Iceland Market Entry

Iceland Market Entry

Subchapters:

  • Market entry
  • Forms and conditions of operation on the market
  • Marketing and Communications
  • Issues of intellectual property protection
  • Public procurement market
  • Payment terms, payment ethics and resolution of commercial disputes
  • Visas, fees, specific conditions of travel to the territory
  • Employment of citizens from the Czech Republic
  • Fairs and events

Market entry

According to cheeroutdoor.com, Iceland is a member of the European Free Trade Community (EFTA), WTO and OECD. Access to the EU single market is secured through the Agreement on the European Economic Area (EEA) from 1994. Foreign trade between Iceland and the Czech Republic is governed by the Agreement on the Enlargement of the EEA. For industrial products, imports from the Czech Republic to Iceland are duty-free and without quantitative restrictions. The EU-Iceland agreement, effective since May 2018, has largely liberalized the import of food and agricultural products to Iceland. Duty-free imports apply to almost all processed food products and 91% of raw materials. Quantitative and tariff restrictions are maintained for items sensitive to Icelandic growers and breeders. Icelandic legislation requires much of the business activity to be covered by licenses and only recognizes Icelandic citizenship for registration, which means the necessity of using the intermediary services of Icelandic business organizations. Common consumer imports can be distributed through direct Icelandic importers, industrial durables are usually distributed through specialized trade agencies. Decisions on Icelandic import and export licenses rest with the Ministry of Foreign Affairs and the Ministry of Industry and Innovation. Imports of live animals, frozen meat, selected dairy products and vegetables are subject to customs duties including import quotas and strict phytopathological regulations. The customs system respects the standard European rules for the exchange of goods. durable industrial goods are usually distributed through specialized trade agencies. Decisions on Icelandic import and export licenses rest with the Ministry of Foreign Affairs and the Ministry of Industry and Innovation. Imports of live animals, frozen meat, selected dairy products and vegetables are subject to customs duties including import quotas and strict phytopathological regulations. The customs system respects the standard European rules for the exchange of goods. durable industrial goods are usually distributed through specialized trade agencies. Decisions on Icelandic import and export licenses rest with the Ministry of Foreign Affairs and the Ministry of Industry and Innovation. Imports of live animals, frozen meat, selected dairy products and vegetables are subject to customs duties including import quotas and strict phytopathological regulations. The customs system respects the standard European rules for the exchange of goods.

Forms and conditions of operation on the market

The role of local business representatives, i.e. persons with Icelandic citizenship, is irreplaceable in the phase of the first business contacts. In Iceland there is, albeit on a smaller scale, the usual network of private institutions of importers, exporters, wholesalers, retailers and industry-specific associations, ensuring the realization of trade flows of goods and services. The Icelandic market is basically open. The only part of it where protection measures are applied is trade in selected agricultural and food products, alcohol and tobacco products.

Foreign investors usually choose to establish a local limited liability company or open their own foreign branch. The main reason is the lower corporate tax rate of 20%. The minimum capital to start a company in Iceland is 500,000 ISK (approx. 3800 USD). The entity must be registered in the Commercial Register, which takes approximately 7-10 days, and registration involves additional costs of approximately 130,000 ISK (approx. 1000 USD). A company can be founded by one or more persons, but at least one of the founders must be an Icelandic resident or a citizen or resident of an EEA or OECD country. Branches of foreign companies must also be registered in the Commercial Register. The registered name must also include the name of the parent foreign company. All relevant documents must be submitted to the Icelandic authorities in a certified translation into Icelandic.

Marketing and communication

All the usual means used in economically developed countries can be used for advertising and promotion, with restrictions on the promotion of alcoholic beverages and tobacco products. The opportunity to use trade fairs and exhibitions is very limited, because in view of the geographical location of the country and its economic dimension, most of the events have only a local character without major participation of foreign exhibitors. In addition to the annual tourism trade fair (areas of interest in North America, North Atlantic, Western Europe), exhibitions with a fishing theme and related processing industry, which do not exceed the local region in their importance, are also regularly organized.

Issues of intellectual property protection

In Iceland, the issue of intellectual property protection is handled by the Icelandic Patent Office and the Ministry of Industry and Innovation. By signing the EEA Agreement, Iceland acceded to a number of agreements in the subject area (including the Patent Cooperation Treaty and the Madrid Protocol). As a result of WTO membership, Iceland also amended its legislation in accordance with the Agreement on Trade-Related Aspects of Intellectual Property Rights, and in 2004 Iceland joined the European Patent Convention. There is currently no known case of infringement of intellectual property rights in relation to Czech entities in Iceland.

