in place since the war broke out in Ukraine, allowing for the swifter transfer/relocation of tech companies’ staff to Cyprus. “It is worth noting that over 5,000 such workers have moved to our island so far under this agreement,” said Polykarpou.

Whilst fully acknowledging everything that has been done to date, the people of Wargaming say there is still room for more when it comes to attracting foreign talent and new companies to Cyprus.

“One suggestion would be to apply a more direct procedure for granting citizenship to individuals that meet specific criteria, such as completing 4-5 years of permanent residency in Cyprus, as well as allowing them to spend up to 90 days per year abroad without these days restricting their rights to apply for citizenship,” he suggested. “The abovementioned practices/incentives are already being offered by other EU member states, including Germany and Finland, which are also striving to attract tech companies.”

The industry experts also propose the introduction of a new type of visa for short-term business trips by employees of third countries to Cyprus (short-term residence, training, seminars, conferences, meetings).

“Cyprus also needs to work on its infrastructure, as industry professionals are struggling to find real estate at affordable prices, while the limited number of foreign-language schools for their children is also a huge obstacle,” Valentinos Polykarpou pointed out. “Towards this direction, the Government should introduce incentives to encourage expansion of existing schools so as to increase their capacity in accepting more students. Furthermore, bureaucracy should be fastened, as there is a delay in the issuance of permits for the development of new schools or for the expansion of existing ones,” he explained.

When it comes to accessing Cyprus, the lack of air connections is a serious issue. Visitors often have to make at least one stop before they reach the island, and so along with other potential delays, valuable time is lost that could have been utilised differently by the company and its employees.

“The general lack of local ICT talent is also a main consideration for ICT companies. To cover the shortage, academia needs to introduce more courses in its curricula and there is a need for more professional certifications,” said Polykarpou. In the meantime, existing staff can benefit vastly from reskilling and upskilling, he said. “Added to the previous, studies show that Cyprus has the second highest percentage of tertiary education graduates in the EU.” At the same time, however, it has a very low percentage of STEAM graduates. “Given the large number of vacancies within the ICT sector, there is an evident issue of skill mismatch, which can be tackled by the introduction of upskilling and reskilling programs,” Polykarpou explained.

A change to the tax framework could also provide further incentives to companies and employees. According to WG’s General Manager, “It is in the technology companies’ culture to share company profits with their employees, in the form of employee share option schemes. However, the current tax framework does not allow for tax efficient share option or share granting schemes”.

Finally, he said foreign professionals are desperately asking for state documents to be digitised and One-Stop Shops to be introduced for public services. It would also help if official documents and procedures were also available in the English language.