When businesses look to expand their offices abroad, there are many factors to consider: taxes, work force, and of course, location. So, what’s the coolest place to set up shop these days?
For some companies, it’s Iceland.
"The state of the economy is very good here — we have strong finances, a very strong system of pension funds and a flexible labor market. A very adaptable economy," says Geir Haarde, Minister of Foreign Affairs.
Iceland is just a three-hour flight from Europe and five hours from the U.S. — giving business a unique advantage into both markets and an ability to operate in a strong, yet small economy.
"The advantage is that you know everyone, the disadvantage is that everyone knows you,” says Kari Stefansson, CEO of De Code Genetics, a biopharmaceutical company using human genetics to develop drug for common diseases.
One of the biggest ventures is genetic research. Successful for capitalizing on its ability to genetically map Iceland’s own population of just 300,000, and now their research, along with their business practices, are drawing attention from around the globe.
"I think it's very good for us to be able to interact freely with the U.S. and Europe and sort of draw some benefit from being a rock in the middle of the Atlantic," says Stefansson.
"We were one of the first to expand successfully abroad and I think it also gave the other companies more credit to do that," says Robert Wesman, CEO of Actavis.
Expansion of Icelandic businesses throughout the world has attracted many foreign investors domestically, bringing new money to an already thriving economy.
Fishing has always been king here, and the government doesn't expect that to change overnight. But, while they know that Americans view this country as a stopover point to Europe, they are hoping that American corporations will come to see this as a destination point.
"If you're a foreign investor coming here you're not always looking for the cheapest labor because you already have a cheap power source. That means you can pay the worker better than you would otherwise be able to," says Haarde.
"We have three niche markets: offshore shipping, fishing and sustainable energy. So this is a business concept. Of course everyone is looking for renewable energy, and we have it here,” says Arni Magnusson of Glitnir Bank.
It isn’t just cheap energy sources that drive business costs down either. Iceland has some of the lowest corporate taxes in the world — a flat 18 percent rate — a strong incentive to keep their already successful companies in place, and encourage new ones to grow.
Suddenly, business is booming in what, until now, was the middle of nowhere.