Competitive Government 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. EU regulation does also allow general incentives for SMEs, R&D and environmental protection. 

The Regional Incentives, according to Act 41/2015, apply to the whole of Iceland outside the capital area. The incentives include the authorization to fix an income tax rate ceiling of only 15% for 10 years, depreciate real estate, equipment and moveable assets fully, reduce the rate of property tax and the general social security charge by 50%, grant exemption from customs and duties for construction materials, machinery and equipment, and other capital goods and the state and municipalities are allowed to lease a site for the project at reduced rates. 

Foreign experts, hired to work in Iceland, do enjoy personal tax incentives. A special tax deduction allows that only 75% of the income is considered taxable for the first three years of employment, fulfilling specified conditions.

Learn more about the incentives and support for direct investment, available in Iceland.


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