Invest in Iceland: Best of Both Worlds

Written by Thordur H. Hilmarsson. Posted in FDI

Discover the stepping stone between the old and new worlds. Iceland, strategically located between Europe and North America, is renowned for pristine nature but also offers a highly advanced infrastructure. While steeped in history and distinct local culture, Iceland brings together the latest in science, technology and cultural trends from both sides of the Atlantic. This safe society is closely knit and family friendly, but the young and educated population is open-minded and global in outlook.

Iceland’s location in the mid-Atlantic explains the abundance of energy from renewable geothermal and hydropower resources. The competitively priced green energy has attracted energy-intensive industries and, increasingly, technology and life sciences firms find that Iceland is a natural fit for their business. A strong R&D tradition, a sound business environment with low corporate tax, and incentives for both foreign direct investment and R&D projects all form part of Iceland’s value proposition for foreign investors.


"Icelandic expertise in sustainable uses of geothermal resources has become a valuable export service."


Icelanders are looking to knowledge-based industries, diversification and the green economy as the way forward. Attracting FDI is important for Iceland, and the government is dedicated to increasing investment and ensuring Iceland’s competitiveness.

Tax incentives for foreign specialists:
In addition to the attractive incentives program for businesses, e.g. an income tax rate ceiling of just 15% for a period of 10 years, Iceland has recently adopted tax incentives for foreign specialists. A special tax deduction stipulates that only 75% of income is considered taxable for the first three years of employment. As a member of the EEA Iceland is a part of the inner European market with tariff free access to the European Union and the freedom to live and work in any of the member countries.

Knowledge-based growth sectors:
Data Centers, life sciences, chemicals and tourism are now attracting foreign investment to Iceland. International universities, a university hospital and a strong health care system have encouraged development in all aspects of life sciences, from marine-based life sciences to IT for diagnosis and treatment in healthcare. Multinational pharmaceuticals company Alvotech recently opened a new research center on the campus of the University of Iceland, where the development and production of generic pharmaceuticals is the main focus.

Iceland´s claim to be a cool location does not only refer to the booming tourism industry, vibrant cultural scene and world-renowned creative industries. In the case of data centres, cool is meant literally, as the temperate climate means year-round, natural, free cooling, which reduces electricity consumption. Add to this an abundance of green energy, an educated and IT-minded workforce and multiple submarine fiber optic cables connecting Iceland to Europe and North Americas and you have an ideal, cost-competitive location for data centers.

After harnessing Iceland’s geothermal resources to generate electricity, eliminate fossil fuel from space heating and various wellness purposes, such as outdoor spas and swimming pools, the focus is now on other value streams. The combination of multiple value streams from geothermal powerplants provide the opportunity to create unique sustainable inputs to diverse processes such as microalgae cultivation utilising electricity, thermal energy and CO2, waste-to-value food processing based on geothermal heat, liquid fuel production using electricity and CO2, algae-based cosmetic production, controlled and pesticide free greenhouse production and aquaculture.

Icelandic expertise in sustainable uses of geothermal resources has become a valuable export service. With decades of experience in designing and building power plants and production facilities, based on geothermal energy, Iceland boasts world-leading experts. The Geothermal Training Program of the United Nations University is in Iceland.

Geothermal resources are also part of Iceland’s attraction for foreign guests. For a growing number of people, Iceland signifies an exotic experience of unspoilt nature, purity and adventure. This adventure is highly accessible, only 5-8 hours direct flight from most major airports in North America and 2.5-5 hours from Europe. The year-on-year growth rate in visitor numbers has been over 20% since 2010.

In recent years, visitors from North America have become the largest group given that there are direct flights to Iceland and a stop-over possibility in Iceland at no extra cost when travelling between Europe and North America. Occupancy rates have been improving. They were over 70% in March this year and over 90% in the Capital Region.

Iceland welcomes you to enjoy and explore the multiple opportunities.

For more information: www.invest.is

 

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