Icelandic businesses face heavier rules and red tape, lawyer says

Icelandic companies face a greater administrative and regulatory burden than competitors elsewhere in the Nordic countries, according to lawyer Sigurður Kári Kristjánsson, writing in an opinion article published by Morgunblaðið.

Politicians across the country’s parties have repeatedly promised to simplify business regulations, particularly before elections, he writes, but with little result. Meanwhile, he says, steep tax increases are weighing on businesses and households.

A report by consultancy Copenhagen Economics, prepared for the Nordic Council of Ministers, recently highlighted the heavier burden on Icelandic companies. Kristjánsson points to excessive faith in regulation, authorities going beyond minimum requirements when adopting European rules, and public agencies interpreting and enforcing rules more strictly than necessary.

He argues that burdensome regulation and tough enforcement affect many sectors, including environmental affairs, financial markets, licensing and food production. Even podcasts, he writes, are subject to burdensome state intervention.

Kristjánsson says public bodies often resist changes aimed at simplifying rules. Drawing on his experience as a lawyer for businesses in many industries, he describes companies spending substantial time preparing reports for government agencies and waiting for decisions. He says the burden falls particularly heavily on small and medium-sized businesses, which have fewer resources than larger firms to hire specialists or obtain expert advice.

He also says more business owners and managers are reluctant to challenge public agencies or take disputes to court, even when they believe government regulation and oversight are unjustifiably harming their operations. The view that it is no longer worth opposing excessive state power is becoming more common, he writes.