Exporting to Iceland
Updated 20 August 2014
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1. Overview
Iceland has the smallest population in the Nordic and Baltic region. However, it ranks as one of the top 15 countries in terms of per capita income in the Organisation for Economic Co-operation and Development (OECD) countries.
Iceland is a sophisticated and established market with a long and trusted trading relationship with the UK. It has an educated and technologically advanced society which looks for high quality products and services.
Iceland is 13th in the World Bank’s ‘Ease of Doing Business’ ranking.
Benefits for British businesses exporting to Iceland include:
- UK is the closest neighbouring country with good logistic connections
- English widely used as business language
- familiarity with British goods as UK is the preferred shopping place
- little manufacturing of consumer goods in Iceland
- compact market as high concentration of consumers in Reykjavik
Strengths of the Icelandic market include:
- high purchasing power
- quality minded consumers
2. Challenges
Doing business in Iceland is similar to the UK. If your goods and services are successful in the UK, there’s a good chance you’ll be successful in Iceland.
3. Growth potential
3.1 Economic growth
Iceland is moving out of recession following the economic crash in 2008. The economy grew by 3.3% in 2013 and is expected to grow by more than 3% in 2014. Improving domestic demand should support an average growth rate of around 3% up to 2017.
The improved outlook could positively impact Iceland’s credit rating within the next 2 years. Net general government debt is projected to fall to 61% of Gross Domestic Product (GDP) in 2017 from 71% in 2014.
3.2 Trade agreements
Iceland is a member of the European Economic Area (EEA) which limits trade barriers between Iceland and the European Union (EU). However, there are some limitations on imports of dairy and meat products, especially unpasteurised and fresh products.
Iceland is part of the European Free Trade Association (EFTA), and has also a free trade agreement with China.
4. Trade between UK and Iceland
The UK ranked eighth in imports to Iceland between 2010 and 2012.
The UK’s main exports to Iceland are:
- food and beverages
- industrial supplies
- fuels and lubricants
- capital goods
- transport equipment
- consumer goods
5. Opportunities for UK businesses in Iceland
Department for International Trade (DIT) publish over 1,000 business opportunities per month across all sectors and over 100 markets. Sign up to receive regular business opportunities alerts.
Access high value public procurement notices via Tenders Electronic Daily (TED). TED is the online version of the ‘Supplement to the Official Journal of the European Union’. TED contains all procurement notices above a certain threshold from member countries of the EU and EEA.
Learn more about business opportunities in the Nordic and Baltic regions.
5.1 Infrastructure and engineering
Major projects in Iceland include:
- £500 million airport high speed rail connection
- £5 billion energy transmission system – High Voltage Direct Current (HVDC) interconnection
- £4 billion power generation project
Opportunities for UK companies include:
- feasibility studies
- environmental assessment
- engineering consulting
- construction and machinery supplies
Contact petur.stefansson@mobile.trade.gov.uk for more information on opportunities in Iceland’s infrastructure and engineering sectors.
5.2 Construction
Major construction projects include:
- solar silicon factories with a total capacity greater than 60,000 metric tons
- multiple road tunnel construction projects planned
- £350 million university hospital
Opportunities for UK companies include:
- development and architecture
- environmental assessment
- engineering and construction
- mechanical supplies and healthcare products
Contact petur.stefansson@mobile.trade.gov.uk for more information on opportunities in Iceland’s construction sector.
5.3 Food and drink and consumer goods
Iceland can provide one of the biggest opportunities for UK companies in these sectors. There are opportunities across all parts of these sectors, including food production.
Contact eva.kristjansdottir@mobile.trade.gov.uk for more information on opportunities in Iceland’s food and drink and consumer goods sector.
5.4 Other opportunities
Iceland offers a wide variety of other business opportunities in:
- data centres
- energy dependent industries
- life sciences
Power intensive industrial production, mainly focusing on metals and solar silicon, has led the foreign investment field to date.
Contact petur.stefansson@mobile.trade.gov.uk for more information on other opportunities in Iceland.
6. Start-up considerations
UK exporters should get representation in Iceland through a distributor/wholesaler.
7. Legal considerations
UK companies entering into agreements in Iceland should undertake professional legal advice.
7.1 Standards and technical regulations
EU legislation applies to standards and regulations. English labelling is usually sufficient, although there are some exceptions.
The Consumer Agency has responsibility for safety and consumers rights.
7.2 Intellectual Property (IP)
The Icelandic Patent Office has responsibility for patents, trademarks and design protection.
8. Tax and customs considerations
Iceland and the UK have signed a double taxation agreement.
Iceland’s Directorate of Internal Revenue provides more information on tax.
8.1 Value Added Tax (VAT)
VAT in is charged at 25%.
8.2 Corporate tax
Corporate tax is set at 20%.
8.3 Income tax
Tax ranges between 37.3% and 46.24% depending on income.
8.4 Customs
There is generally free movement of goods within the EEA. However, the agreement applies primarily to industrial goods. Only certain farm products and specific species of fish are included.
Duties on goods not covered by the agreement are levied in the same way as on good outside the EEA. Contact the Directorate of Customs for more information.
You can find more about import tariffs in the Market Access Database.
8.5 Documentation
Import licences are not generally required for British industrial products, but licences are required for some other goods. Contact the Directorate of Customs for more information.
9. Entry requirements
UK citizens do not require a visa to enter Iceland, but must travel with a valid passport.
9.1 Travel advice
If you are travelling to Iceland for business, check the Foreign and Commonwealth Office (FCO) travel advice beforehand.
10. Contacts
Contact the DIT team in Iceland for more information and advice on opportunities for doing business in Iceland.