Doing business in Iceland
Iceland is a small island nation located in the North Atlantic that is known for its stunning natural beauty, vibrant culture, and unique business environment. Doing business in Iceland offers a number of advantages, including a highly educated and innovative workforce, strong infrastructure, and a supportive business environment.
One of the key benefits of doing business in Iceland is the country's highly educated and innovative workforce. Iceland has one of the highest rates of tertiary education in the world, and the country places a strong emphasis on science, technology, engineering, and math (STEM) fields. This means that companies have access to a talent pool that is well-equipped to handle the demands of modern business.
Another advantage of doing business in Iceland is the country's strong infrastructure. Iceland has a well-developed transportation network, including modern airports, ports, and highways. The country also has a reliable and affordable energy supply, which is sourced almost entirely from renewable energy sources such as geothermal and hydroelectric power.
Iceland also has a supportive business environment that is designed to encourage entrepreneurship and innovation. The country has a transparent legal system, and the government provides various forms of financial assistance and tax incentives to companies that invest in research and development.
In terms of culture, Iceland is known for its progressive and egalitarian approach to business. The country values creativity, innovation, and diversity, which has created a dynamic and collaborative business culture. Icelandic companies are often characterized by flat hierarchies, open communication, and a focus on sustainability.
Overall, doing business in Iceland offers a unique combination of economic stability, innovation, and sustainability. With its highly educated workforce, strong infrastructure, and supportive business environment, Iceland is an attractive destination for companies looking to expand into the European market.
Advantages of Doing Business in Iceland
✔ Highly educated and innovative workforce: Iceland has one of the highest rates of tertiary education in the world, with a strong focus on STEM fields. This means that companies have access to a talent pool that is well-equipped to handle the demands of modern business.
✔ Strong infrastructure: Iceland has a well-developed transportation network, modern airports, ports, and highways. The country also has a reliable and affordable energy supply, which is sourced almost entirely from renewable energy sources such as geothermal and hydroelectric power.
✔ Supportive business environment: Iceland has a supportive business environment that is designed to encourage entrepreneurship and innovation. The government provides various forms of financial assistance and tax incentives to companies that invest in research and development.
✔ Progressive and egalitarian culture: Iceland values creativity, innovation, and diversity, which has created a dynamic and collaborative business culture. Companies in Iceland are often characterized by flat hierarchies, open communication, and a focus on sustainability.
✔ Access to the European market: Although not a member of the European Union, Iceland is a member of the European Economic Area, which provides companies with access to a large and diverse market. The country also has a strategic location on the North Atlantic, which makes it an ideal gateway to markets in North America and Europe.
Disadvantages of Doing Business in Iceland
✖ High cost of living: Iceland has a relatively high cost of living, which can be a barrier to entry for some companies. The cost of labor, real estate, and taxes are generally higher than in many other countries, which can impact profit margins.
✖ Limited market size: Iceland is a relatively small country, with a population of just over 350,000 people. This means that the domestic market may not be large enough to support certain types of businesses, and companies may need to look to export markets to achieve growth.
✖ Limited workforce: While Iceland has a highly educated workforce, the country's population is relatively small, which can make it difficult for companies to find skilled workers in certain fields.
✖ Cold climate: Iceland has a cold climate, particularly in the winter months, which can impact some types of businesses that rely on outdoor activities or transportation.
✖ Remote location: Iceland is a remote island nation located in the North Atlantic, which can make it more difficult and expensive for companies to transport goods and conduct business with partners in other parts of the world.
There are several types of business organizations in Iceland, each with its own advantages and disadvantages. Some of the most common types of business organizations in Iceland include:
► Sole proprietorship: A sole proprietorship is the simplest form of business organization in Iceland, where an individual is the sole owner of the business and is responsible for its operations and liabilities.
► General partnership: A general partnership is a business organization where two or more individuals share ownership of the business and its profits and losses. Partnerships can be either registered or unregistered.
► Limited partnership: A limited partnership is a business organization where there are both general partners and limited partners. General partners are responsible for the management of the business, while limited partners have limited liability and do not participate in the management of the business.
► Limited liability company (Ehf.): A limited liability company is a separate legal entity from its owners, with limited liability for its shareholders. An Ehf. can be owned by one or more individuals or entities and is required to have a minimum share capital of ISK 500,000.
► Public limited company (Hf.): A public limited company is a separate legal entity with limited liability for its shareholders. An Hf. can be listed on the stock exchange and is required to have a minimum share capital of ISK 4,000,000.
► Cooperative: A cooperative is a business organization that is owned and democratically controlled by its members, who share in the profits and benefits of the business. Cooperatives can be either consumer, worker, or producer-owned.
► Branch office: A branch office is a subsidiary of a foreign company that operates in Iceland. The parent company is responsible for the operations and liabilities of the branch office.
► Representative office: A representative office is a non-profit entity that represents a foreign company in Iceland, but does not engage in commercial activities or generate revenue.