Key Business Opportunities in Iceland

Iceland has made a name for itself as a country full of natural beauty, friendly people and incredible artists. What you may not necessarily know is that it’s also a country with fantastic business opportunities just waiting to be exploited.

In the last millennium, Iceland has gone from a nation that constantly struggled with famine and natural disasters to a prosperous country with well-off people who not only live comfortably next to volcanoes, but also harness their energy for cheap electricity.

Iceland is a country of highly educated, innovative thinkers. The Icelandic economy is like a first-class fruit tree, producing incredible yields for anyone who metaphorically wants to offer it some water and sunshine.

It’s an exciting time to be doing business in Iceland, but what are the key sectors? How easy is it to invest? Why should you invest in Iceland?

Read on to find out all this and more.

What are the most important business sectors in Iceland ?

As in most industrialized countries, Iceland has a variety of industries. However, there are three major industries that have grown the most in recent years in terms of infrastructure, competition and growth: Tourism, fishing and biotechnology.

Tourism

Hardly anyone could have imagined it 50 years ago, but the tourism industry is one of the most profitable sectors of the Icelandic economy.

In the early 2000s, Iceland became a popular destination for travelers of all kinds thanks to low-cost airlines. Iceland offers a range of unique experiences and natural beauty that cannot be found anywhere else in the world, simply because nowhere else in the world is quite like Iceland.

With the rise of social media, more and more people discovered this tiny island nation in the North Atlantic via their news feeds. Over time, tourism became as profitable for Icelanders as the seas.

Icelandic Fishing

Iceland may be one of the best places to snap an Instagram photo that everyone is envious of, but the sea is at the heart of the country. Due to the harsh natural conditions, early settlers discovered that it was difficult to grow crops on Icelandic soil. This meant that they were heavily dependent on the sea.

Since the early settlement, Icelanders have spent over 1000 years perfecting their fishing practices. Today they have an incredibly well maintained and regulated fishing industry.

Icelandic fisheries are not only realizing their potential in fishing methods, but are also leading the way in seafood processing. Companies like Marel use advanced robotics to sort products, and Valka uses high-speed water jets to cut fish products and remove waste.

Biotechnology in Iceland

The Icelandic population has long been relatively small and isolated. Most Icelanders can trace their family history back to the first settlers of the last 20 years, which has led to geneticists tapping into elements of the human genome.

Research on the Icelandic population has made some exciting discoveries about inherited genetic traits. This has made the country a pioneer in medical innovation.

Today, there is a thriving biotechnology industry in Iceland and its growth is not set to slow down any time soon. The country is a leader in genetic research such as Decode and in the pharmaceutical industry, prosthetics, research and development and e-health, all of which are making incredible progress in Iceland.

Iceland’s thriving startup environment

Icelanders have always had to be innovative. In the past, this was often a matter of survival. Today, however, the cultural tendency to innovate and think outside the box stems more from an innate need for Icelanders to simply be better, be happier and play a bigger role on the world stage.

Icelanders tend to be what you would call "early adopters" They are not afraid to take risks and are generally not opposed to change if it could mean a better outcome for a business or investment. Put all of this together and it’s easy to see why Iceland has a thriving startup industry.

Icelandic startups usually have an extra advantage over their foreign competitors because they are generally forced to think globally from day one. Long before covid, Icelandic startups were already benefiting from external employees, taking advantage of the booming gig economy and successfully attracting foreign investors.

How easy is it for foreign investors to invest in Iceland?

It is very easy for foreigners to invest in Iceland. Not only are they welcome; Icelandic companies are always looking for opportunities to work with people outside the land of fire and ice.

Icelandic companies are often looking for foreign investors who can give them access to an international market or provide valuable insight into an industry.

Who are Iceland’s most important trading partners?

Although Iceland was hit hard by the global financial crisis in 2008, the image of the country today should be one of a stable economy with very healthy international relations.

Due to its geographical location, Iceland is automatically able to benefit from trade with mainland Europe, the United States and the United Kingdom.

Around 53% of Iceland’s total trade is with the EU. The second largest trading partner is the United Kingdom, followed by the United States, Norway and China.

More than half of all Icelandic exports go to the EU (60%). These are mainly metals and metal products such as aluminum, livestock and animal products.

The most important opportunities for foreign investment in Iceland

Foreign investment in Iceland is essentially the same as in any other industrialized country. If you are interested, you can use the traditional method of investing in an existing company, but you can also consider some other options.

Invest Directly in Icelandic Companies

As stated above, this can be as simple as bringing some capital to an already established business, but there are also opportunities to get in on the ground floor. 

Leaders in the Icelandic economy have noted the success rate of Icelandic startups. As a result, an entire industry has developed around connecting them with potential investors. 

There are initiatives like Startup Iceland and Start-Up Reykjavik that were created to mentor startups and eventually connect them with investors.

There are also companies like Crowberry Capital, whose business model is to connect investors with startups at the seed or early stage.  

Open a Subsidiary of Your Business in Iceland 

If you already have an established business and would like to invest in Iceland, another option could be to open a branch of your company in a limited capacity in Iceland. 

You can also open an independent company, also known as a subsidiary in Iceland. It’s entirely feasible as long as the operations of your business fall within the company law provisions of the EU/EEA. 

You can find out more about how to open a subsidiary of your business here. 

Invest in NASDAQ Iceland

This is possibly the most ‘old school’ method of investing in Iceland, and it can be just as profitable as all the others. 

The Icelandic stock market operates as the NASDAQ, or more specifically the NASDAQ – OMX. 

It operates over 28 global markets and works closely with other nordic markets. It shares the same infrastructure as the NASDAQ in Helsinki (Finland), Stockholm (Sweden) and Copenhagen (Denmark).

To invest in the NASDAQ – OMX it’s a simple process of engaging the services of a broker and buying shares in a publicly listed Icelandic company. The complete list of Icelandic companies on the stock exchange can be found here. 

Why Should You Invest in Iceland? 

The history of the Icelandic economy over the last 100 years is enough to make anyone realize that this country is a horse you might want to put some money on.

At the beginning of the 20th century, Iceland was one of the poorest countries in Europe. After the Second World War, the country’s economic situation began to gain momentum. Today, Iceland is one of the highest-income countries in the world.

Progress in Iceland will continue, and frankly, you'd be a fool not to jump on this train before it becomes a bullet train.

How Swapp Agency Can Help You 

If you’re looking to invest in Iceland or take advantage of the business opportunities available here and understand Icelandic business culture, Swapp Agency should be your first port of call. 

Swapp Agency was founded to connect some of the incredible talent available in Iceland with businesses who wish to capitalize on their skills. We can assist in connecting you with contractors, employees, oversee entire portions of a project, and so much more to ease the burden on your exciting ventures.

Iceland is currently experiencing a boom in its gig economy, and the Swapp Agency is at the forefront of access to some of the most skilled gig workers available.

You can also contact Swapp Agency for more information or to learn about how they can connect you with Icelandic businesses for your project or venture.

We have a great ear to the ground on the Icelandic economy and can also assist everything from permits and visas to acting as an Employer of Record.

Conclusion

When it comes to the economy, numbers speak. Iceland has repeatedly produced these figures over the last century. The exponential success rate in its primary industries shows that Iceland is not only a country to watch, but also a country to engage with.

Icelanders have shown the history books that they are not people who retreat quietly. Instead, they choose to innovate, create, learn and educate themselves to establish themselves as the overwhelming underdogs of the industry.