- With hundreds of countries all over the world, it can get difficult to select which country to incorporate. Setting up a company in Iceland has its own advantages and disadvantages when it comes to matters such as geographic location, taxes, culture, ease of doing business and more. In this article, we will discuss the 10 main benefits to register company in Iceland.
8 Main Benefits of Setting Up a Company in Iceland
1. Favourable business environment
- The reason Iceland is considered to have a favorable business environment is because of its strong legal framework that promotes transparency and protects its investors. This coupled with the ease of doing business in Iceland due to its streamlined registration processes and efficient administrative procedures make setting up a company in Iceland relatively easy.
- An example of the ease of company incorporation is that the Icelandic Companies Registration (RSK) handles the registration and all forms and documentation required to incorporate a company can be submitted online. This not only makes it more convenient for people to register a company but makes it accessible from all over the world.
- Additionally, examples of the impact of a strong legal framework are contract enforceability should any disputes arise, and the fact that Iceland has comprehensive laws and regulations on intellectual property, allowing businesses to file for trademarks, patents, and copyrights.
2. Strategic Location
- Iceland’s geographic location between Europe and North America acts as a strategic location because it allows access to both markets which could possibly benefit companies looking to expand internationally.
- It is due to Iceland’s strategic location that it has been able to enter various trade agreements. For example, since Iceland is a member of the European economic area, it has access to tariff-free trade with EU member states, providing businesses with a customer market of over 500 million customers. A unique competitive advantage that Iceland also has is its time zone advantage, Greenwich Mean Time (GMT) is one that aligns not only with Europe but North American business hours as well, making it an optimal location for international business.
3. Robust Infrastructure
- The robust infrastructure in Iceland can be seen through its advanced telecommunications systems, efficient modes of transportation, and developed energy and technology sectors. Iceland is home to several airports with Keflavik international airport being the primary international gateway. It is also well-equipped with ports and harbors that facilitate maritime transportation. As for its telecommunications infrastructure, it provides high-speed internet connectivity all over Iceland, allowing businesses to access digital platforms, online services, and global communication networks efficiently.
- Iceland’s technology infrastructure has improved over the years and has actually become an attractive location for companies that work with data centers. This is due to Iceland’s cool climate and abundant renewable energy that provides the data centers with an optimal environment and reliable source of energy to function efficiently.
4. Highly Educated Workforce
- The workforce in Iceland is well known for its high literacy rates and heavy emphasis on innovation, knowledge, and sustainability. The country possesses a high literacy rate with nearly all Icelanders being literate. In addition, english proficiency is widespread in Iceland with a large proportion of the population being able to communicate using english. As a result, this has facilitated communication with international clients and partners from all over the world.
- It is also common for Icelanders to be fluent in other languages such as Danish, Norwegian, Swedish, and German, contributing to Iceland’s ability to act as a breeding ground for international business collaborations. Iceland has placed heavy emphasis on developing more greener and sustainable practices. Therefore, they have started to implement the teaching of sustainability principles in their education curriculum so that students can prepare to contribute to a greener future. Companies whose business models revolve around sustainability will have no trouble finding a skilled workforce well-versed in sustainability terms and principles here in Iceland.
5. Renewable Resources
- Iceland is blessed with an abundance of renewable energy resources. These resources are primarily derived from hydroelectric and geothermal sources which contribute largely to the energy production in Iceland today.
- Geothermal plants and wells are located in Iceland that harness geothermal energy by drilling wells into the earth in order to access hot water and steam reservoirs. Subsequently, geothermal energy is used to generate electricity through geothermal power plants.
- Hydroelectric power is also generated in Iceland through numerous rivers and waterfalls. Dams are constructed to regulate the flow of water and the turbines convert the kinetic energy of flowing water into electricity.
- These forms of renewable energy allow Iceland to develop its own energy dependence and decrease dependency on imported fossil fuels, sheltering them from volatile international fuel prices. The impact of this is also a decrease in electricity costs in Iceland and provides a potential trade of energy export for the country.
6. Political Stability
- Iceland has possessed a long-standing culture of political stability that provides a stable environment for businesses to operate and thrive.
- Some key factors responsible for the political stability in Iceland are democratic governance, the political system, and low corruption levels. Iceland operates under a parliamentary system of government and ensures laws and regulations are applied consistently and fairly.
- Iceland’s political system involves a multi-party system with several political parties competing in elections promoting a healthy level of democracy and an environment whereby a range of voices and opinions can be represented in the decision-making process. Additionally, Iceland has traditionally had a peaceful transition of power when facing changes in government through democratic elections. With the strong anti-corruption measures in place, Iceland has managed to maintain a transparent and accountable government, allowing them to rank highly on the Corruption Perception Index(CPI).
7. Low Corporate Tax
- Iceland generally has a low tax environment with the current corporate tax rate set at 20%, this provides a favorable business environment for companies looking to increase their profitability. Iceland also implements double taxation agreements with numerous countries to ensure that businesses are not taxed twice for the same income, this aims to facilitate cross-border trade and investment as a result. Tax incentives in the form of tax credits and reduced rates are also offered to certain regions and industries in Iceland.
8. Quality of Life
- Iceland ranks one of the highest in the world when it comes to a high standard of living as a result of its strong social welfare system, accessibility to quality healthcare, and clean environment. The country is also known for low crime rates and high levels of personal safety. Quality of life should be a strong factor of consideration when incorporated in a country as business owners commonly reside in the place of their business operation.
- In conclusion, there are countless benefits of setting up a company in Iceland, from its location or natural resources to its regulations and quality of life. The process of incorporation can be a lengthy one and so our team here at Tetra Consultants aims to shorten and simplify this process for our clients.
- Contact us to know more about company registration in Iceland and our team will revert within 24 hours. With a range of services from offshore company incorporation, nominee director and shareholder services, International Trademark Registration, corporate bank account opening, and many more ancillary services. Tetra Consultants is well-equipped to help our clients achieve their business goals and objectives.