Iceland: Investing

FDI in Figures

Foreign direct investment in Iceland, which had been growing during the last few years, fell in 2008, esentially due to Iceland's over-exposure in the international markets combined  to the general bankruptcy of the country's banking system.

The FDI was mainly directed towards retail sales, biotechnology, geothermal science, information and communication technologies and health technologies. Franchising is in full-growth in Iceland, especially in the retail sector.

Iceland's main advantages to a company in terms of investment are: an English-speaking manpower, a positive economic environment and a high purchasing power. The main drawbacks of investing in Iceland are: high cost of living, a weak demography, a bankrupt financial system, and its long distance from the European continent.

Due to the deep financial crisis that Iceland has gone through, FDI has strongly decreased. However, in 2011 the country has managed to meet the committments made to the IMF, which should send a positive message to foreign investors in 2012.

Why You Should Choose to Invest in Iceland

Strong Points

The country's main strong points are:
- A strong export industry;
- A flexible job market;
- A young qualified workforce;
- modern and efficient infrastructures.

Weak Points

The country's main weak points are:
- The limited size of the domestic market;
- The country's vulnerability in the face of the financial crisis;
- High production costs.

Government Measures to Motivate or Restrict FDI

Iceland has set up a very favorable company taxation system (only 15% corporate tax) and also simplified all company formation procedures (only one day). The establishment of free-trade zones and competitive clusters is another measure in favor of investments.
For further information, visit the Invest Iceland website.

Procedures Relative to Foreign Investment

Freedom of Establishment

The country is very open to investment, however there are some restrictions in the energy, fishing and air transport sectors.

Acquisition of Holdings

A majority holding interest in the capital of a local company is legal in Iceland.

Obligation to Declare

The agency for the promotion of foreign investment in the country gives information about the authorizations required for setting up business.

Competent Organization For the Declaration

Ministry of Finance
Ministry of Industry

Requests For Specific Authorizations

As a general rule, there are no specific authorizations for investing in Iceland.
For further information, visit Invest Iceland.

Investment Opportunities

Investment Aid Agency

Invest in Iceland Agency

Tenders, Projects and Public Procurement

Tenders Info, Tenders in Iceland
DgMarket, Tenders Worldwide

Other Useful Resources

Icelandic Chamber of Commerce

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