In a breakfast meeting this morning, held by Invest in Iceland Agency, Laurence Naraina a tax expert with PwC-Belgium, introduced his findings on the competitiveness of the Icelandic tax legislation regarding moveable investments.

On May 14th Althingi, the parliament of Iceland, passed a bill on participation exemption for domestic legal entities making corporations exempt from paying taxes on capital gain. This new legislation is yet another step toward making Iceland an ideal location for financial activity and coupled with a low corporate tax rate of 15% and a simple and transparent tax system it fortifies Iceland’s position as one of the world’s most competitive business environments.

The highly competitive fiscal system in Iceland is both simple and effective, and has been recognized as such by a number of international companies that have decided to relocate their business to Iceland in the past few years. The main attraction has of course been the low 18% flat tax rate levied on corporate net gain. But Iceland has become even more competitive.

The Invest in Iceland Agency has just published Doing Business in Iceland 2008, the sixth edition of the popular Doing Business in Iceland handbook.  A PDF file of Doing Business in Iceland can be down-loaded from our website www.invest.is/publications, and a hard copy will be available on February, 21st.

Last week PricewaterhouseCoopers in Belgium, released their study on incentives schemes applied in Europe and Canada. The study was initiated by the Invest in Iceland Agency both to emphasize the importance of incentives to attract foreign investors into remote areas and also to instigate dialog on how incentives could benefit foreign direct investment in Iceland in general.

Iceland has surpassed Norway as the best country to live in, according to the UNDP Development Index published on November, 27th.  Iceland edged out Norway because of new life expectancy estimates and updated figures for gross domestic product and is now considered the most desirable country to live in.

A recent study by Eurostat showed that Icelandic households have the highest internet access in the EEA. The study also revealed that more Icelandic homes have broadband connection than in the rest of Europe and Iceland tops the list for most internet activities carried out, e.g. use search engines or send e-mail with attachment.

In a board meeting last week Landsvirkjun (National Power Company) decided that they would focus their energy supplies towards less polluting, environmentally friendly industries, thus changing course from its predominantly aluminum focused strategy.

Iceland ranks #6 of 159 countries included in the Transparency International Corruption Perceptions Index 2006, with a score of 9.2. Finland tops the list with 9.4  and all the Nordic countries show good performance, ranking from #1 to #10, reflecting a professional and transparent public administration, combined with strong civil society and civic culture.

On the 28th of September the government of Iceland approved on a new submarine cable, Danice, between Iceland and Denmark. The cable will be laid by Farice Inc., which is 80% Icelandic and 20% Faroese. 

Ólafur Ragnar Grímsson, President of Iceland, has confirmed that Microsoft Corporation has narrowed its options for Data Center location from nine to three, and Iceland is one of the final runners.

On September 4th 2007, Invest in Iceland Agency and the Trade Council of Iceland hosted a seminar in Reykjavik on the issues of foreign specialists in Iceland.

Iceland has the second highest quality of life, according to a study on the economy of 183 countries around the globe. Norway scores highest, with Australia in third place. Source: Pocket World in Figures 2008 (published by The Economist)

Invest in Iceland Agency will attend The Power and Cooling summit and expo 2007 that takes place in London on October 4-5. 

According to a benchmarking study, by Price Waterhouse Coopers in Belgium for Invest in Iceland Agency in association with Teymi, Hitaveita Suðurnesja, Orkuveita Reykjavíkur, Farice, Siminn, and Landsvirkjun, Iceland stands out as a location for Data Centers.

On the recently published IMD World Competitiveness Yearbook 2007, Iceland was ranked the 7th most competitive economy in the world -4th in Europe.

Iceland’s status as one of the world’s most competitive economies is confirmed in the IMD World Competitiveness Yearbook 2007. This year Iceland ranks #7 globally and is Europe’s 3rd most competitive economy, outperforming the continents – and some of the worlds – biggest industrial nations.

The European Private Equity & Venture Capital Association (EVCA) undertook a comparison between 21 countries on the tax and legal environments they offer for the private equity and venture capital industry. EVCA collected information on 13 criteria for each member state, valid as of February 1, 2004 or later. Equal weight is accorded to all of the 13 criteria when calculating the composite score. Some criteria are based on more than one factor, in which case the average is used for the score. The total score of each of the 21 countries is shown in the table below. Iceland’s score is added to the table, strictly calculated according to EVCA’s methodology. The lower the score, the more favourable the environment.

Data Storage is a fast growing industry and Iceland does offer what this industry needs: Security in a technologically advanced society, with a sound infrastructure, an educated work force and political stability. Cost-competitive and reliable green energy. A temperate climate and abundant, inexpensive cold water to further lower the energy cost. Available land and secure housing at competitive prices. And last but not least, secure connections to the world’s information hubs.

With its stunning scenery, surprisingly mild climate, and new 14 percent reimbursement program for all filming expenses, Iceland is attracting major movie productions.

On January 1st 2007 the income tax on individuals in Iceland is reduced by 1%, the allowed tax deduction is raised and VAT on food, restaurant services, books, magazines and music is lowered.

Sustainable geothermal energy replaced coal in Xian Yang on december 3rd 2006 when ENEX-China formally opened phase I of the district heating system. The Icelandic Minister for Foreign Affairs, Mrs. Valgerdur Sverrisdottir, said she was extremely proud to note that Icelandic knowledge was contributing to keeping Chinese households warm and develop pollution-free and sustainable energy resources.

Hydro has opened a North Atlantic office in Reykjavik to support its strategy of repositioning and growth in its primary aluminium activities and mature new business opportunities.

Iceland´s positive business environment, low tax rates and efficient infrastructure make the country an ideal candidate for an international finance center according to a new report compiled for the Prime Minister by a team of experts. The team recommended a number of measures and government officials hope that the Parliament will finish the legislative reforms before summer.

Iceland Stock Exchange will become part of an integrated Nordic and Baltic securities market and participate in establishing the OMX Nordic Exchange as a leading European marketplace by the end of this year. This decision has raised the profile of the Icelandic market and the opportunities available to foreign investors.