The Icelandic Ministry of Industry, Energy and Tourism proposed a new bill of law that has recently been passed for investments in Iceland. The ‘Incentives for Initial Investment in Iceland’ bill is directed towards promoting initial investment in commercial operations, the competitiveness of Iceland and regional development by specifying what incentives are permitted in respect of new investments in Iceland and how they should be used.
Now that the Act is in motion, the Minister of Industry has authorisation to enter into new investment contracts on behalf of the Government. The previous methodology of making investment agreements on a case-by-case basis, subject to approval from the Parliament and the EFTA Surveillance Authority has been abandoned. This new process will consequently enhance initial investment in Iceland, the competitiveness of the country and also highlight which incentives can be granted to initial investment projects.
Applications for Investment in Iceland will now be submitted to the Ministry of Industry where a committee board will review all applications. The Invest in Iceland Agency will perform cost benefit analysis, as well as establishing the social and economical benefit for the country. The committee board then make a proposal to the Minister of Industry and the Minister makes an offer for an incentives package to the applicant on the basis of the Act.
“The aim of the new bill is to advance the promotion of industrial travel in a prominent way,” commented Thordur H. Hilmarsson, Managing Director of the Invest in Iceland Agency. “With renewable energy at very competitive prices, well-educated labour, low corporate taxes and efficient placement between Europe and the USA, Iceland meets many requirements which are most relevant for foreign investors. The passing of the new Act is a great step forward for Iceland and a superb opportunity to bring a wide variety of direct foreign investment to the country”
Proposed investment projects need to meet requirements, such as being beneficial for the Icelandic economy and society, in terms of job creation, rural development, export and tax revenues and knowledge. However, approved investment projects will receive benefits in return, including derogations from taxes and charges. In addition, authorisation to fix the rate of income tax, in line with the current rate of income tax, for 10 years can be granted, as well as exemption from customs and excise duties on importation or domestic purchase of construction materials, machinery and equipment for the building and operation of the investment project.
The Invest in Iceland Agency is an independent agency that promotes foreign direct investment to Iceland. For more information about investments in Iceland visit www.invest.is