Business
Business Etiquette
When meeting a business counterpart in Iceland, a handshake is the normal form of greeting. Businesspeople are expected to dress smartly, although casual wear is widely accepted for social functions. Although an Icelander’s second language is generally Danish, a very high proportion of the population is fluent in English. Visits between May and September should be planned, as many businesspeople go on trips abroad at this time. July is the holiday month and offices often close down for a three-week annual break. Standard office hours are 0900-1700 Monday to Friday (although many firms alter this to 0800-1600 during the summer).
Characteristically, Icelanders can be quite reserved (except on Friday and Saturday nights) but very direct. Visitors are often invited into homes (especially if on business) and bringing a gift for the host is the norm (a bottle of foreign wine is always welcomed). Instead of surnames, the majority of Icelanders use the system of patronymics. Instead of a surname the first name of the father is used plus son (son) or daughter (dttir). Because of this, the telephone directory is listed by first name.
Business Profile
Iceland is in the unusual position of having its economy dominated by one industry: fish. A quick walk around Reykjavik’s harbour area is enough to see how dependent the city is on the sea and fishing as its main source of income, with the annual catch for the whole country averaging about 1.6 million tonnes. The importance of fish to the Icelandic economy was demonstrated during the bitter Cod Wars in the 1970s and 1980s when Iceland came to blows with the British navy. The majority of the fish caught in the waters around Reykjavik heads overseas for export, in the form of shellfish, canned fish, shellfish, frozen fish, smoked fish, cod-liver oil and other fish by-products. However, both Iceland and Reykjavik’s economy is trying to diversify and the share of marine products in total exports has fallen from around 90% in the early 1960s to around 70% today.
Tourism is Reykjavik’s most important source of foreign revenue after fishing and it has been targeted by the government for growth. Tourism, however, faced something of a crisis in 2002, as Go, the British budget airline, stopped its cheap flights from London to Reykjavik. The war in Iraq was a tougth time globally for the industry, and Iceland suffer from it too. The country, however, with its mix of beautiful, rugged scenery and the vast choice of activities it offers, continues to attract travellers from all over the world.
Other industries include the sale of minerals, such as aluminium, ferro-silicon, cement and nitrates. Production is increasingly moving to high-technology, demonstrated by the fast-growing number of computer software and biotechnology companies, such as deCODE genetics, a company set up by ex-Harvard professor Kri Stefnsson in1996.
Reykjavik has traditionally been very attractive to foreign investors because of its highly educated work force, low energy costs and low unemployment rate, which fell from 5% in 1995 to just 3.1% in 2003 (the national average for the same year was 3.3%). Iceland boasts one of the highest living standards in the world, with per capita income of 36,320 US Dollars (2002). The Trade Council of Iceland, Borgartun 35 (tel: 511 4000; fax: 511 4040; website: www.icetrade.is), can advise on inward investment and doing business in Iceland.
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Business