Business Opportunities in Iceland

Iceland is a stable democracy with an active consumer economy. The pillars of the Icelandic economy are aluminum smelting, fishing and tourism. Its main material exports are aluminum and ferrosilicon, fish and fish products, and pharmaceuticals. Renewable natural resources are ample and include rich fishing grounds and clean power sources. The services sector includes computer software and biotechnology companies. The majority of imports to Iceland come from the European Economic Area (EEA), 61% in 2012, mainly from the Scandinavian countries, Germany, the Netherlands and the UK. The U. S.? share of imports was 10.2% in 2012. China accounted for 7.15% of imports, Brazil for 6.6% and Japan for 1.5%. Most of Iceland?s exports go to the EEA, 78.3% in 2012. Of those, 29.96% went to the Netherlands; 12.87 went to Germany, 9.8% went to the U. K; 3.48% went to Spain and 4.44% went to the United States. With a population of 321,857, the market is small. Icelanders, however, are generally well-educated, with sophisticated tastes and accepting of American consumer goods. Almost all Icelanders speak English, and there is no language barrier for Americans doing business in Iceland. Iceland is one of the most advanced countries in the world in the use of information and telecom technology. After suffering an economic collapse in 2008, the state took over the three largest commercial banks. Iceland completed an International Monetary Fund program in August 2011 and has seen economic growth restored. As of May 2013, a new coalition government has formed. Unemployment was 4.30 in May 2013. Since late November 2008, the Central Bank of Iceland has implemented temporary rules restricting capital outflow as a measure to support the Icelandic currency, which depreciated 51 percent against the dollar in 2008. As of February 2012, capital controls remain in effect for all but new investments, though it is anticipated that the Central Bank will continue to gradually lift the restrictions. Transactions involving imports and exports of goods and services, travel, interest payments, contractual installment payments and salaries are still permitted. The Central Bank published its Capital Controls Liberalization Strategy in August 2009, stating that the controls will be lifted in stages. Three steps have been implemented thus far. The outflow of foreign currency for new investments registered with the Central Bank is now allowed, and the Central Bank has begun the process of buying back offshore kronur.