Iceland has had its ups and downs on the financial market, but in comparison with innovation-driven economies, Iceland usually ranks well above average in technological readiness and scores high in innovation, labour market efficiency and infrastructure.

Large industries can purchase energy at dollar rates, to avoid currency fluctuations, but local labour receives salaries in the local Icelandic krona currency (ISK). Interest rates are high at the local banks, and large projects are usually financed by foreign banks at lower interests.

The local market size is very small (30 thousand inhabitants in Northeast Iceland) and large projects always assume production sales on the global market. Income tax is 20%.

Historically, government incentives have paved the way for the larger projects established in Iceland. The rules of the game are described here.

Two Business Development Agencies exist in the area, called AFE and Atthing.

 

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