Iceland - Overview:
Vikings from the West of Norway first settled Iceland in the 9th century. During the following centuries Iceland was governed by Norway and then Denmark becoming a republic in 1944. The precursor of Iceland’s government the Althingi was founded around 930 A.D. Iceland became a member of NATO in 1949 and the USA still operates a military presence at Keflavik. Traditionally the economy of Iceland had a high dependence on fishing however thanks to recent investment heavy industry plays an increasingly important role along with the financial sector following deregulation and privatization. Reykjavik, the capitol, is rapidly gaining status as a tourist location as well as a target for new business and investment.

Economy
In the past the Icelandic economy was highly dependant on fish prices, however this vunerability is lessening due to the countries expansion into increasingly diverse sectors. Following a brief recession in late 2001 the Icelandic economy has seen steady growth. Exports play a significant role; apart from marine products, which constitute the largest sector, machinery and electronic equipment for the fishing industry, metals, software and wool based items, all contribute to the economy. Growth areas among imports to Iceland include electrical generating equipment, computers, software, aircraft, vehicles and furniture.

Much of Iceland’s exports go to the European Union, the European Free Trade Association, made up of Iceland, Liechtenstein, Norway and Switzerland. Also the USA and Japan are important trading partners. Although Iceland's increasing adoption of EU product standards and regulations is creating barriers to US imports. According to the IMD World Competitiveness Yearbook 2005, Iceland ranks fourth after the USA, Hong Kong and Singapore. In Europe it takes first place for competitiveness. One key factor to Iceland success is its abundant sustainable supply of energy. Over 99% of the country's electricity is produced from geothermal and hydroelectric sources. A by-product of this approach is the countries growing exports of exotic fruits, grown in specially constructed greenhouses.

The country’s service sector is currently undergoing a period of expansion with financial services and tourism growing steadily. Fuelled by an increasing international interest in eco-tourism, the Icelandic tourist trade has seen a welcome increase offering activities such as whale watching whilst Reykjavik continues to gain an international reputation as a trendy, cutting edge destination.

Infrastructure
The national air carrier, Icelandair flies from Keflavik to around 20 locations in North America and Europe daily. Flight times range between 2-4 hours to Europe and 5-8 hours to North America. Internal flights are usually no more than an hour. Internal flights can also be taken from Reykjavik airport to all main locations in Iceland.

The vast majority of cargo arrives by ship into three main ports based around Keflavik all of which are approximately a 40-minute drive from Reykjavik.

Workforce
The population of Iceland is around 290.000 of which half live in and close to Reykjavik. Most other centres of population are located in coastal areas as the mountainous interior is not well suited to habitation. Icelanders enjoy a high quality of education with most speaking English as a second language.

The Icelandic universities provide the skills needed for Iceland’s diverse economy, from traditional to high-tech allowing the country to fully take its place in today’s global economy. There are eight universities, four of which are in Reykjavik, covering a wide range of subjects. Figures from the Ministry for Foreign Affairs, as of 2003, show that the service sector accounted for 71.4% of employment, industry 21.7%, and agriculture (including fishing) 6.9%.

Standard of Living
A major factor that highlights the standard of living in Iceland is the longevity of Icelanders themselves, among the highest in the world (men 79 years and women 83). An excellent health-care service, a healthy diet and clean air combine to make it a comfortable location to live work and play. Reykjavik has around 170 restaurants, which benefit from the daily arrival of fresh Icelandic organically grown produce and fish caught in the morning for the evening dinner plate.

Throughout the year many festivals and events take place, some of which date back to the days of the Vikings. For those who enjoy nightlife, Reykjavik has a number of clubs, however due to the high cost of drinks most locals prefer to drink at home first before going to the clubs at around midnight. Also those with a liking for outdoor pursuits, the spectacular scenery both on land and sea, make activities such as hiking and sailing almost a special event in their own right.

Business Costs
According to a study by KPMG in 2002, Iceland has corporate income tax of only 18%, as well as some of the lowest operating costs amongst many major economies. The costs for incorporation in Iceland are for a new Public Limited Company ISK 160,000 (2,232 euros) and a new Private Limited Company ISK 85000 (1,185 euros) as of 2004.