The Icelandic government introduces a new system around work and residence permits for people outside of EEA

Last week, a press conference was held by three Icelandic ministers including Katrín Jakobsdóttir, the prime minister, where they proposed a new system around the granting of work and residence permits for foreign workers coming from countries outside of The European Economic Area (EEA). The EEA includes all EU countries and Iceland, Liechtenstein, and Norway.

This new system will enable more foreign workers to receive both work and residence permits. On top of that, the application process will be made more efficient which should make Iceland a more feasible and intriguing destination for people coming from abroad.

This has to be considered great news for the Icelandic society and startup ecosystem. This shows that the economic and cultural value received from foreigners enriching Icelandic diversity is being more and more recognized by the government. Iceland will have to rely on foreigners to do many of the jobs that will be created in the coming years and decades to maintain the same quality of life and prosperity people in Iceland are used to. It is important that the Icelandic labor market becomes more accessible to those who want to come here.

In an announcement sent out by the government a new approach is said necessary for people coming from outside the EEA who want to move to, live and work in Iceland. Iceland is said to be significantly behind leading countries when it comes to attracting and enabling immigrants to become full participants in society. The current system is described as complex and based on inefficient processes. The restrictions placed on granting work permits are said to be too great.

The main goals of these upcoming changes will be to improve transparency, fairness, trust, and efficiency.

To achieve these goals, the following four actions will be taken based on a proposal created by a task force assigned to revise the legislation:

The restrictions on the distribution of residence and work permits to foreigners will be eased

Various changes will be made in order to make it easier for foreigners to work and live here so Iceland can become a more desirable and competitive option for workers and students from outside the EEA.

Predictability will be ensured by forecasting manpower requirements

A new system will be established that takes into account the manpower needs of the labor market. At the same time, efforts to minimize social dumping will be extended. Additionally, the number of labor exchange agreements with other countries will be increased.

The system will be simplified by merging residence and work permits

Residence permits, which are today issued by the Immigration Office, and work permits, which are issued by the Labor Office, will be combined into residence permits that will be divided into different categories and issued by the Immigration Office.

The application process for a residence permit will be simplified and improved by digitization and automation

In order to make the application process more accessible to applicants, ambitious plans are proposed to speed up digitization which will increase automation. This should ensure a shorter procedure time, facilitate data processing and increase the overview of applications.

Katrín Jakobsdóttir, the prime minister, had this to say about these important changes: “These changes involve a significant change for the Icelandic labor market. There is a lot of work to be done on the detailed implementation of the proposals, which will be done in consultation with the parties of the labor market, but the government’s vision is clear and it includes fairer, more transparent, and more efficient rules for the participation of people from outside the EEA in the Icelandic labor market.”