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In this page: FDI in Figures | Why You Should Choose to Invest in Iceland | Procedures Relative to Foreign Investment | Investment Opportunities


FDI in Figures

In a context where global foreign investment increased by 10.9% in 2013, in particular in Europe (+25.2%) and in Latin America (+17.5%), FDI flows to developing economies reached a new high of US$759 billion. However macroeconomic fragility and policy uncertainties are driving investors to caution.

Foreign direct investment in Iceland, which had been growing regularly during the pre 2008 years, fell that year essentially 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, since 2011, the country has managed to meet the commitments made to the IMF which has sent a positive message to foreign investors in 2012 and 2013. The total of FDI influx in 2013 has been just over USD 500 million.

Information on the 2013 FDI influx in this region can be accessed in the Global Investment Trade Monitor published in January 2014 by the United Nations Conference on Trade and Development (UNCTAD).


Country Comparison For the Protection of Investors

  Iceland OECD United States Germany
Index of Transaction Transparency* 7.0 6.0 7.0 5.0
Index of Manager’s Responsibility** 5.0 5.0 9.0 5.0
Index of Shareholders’ Power*** 7.0 9.0 5.0
Index of Investor Protection**** 6.0 6.1 8.3 5.0

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

Foreign Direct Investment 201120122013
FDI Inward Flow (million USD) 1,1081,025348
FDI Stock (million USD) 12,65610,36710,719
Performance Index*, Ranking on 181 Economies 105--
Potential Index**, Ranking on 177 Economies 74--
Number of Greenfield Investments*** 212
FDI Inwards (in % of GFCF****) 56.051.916.3
FDI Stock (in % of GDP) 90.176.373.1

Source: UNCTAD - Last Available Data.

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

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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.

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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.

Learn more about Foreign Investment in Iceland on, the Directory for International Trade Service Providers.

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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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Learn more about Investing in Iceland on, the Directory for International Trade Service Providers.

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Last Updates: February 2015