Guidance

Exporting to Iceland

Updated 20 August 2014

This guidance was withdrawn on

Department for International Trade withdrew this publication because it was out of date.

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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.

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.