REYKJAVIK, ICELAND -- When you think of Iceland, you'd be forgiven if you wonder where the country is on the map -- or if you know of it, stereotyping the place as being cold and containing little more than volcanoes.
However, in the aftermath of a financial meltdown six years ago which sent Icelandic banks to their knees, the country is finding itself of interest to international companies, and skilled worker immigration policies must evolve as a result.
Iceland, a country close to both the United States and Europe, accounts for approximately 320,000 residents. When compared to the likes of New York City and London, you realize how small the population is in relation to large land mass. Following slow economic recovery, the stabilization of Icelandic currency and a rapid re-think of its place in the modern business realm, the country has gone full-throttle to entice foreign investments to its shores.
What can such a country offer international businesses?
The country is one of few in the world which runs almost entirely on renewable energy resources. Geothermal and hydroelectric plants generate the country's electricity needs, with fossil fuels only imported for transport. Therefore, electricity is cheap, and combined with a cool climate, the data center industry in particular is attracting the notice of a number of companies -- as running costs are generally lower than those found in Europe or the United States.
In addition to these advantages, Iceland's government offers incentives including a 20 percent income tax shelf, 50 percent discount on real estate tax for businesses, discounts on social security and flexible depreciation rules. For tech firms, the exclusion of computing equipment from VAT is also a bonus.
Incentives and cheap energy are benefits, but there is something this country lacks which may dull its competitive edge in today's corporate world: a streamlined immigration and visa policy for global companies looking to hire and move employees.
Thordur Hilmarsson, Director of Foreign Investment at Invest in Iceland -- part of the Promote Island group -- says that while this has not deterred companies from settling on Icelandic shores, the current visa process is "burdensome." If you are a citizen of an EU member state, there is little more to the process than registering as a citizen -- but "if you are outside of the EU, then it's a totally different story."
Citing examples of companies which have faced long delays and problems moving staff to Iceland if they are outside of the EU -- although the US isn't so much of an issue -- the executive told ZDNet that new legislation is on the way, as businesses have pushed hard in recent times for an overhaul of expat rules.
"We have been pushing for expat legislation allowing people to both reside and get some tax incentives in Iceland if they have specialized knowledge, or it can be justified that they are needed in Iceland," Hilmarsson said.
"We are one of very few countries who have not yet implemented expat rules securing a speedy expedition of work permits and also the ability to actually work for a longer period without having to renew visas every 90 days or so.
We see this as a growing problem because of the growing number of companies who are becoming international [...] and they need to have access to foreign talents."
While Hilmarsson believes a solution will be found for Iceland's companies before next spring, the story is not a new one.
In order to grow properly, companies need to be able to hire, import and train talent. In the technology sector, this freedom of labor is even more important, due to the rapidly-changing business landscape and shortage of skilled workers available worldwide.
Universities, colleges and primary education is slowly catching up -- with schools offering basic programming courses and a rising uptake of computer science graduates in some countries -- but this is not enough to fix the shortage. As a result, businesses need to recruit talent where they can.
In the UK, the latest start-up wishlist from the Coalition for a Digital Economy (Coadec) includes tax breaks and looser overseas worker immigration policies; Australian startups argue that visa expense and complexity is causing talent to move abroad, and Spanish-born tech entrepreneur Inaki Berenguer believes the US working visa system may also deter talent from heading to US shores.
The problem is not an easy one to solve, and a balance must be maintained between hiring overseas top talent, filling local vacancies with local skill, and preventing the hire of workers from abroad as purely a way to lower labor costs. However, for many tech companies, visa restrictions are limiting business growth -- and it is up to governments to recognize the fast pace of today's business landscape, and create legislation quickly enough to keep up.
As Efe Cakarel, CEO of seven-year-old startup MUBI puts it, "We're ready to grow, but without the right workers, we just can't expand."
Disclaimer: The trip was sponsored by Landsvirkjun, the National power company of Iceland.