Menu

Second phase of economic response measures

Increased support for R&D, closure subsidies, immediate support loans for SMEs and allowance to carry 2020 losses back to offset 2019 income tax are among the measures introduced by the government as part of the second COVID-19 economic response package on April 21.

This is a follow up to the first stimulus package introduced earlier. The focus in this second phase is on small enterprises, innovation and vulnerable groups. The total value is up to 420m USD. 
Reimbursement for R&D in innovative companies is increased to 25% of the actual R&D cost and the ceiling is lifted by 50% up to 900m ISK.
Smaller businesses that have had to close due to public health concerns and social distancing rules can apply for closure subsidies, up to 800 thousand ISK per employee or up to a ceiling of 2.4m ISK.
Companies that have experienced severe decline in income can apply for support loans with low interest rates to help overcome cash flow problems.
Companies with foreseeable losses in 2020 can apply to carry that loss back to offset the income tax for 2019 up to a ceiling of 20m ISK. This is to increase this years cash flow.
For further information on this and other measures in the second response package see the governments information website.

Get in touch

For further information on the benefits of establishing a business in Iceland please feel free to contact us.

Incentives

Iceland focuses on a favorable business environment, including low corporate tax, availability of land and green energy at competitive prices and efficiency within European legislative framework. New direct investment projects can apply for an investment agreement, ensuring generous regional incentives, including a corporate tax rate ceiling of only 15%.

Why Iceland

Along with having one of the lowest corporate tax rate in Europe, Iceland has a highly educated workforce which is ranked among the highest in the world, offers competitively priced renewable energy with an advanced infrastructure making Iceland an ideal location for investors