Why Iceland | ON Power

Why Choose Iceland?

Green image and zero carbon footprint
One of the world’s most reliable power infrastructures
High level of education and flexible labour market
Cool climate location between the USA and Europe
Access to markets in the USA and Europe
Free trade agreement between Iceland and China
Favourable business environment with official support
Low taxes and legislative framework
Economic gain through cost efficiencies
European and Scandinavian regulatory framework
Political and social stability and low crime rates

Full government support

Icelandic authorities are committed to offering a favourable business environment. This includes a low 20% corporate tax and a new effective incentive regime aimed at foreign investment, especially in the high tech industry.

As a member of the European Economic Area, Iceland is part of the European internal market with European legislation, including a comprehensive data protection act, and tariff free access to the European Union.

Establishing a data center in Reykjavik is in perfect alignment with The City’s green industrial policies. Accordingly, the City offers any appropriate assistance to further such project. - Dagur B. Eggertsson, Mayor of Reykjavík.

Low Tax Rates

Income tax

Tax rates for limited liability companies and partnership companies are 20% for the income year 2015. For limited partnerships and other corporations the tax rate is 36%. - PWC - Establishing Business in Iceland

Capital gains tax

For the year 2015 the capital gains tax is 18%. In the year the sale takes place, the capital gains from the sale is treated as taxable income. - RSK - Capital Gains

Value added tax

Tax Rate (the general VAT) in Iceland is 24%. However various consumer goods and services are subject to a lower VAT rate of 11%, for instance food, hotel accommodation, newspapers and books, heating, electricity and fuel. - RSK - Value Added Tax

Type of Company

Iceland ranks among the top countries in the world when it comes to the ease of establishing a business according to the World Bank.

Registration of VAT and Payroll

Establishing a company in Iceland requires individuals to apply for a VAT ID number at RSK (Directorate of Internal Revenue). This is a rather simple task in practice. It involves a two-page form which includes VAT ID registration a long with a notification of the estimated payroll from the company. The form needs to be filled out and returned to RSK offices. The form only exist in Icelandic and can be accessed by clicking here.

Your application will be processed in the registration database at RSK and you will be given a confirmation of the registration. This process varies from 1-7 business days but usually takes 2-3 days. If any changes occur regarding the nature, purpose or ownership of your business entity they need to be reported within 8 days of the change being made as well as if termination is the case.

Private Limited Company (PRLC)

A company limited by shares may have one or more shareholders. When it is established the minimum requirement of share capital, including registration fee, is paid to the RSK (Directorate of Internal Revenue / Register of Enterprises division). The share capital requirement for a Private Limited Company is 500.000.- ISK (including the registration fee of 130,500 ISK.

Before an establishment of a PRLC with a single shareholder can be made, a memorandum of association needs to be submitted to the RSK along with a VAT ID / Payroll form, Company Charter (stofnskrá), board resolutions (samþykktir), as well as a notification of the establishment of a PLC.

Investing in Iceland - learn more about PRLC´s, Public Limited Companies and othere types of companies.

Skilled Workforce

Iceland possesses a skilled workforce with a high-level of education. Consistently ranking in the top-10 for qualified engineers, IT skills and a high percentage of population completing a university education, Iceland has the human resources required to operate data centers.

From Hellisheiði

Global Peace Index

Iceland was chosen as the most peaceful country in the world for the seventh consecutive year by The Institute for Economics & Peace. Iceland is followed by Denmark, Finland and Norway. Amongst the factors the institute takes into account are the proportion of citizens currently incarcerated, freedom of the press, perceived willingness to fight in wars, access to weapons, the rate of violent crime, gender inequality, and the amount of political corruption.

Source: Institute for economics and peace

Financial Reporting and Auditing

A company operating in Iceland must submit annual accounts that comply with accounting rules and disclosures, which reflect a true and fair view of the company’s assets, liabilities, results and financial position as per standard EU requirements.

PWC - Establishing Business in Iceland

Every limited company in Iceland is required to elect an auditor or inspector and have its annual accounts audited. For public limited companies, a state-authorized public accountant must perform a full-scale audit. Publicly listed companies must elect two auditors, one of whom must be a state-authorized public accountant.

Why Iceland?