Public procurement market

Iceland acceded to the WTO Multilateral Agreement on Public Procurement in 2001. Selection procedures are carried out under the competence of individual departments and are governed by relevant internal regulations. Current practice requires the participation of the Icelandic state in some public contracts. Information about tenders for contracts from public budgets is published in the national electronic database Ríkiskaup, which is managed by the Ministry of Finance. The database of EU and EEA tenders (including Iceland) can be found in the online version of the Supplement to the Official Journal of the EU.

Payment terms, payment ethics and resolution of commercial disputes

A standard system of commercial law offices, consulting firms and arbitration courts is available to resolve commercial disputes. However, the costs of even a relatively simple legal dispute are considerable. As in other EEA countries, the Czech SOLVIT center helps domestic entrepreneurs and citizens informally and free of charge to solve problems in the internal market of Iceland. Entrepreneurs and citizens can turn to the SOLVIT center if they feel they have been harmed by the wrong application of European law by any of the state authorities of an EU member state, or EEA (including Iceland). Entrepreneurs can turn to the center, especially when they run into difficulties with the access of goods and services to the market in another EU member state, or EEA, also in the case of the right to settle in another member country for the purpose of doing business, in the recognition of diplomas and professional qualifications, but also in the matter of taxes, public procurement or border control. In each EU country, or The EHP is a SOLVIT center and the advantage of the system is that the individual centers are electronically linked, which enables fast communication and cooperation between them.

Visas, fees, specific conditions for traveling to the territory

The Czech Republic and Iceland are part of the Schengen area. For trips to Iceland, a Czech citizen needs a passport or identity card with a machine-readable zone, valid for the entire period of stay. When entering the territory of Iceland, customs controls are carried out on the import of alcoholic beverages, cigarettes and tobacco. It is possible to import a maximum of 10 kg of food at a price not exceeding 25,000 ISK, an amount of alcohol corresponding to approximately 3 liters of wine and 6 liters of beer, and a maximum of 200 cigarettes. The importation of narcotics, meat and meat products, milk and eggs, snuff and chewing tobacco is prohibited. A special permit is required for the import of weapons and ammunition, all types of telecommunications equipment (except one mobile phone per person), live animals, plants and medicines other than for personal use for the duration of the stay (or a maximum of 100 days). Fishing and hunting equipment used outside Iceland must be accompanied by a certificate of disinfection. EU/EEA regulations apply to the operation of motor vehicles. In Iceland, foreigners do not face any extraordinary risks from a political or security point of view.

Employment of citizens from the Czech Republic

Information on labor law conditions in Iceland can be found on the Integrated Portal of the Ministry of Labor and Social Affairs. There is no special registration requirement. If a citizen of the Czech Republic is looking for work in Iceland, he can stay there for up to six months without a permit. If he intends to stay longer in Iceland, he does not need to apply for a work permit, but he needs to be registered in the National Register. A significant position in the Icelandic labor market is held by trade unions, in which more than 80% of all employees are members. Unions are decentralized and apolitical. In addition to the annual agreement on wage conditions in individual sectors, they also have an irreplaceable role in labor law disputes. Although there is no formally set minimum wage in Iceland, in 2021 the salary for a full-time position could not be lower than 351,000 ISK/month (approx. 2600 USD) in agreement with the unions. Standard working hours are 40 hours per week, with state and municipal employees working a maximum of 36 hours per week. The conditions for posting workers from EU countries are set by Act No. 45/2007, which implements the EU Directive 96/71/EC on the posting of workers.

In Iceland, the European Health Insurance Card is valid for the provision of emergency medical care in state health facilities under the same conditions and at the same price as for Icelandic insured persons. When traveling to Iceland, it is recommended to be equipped with additional travel insurance to cover any additional costs (deductibles, dental treatment, repatriation, etc.).

Fairs and events

  • Mid-Atlantic Tradeshow– trade and tourism fair (Europe and North America), annually at the turn of January and February in Reykjavík
  • DesignMarch– design exhibition, held annually in the spring in Reykjavík
  • Icelandic Fisheries Exhibition & Awards– an international fair for the fishing industry in Kópavogur, held in June

Iceland Market Entry