Why are more and more game companies settling in Cyprus?
If you are in the gaming industry, especially considering setting up overseas companies, building international teams, or opening up payment channels in the European and American markets, you may have noticed a name appearing frequently—Cyprus.
This Mediterranean island nation, known for its beaches and resorts, has rapidly become a hot destination for game companies to establish themselves. So, what exactly attracts so many developers and entrepreneurs to move here?
Last month, I personally went to Cyprus to attend the two-day Gamesforum Cyprus. There, I had in-depth exchanges with local and international gaming professionals, truly feeling the vibrant entrepreneurial ecosystem forming on this small island.
Here are the three main reasons I've identified:
1. Geopolitical shift of choice: Eastern European developers "fleeing" to Cyprus
Since the outbreak of the Russia-Ukraine war, many game companies originally based in Russia, Belarus, and Ukraine were forced to "flee." Facing payment blockades, advertising account restrictions, and international settlement obstacles, more and more developers are turning their eyes to Cyprus.
As a member of the EU, Cyprus has a relatively sound financial system, stable policy environment, and a language-friendly office atmosphere. Local banks support SWIFT international transfers, and advertising platforms (such as Meta, Google) can also be used normally. Some teams have even set up physical offices in southern cities of Cyprus, restarting operations aimed at the European and American markets.
At Gamesforum, I met many developers who speak Russian, Ukrainian, and Polish. A practitioner based in Poland even said, "Coming to Cyprus is not just for business needs, but also because the sunshine here is more splendid than in Northern Europe."
2. Highly attractive tax system: Intellectual property income taxed at a minimum of 2.5%
The tax advantage is a common reason mentioned by almost all companies settling in Cyprus.
The standard corporate income tax rate here is 12.5%, which is relatively low in Europe. However, what attracts game companies more is the "IP Box" mechanism: for income from intellectual property, such as game advertising, in-app purchases, asset sales, copyright licensing, etc., the tax rate can be reduced to as low as 2.5%. Of course, companies must meet eligibility criteria and can handle this through accountants or registered agents.
In addition, Cyprus has no capital gains tax on dividends for overseas shareholders, further reducing the overall tax burden.
This has led many well-known companies such as WarGaming, Easybrain to relocate their headquarters here, and BelkaGames, SayGames, Tapclap, etc., have also set up financial and operational entities in Cyprus. For game companies that rely on advertising and virtual goods income, Cyprus is undoubtedly an ideal spot for "compliant tax reduction."
3. Small yet tight-knit gaming startup ecosystem: Community-driven "island circle"
You might think that a small country with a population of less than a million could hardly support the ecosystem needed for the gaming industry. However, Cyprus has an unexpectedly high industry concentration.
Developers, advertising agents, payment services, data analysis tools, customer service solutions, etc., can basically form a closed loop on the island. The "social density" within the industry is also very high—as some practitioners jokingly say: "We may not see each other during the week, but on weekends, when camping, surfing, or drinking, you might sit next to a colleague."
Moreover, there is an active industry organization, GDCy (Cyprus Game Development Community), founded by a local developer, Tim. GDCy regularly organizes developer gatherings, small lectures, and two major industry events each year. One of the most distinctive features is the GDCy annual conference held on an "open-air beach" stage—this year's first half will be held on May 31 at Limassol Beach, where developers, investors, and tool providers will gather to socialize, listen to music, and watch the sunset.
Compared to the complex commercial systems of traditional big cities, Cyprus, with its flexible and efficient structure and close social interactions, becomes a "high-density exchange + light operation" entrepreneurial hot island.
Which cities are suitable for settling? Location recommendations and city profiles
Since 1974, Cyprus has been divided into northern and southern parts. The northern part is the "Turkish Republic of Northern Cyprus," recognized only by Turkey, and does not have international business compliance. The southern part is the internationally recognized "Republic of Cyprus," therefore, game companies can only conduct compliant business in southern cities.
Common landing cities include three:
🏖 Paphos—Quiet and livable, cost-friendly
Suitable for: digital nomads, creative small teams
Advantages: Low living costs, beautiful scenery, pleasant climate
Limitations: Weak local business support and professional services, fewer industry resources
🌆 Limassol—Commercial highland, industry center
Suitable for: operation teams, business expansion, exhibition participants
Advantages: Rich industry resources, high degree of internationalization, dense entrepreneurship
Limitations: High housing prices, dense population, traffic congestion
🏛 Nicosia—Political center, administrative convenience
Suitable for: entity registration, tax planning, legal compliance needs
Advantages: Concentration of government agencies, good talent resources, convenient procedures
Limitations: Not by the sea, lacking a leisurely living atmosphere
What is it like to live here?
This trip to Cyprus, for me, was not only a research-oriented business trip but also a live experiment of "where you can work, where is worth living."
Sunshine, juice, slow pace, retro cafes, daily interweaving of various cultures... It's hard to simply categorize it as a "tax haven" or "entrepreneurial base." Its relaxation and vitality, ancient and modern, romantic and pragmatic intertwine into a unique temperament.
This is perhaps the real reason why more and more game companies are willing to settle here: not just to save money or set up a point, but to find a place where you can both work and live.
