Landsvirkjun

Iceland is one of the best countries in the world for doing business, ranked no. 12 out of 189 countries on the World Bank’s Ease of Doing Business Index for 2014. Iceland’s greatest strengths are in getting an electricity connection and enforcing contracts.

Iceland is a part of the European Economic Area (EEA) along with the EU member states, Norway, and Lichtenstein. The EEA membership guarantees the free movement of goods, people, services and capital within the area. As a condition of EEA membership, a significant part of EU legislation is implemented in Iceland.

Companies with international operations are headquartered in Iceland, including Össur - a pioneering company in the field of orthopedics, Marel – a publicly traded company in the field of industrial machinery, deCODE Genetics (a subsidiary of Amgen) and Alvogen – an international pharmaceutical company with presence in 35 countries.

Icelanders are generally technologically savvy and a number of interesting technology companies are based in Iceland, including QuizUp, Meniga and CCP.

Young and Educated Workforce

Young and educated workforce

Iceland has a well-educated and innovation-driven workforce. Information and communication technology (ICT) and engineering are the most popular subjects in Icelandic universities, which are open to direct cooperation with the data center industry.

IMD’s World Competitiveness Yearbook 2014 ranks Iceland’s information technology skills 2nd in the world.

Iceland ranks highly in the 2015 Human Capital Index. The World Economic Forum’s Human Capital Index measures the education and capacity of people, measuring skilled labor, employee training, secondary education, public expenditure on education, qualified engineers and various other factors indicative of intellectual capacity.

Taxes

Value-added tax

Exemptions are in place for value-added tax (VAT).

VAT is refundable for data center server equipment.

Electronically supplied services are exempt from VAT, provided the buyer is neither domiciled nor has a permanent establishment in Iceland.

Real-estate tax

The maximum real-estate tax municipalities can charge for industrial buildings is 1.65% of the registered property value. Specialized equipment is usually not included in the property valuation.

Corporate taxes

Limited liability companies pay 20% income tax but it is possible to get a fixed ceiling rate on income tax as a part of an incentive package for greenfield investment projects.

Branches of foreign companies that are incorporated in Iceland are taxed on income derived from their activities in Iceland. Tax is calculated at the regular income tax rate for a limited liability company.

Personal income tax

Personal income tax is paid monthly and the progressive tax structure has three steps, separated at 22.86% and 31.80%.

Capital tax is subject to 10% tax for capital income exceeding 125,000 ISK.

Investment Incentives

Investment incentives

Icelandic authorities, both at the national and municipal level, have in recent years provided incentives to foreign investors investing in greenfield projects. Past incentives on the national level have included a ceiling on income tax, increased depreciation allowances, 50% discount on social security charge, training grants and more.

Incentives may also be available on the municipal level and can for example include discounts on real-estate taxes and road connection fees.

For more information on investment incentives visit Invest in Iceland.

Getting Started

Getting started

It is easy to establish a business in Iceland. The most common business structure is the limited liability company. The main steps in establishing a business in Iceland are to apply for an Icelandic identity number, gather the necessary documents and register the business. A completed application to establish a company is generally processed in one day.

For more information visit Invest in Iceland.

White Papers and Reports

White Paper on Power Security

A detailed look at Iceland as a choice for industries and companies interested in the benefits of power security.

White Paper on HPC in Iceland

Nordic HPC – How four universities work together to maximize computing power by offshoring to Iceland.

Broadgroup Report

Report by Broadgroup on Iceland as an international data center hub.

Contacts

Haraldur Hallgrimsson

BUSINESS DEVELOPMENT MANAGER

For enquiries in all other countries
Phone: +354 660 0875
datacenter@lv.is

Vala Valthorsdottir

BUSINESS DEVELOPMENT MANAGER

For enquiries in all other countries
Phone: +354 778 4045
datacenter@lv.is

PWC report

A report by PWC on the important factors needed in order to evaluate Iceland as a location for your business. The report includes general information on the country in addition to details on the economic system, housing, tax and labour.

Request report

The report from PWC on Iceland as a location for your business

Register to download PWC report