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Doing Business in Iceland

Expats working in Iceland have chosen a country which, despite its economic struggles, has one of the highest living standards in the world. The InterNations guide to Iceland offers information on the economy, the job search, taxation, and other aspects of working in Iceland.
Doing business in Iceland is a rather straightforward endeavor.

Visa Requirements for Iceland

Expats who are not citizens of EU/EEA countries have to apply for a work and residence permit in order to work in Iceland. The best bet for most expats is to apply for a permit based on professional qualifications. For this permit, you need to have specialized skills and an employment contract for a position which is not short-term. Once this permit has been approved, you can apply for a D-visa if necessary.

If you’re only looking for a short-term assignment, the shortage of laborers permit is best. Before you can apply for this permit, you need to make sure that the profession you are interested in currently has a shortage of laborers. If so, this permit allows you to live in Iceland temporarily. For more information on visa requirements in Iceland, please have a look at our article on Moving to Iceland.

Taxation in Iceland

Expats working in Iceland are required to pay the same taxes as locals. Taxes are automatically deducted from your salary. As of 2017, Iceland’s income and municipal tax is calculated on the following levels:

  • 36.94% for income between ISK 0–834,707 a month
  • 46.24 % for income exceeding ISK 834,708 a month

Anyone who is older than 16 can apply for a tax card which grants taxpayers a personal tax allowance. You’ll need to make sure you give your tax card to your employer before you receive your first pay check. As a foreign citizen, you may benefit from a double taxation agreement between Iceland and your home country. To receive these tax benefits, you need to be subject to full tax liability in your home country. Please refer to RSK Ríkisskattstjóri for more information on taxation in Iceland.

Business Etiquette in Iceland

The good news is that English is widely spoken in business. It is important that you begin and end meetings with a firm handshake. Hierarchies are rather flat in Iceland and you should make sure that you treat all your business partners equally, regardless of their professional status. Precision and honesty are important and appreciated, and Icelanders tend to get straight to the point during negotiations.

As a matter of general courtesy, it is important that you arrive on time or maybe even a few minutes early to business meetings. If you realize that you will be late, you should call to let your business partners know. During a presentation, it is important to use relevant, supporting data and information which is to the point. Your Icelandic business partners expect the information they receive from you to be correct and honest, so avoid sugarcoating anything.

 

We do our best to keep this article up to date. However, we cannot guarantee that the information provided is always current or complete. 

Fjodor Andersen

"Finding other expats interested in playing squash in Reykjavik seemed difficult. But with InterNations I found them easily."

Michelle Guillemont

"Iceland is not the expat country number one. But I met truly global minds with InterNations. It really works."

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