Country Reports

Iceland Country Report

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Risk Level

Very High


Executive Summary

Iceland implemented less strict containment measures compared to other European countries, but the economy still declined during the second quarter of 2020 before starting a gradual recovery during the second half of the year. Output is expected to continue its gradual recovery in 2021, assuming a second wave of coronavirus disease 2019 (COVID-19) virus cases is avoided. The Central Bank of Iceland (CBI) has cut interest rates by a cumulative 200 basis points since the start of 2020, and also started purchasing assets in May. Although we project monetary policy to remain unchanged for the rest of 2020, the CBI will be ready to act if economic conditions deteriorate.The government’s policy priorities will continue to focus on responding to the COVID-19-related economic challenges. Iceland has been among the first European countries to start easing the regulatory restrictions that have been put in place after the outbreak started. These are done in stages; each stage will likely last up to three weeks and progress will be conditional on how the outbreak develops. Travel restrictions will likely be aligned with the Schengen zone. Since October 2019, Iceland has been on the Financial Action Task Force (FATF) – a list of countries that have failed to take sufficient measures to combat money laundering and the financing of terrorism. Until the country completely succeeds – some reforms are already under way – transactions to Iceland are likely to undergo greater scrutiny in some cases.
Last update: September 17, 2020

Operational Outlook

Iceland welcomes foreign investment, but with restrictions in some sectors, including the fishing industry. The country has an abundance of cheap and green geothermal energy. The workforce is flexible, skilled, productive, and heavily unionised; collective wage agreements are a norm. Unions are generally non-political and decentralised; however, the current leadership sees unions as a tool for grand social change and is more willing to strike. This was demonstrated in early 2020 and during the coronavirus disease 2019 (COVID-19) virus pandemic. Since October 2019, Iceland has been on the Financial Action Task Force (FATF) grey list for insufficient anti-money-laundering legislation. Transactions to Iceland are likely to be deeply scrutinised.

Last update: June 17, 2020



Terrorism risks are negligible and are likely to remain so. There are few high-profile targets aside from a NATO radar station, and no known non-state armed groups operate in the country. However, Iceland has had some politically motivated attacks or attempts of attacks in the past. In 2012, a man detonated an IED outside the office of then-prime minister Jóhanna Sigurdardóttir in a disagreement over her policies; he has not been charged. According to the National Police Commission report, the Hells Angels motorcycle club has made threats against the minister of interior as part of the organisation's pushback against regulatory reforms concerning the fight against organised crime.

Last update: June 17, 2020


Crime rates in Iceland are very low by international standards. During the coronavirus disease 2019 (COVID-19) virus pandemic, crime has declined. Violent crime is rare, despite a high rate of gun ownership. Organised crime is relatively minor. Petty crime is mostly concentrated in the capital, Reykjavík. The investigation and prosecution of financial crime has expanded exponentially since the 2008–09 financial and banking collapse, when a special prosecutor's office was established, the remit and resources of which have since been expanded. However, since October 2019, Iceland has been on the Financial Action Task Force (FATF) grey list owing to inadequate anti-money laundering and counter-terrorism financing measures.

Last update: June 17, 2020

War Risks

Iceland faces negligible risks of interstate or civil war, although the country occupies a key geostrategic location in the event of potential future global tensions. Despite being a NATO member, Iceland has no standing army, although it maintains a coast guard and air defences. NATO countries operate a periodic, rotating deployment of fighter aircraft to patrol Iceland’s airspace. Iceland disputes the ownership of Rockall Island and its surrounding oil reserves with the United Kingdom, Ireland, and Denmark. However, any disputes are likely to be resolved at the diplomatic level and remain extremely unlikely to lead to a military conflict.

Last update: June 17, 2020

Social Stability


There is little support among the wider public for perceived 'anti-social behaviour’, which limits the incidence of disruptive activism. Political and environmental protests tend to be peaceful, aimed at raising awareness of relevant issues, and are not intended to cause disruption or damage to business operations or injuries. Political protests have become more regular in the aftermath of the protests that followed the country’s financial and banking collapse in 2008–09. Perceived corrupt practices will also remain a likely trigger of demonstrations, as was the case in November 2019. Risk of protests in 2020 is mitigated by restrictions on large public gatherings owing to the coronavirus disease 2019 (COVID-19) virus outbreak.

Last update: June 17, 2020

Health Risk


Vaccinations required to enter the country

No vaccinations are required to enter the country.

Routine Vaccinations

Hepatitis B: A vaccine is available for children at least two months old.

Diphtheria-Tetanus-Polio: A booster shot should be administered if necessary (once every ten years).

Other Vaccinations

For Children: All standard childhood immunizations should be up-to-date. In the case of a long stay, the BCG vaccine is recommended for children over one month and the MMR (measles-mumps-rubella) vaccine for children over nine months.

Last update: April 5, 2019

Natural Risks

Very high
Last update: April 5, 2019


Last update: April 5, 2019

Practical Information


Temperatures in the summer are mild and during this time (late may-mid-August), the sun sets very late in the day. At the end of June, the sun sets around midnight and rises at 3:00 am. The Aurora Borealis can be seen beginning in the end of August. In the winter, nights are very long and temperatures cool. November, December, and January are the darkest months of the year. Rain is common throughout the year and weather conditions can change several times within the same day.

Useful Numbers

Country Code: +354
Police: 112
Fire Dept.: 112
Ambulance: 112


Voltage: 220 V ~ 50 Hz


Last update: April 5, 2019