Foreign Citizens in Iceland Face More Difficulties Finding Jobs

Reykjavík restaurant workers

Foreign citizens make up nearly 50% of those currently unemployed in Iceland, while they only make up 15-20% of the population, RÚV reports. This overrepresentation shows that foreign citizens in Iceland face additional obstacles when it comes to finding work, says Katrín Ólafsdóttir, assistant professor of economics at Reykjavík University.

Language skills not the only explanation

The overrepresentation of immigrants on the unemployment register is not new. It was also the case throughout the COVID-19 pandemic. In 2021, Gundega Jaunlinina of the Icelandic Confederation of Labour (ASÍ), stated it is often more difficult for unemployed foreigners to find work than for Icelanders. “Because people may not be as active in their job search and don’t know exactly where they should look and employers are unfortunately less likely to hire foreign workers,” she stated.

“It seems that Icelanders have priority, to some extent, when it comes to jobs,” Katrín Ólafsdóttir observes. “But why that is, I don’t know. This is something that I think we need to take a closer look at, what is going on there. Possibly it has to do with Icelandic language skills, or something like that. But that can’t be the only reason.”

High participation rates but little support

While foreign citizens are overrepresented on the unemployment register, immigrants in Iceland have very high economic participation rates. The latest OECD Economic Survey of Iceland found that of all OECD countries, immigrants in Iceland had the highest participation rate, at over 85%. The survey emphasises that Iceland should step up its efforts to better integrate migrants and their children, including through more effective language courses, skills recognition, teacher training, and meeting immigrants’ housing needs. Other recent labour market studies have also called on authorities to ensure immigrants’ job security and mental health.

The OECD survey also found that immigration brought large economic benefits to Iceland’s economy, something Katrín underlines as well. She asserts that Iceland would not have experienced as much economic growth in recent years if it had to been for the influx of foreign workers onto the labour market. “We would never have been able to support the increased service to tourists without more helping hands,” she stated.

Unemployment low in general

Unemployment in Iceland is relatively low, with the seasonally adjusted unemployment rate standing at 3.3% in August 2023 according to figures from Statistics Iceland. The unemployment rate decreased by 0.2% between months while the employment rate increased by 0.9% and the activity rate by 0.8%. In total, some 7,600 people were unemployed in August of this year. Iceland’s population is 387,758.

Multicultural Festival Celebrated as Part of ‘Friendship Week’ in Vopnafjörður

The East Iceland village of Vopnafjörður will celebrate its second annual Multicultural Festival on Saturday, with international food, dance exhibitions, games, international cartoons for children, and more. Austurfrétt reports that just under 10% of the fishing village’s population is of foreign extraction, with full-time residents hailing from 20 different countries around the world.

As of September, 670 people called Vopnafjörður home. Sixty of these residents are originally from another country. Poles make up the largest subset of foreign residents, followed by Bulgarians. The village is also home to people from Sweden and Pakistan, among other nations.

Flags representing all the nationalities living in Vopnafjörður at the village’s 2020 Multicultural Festival. Photo: Vopnafjörður, FB.

“People have always come here from abroad,” says Þórhildur Sigurðardóttir, who oversees multicultural and diversity initiatives for the larger municipality. Þórhildur explained that the village has a history of attracting foreign workers, but it’s only recently that the makeup of the fulltime population has been so diverse.

“There are people with Faroese roots, and then Danish women came to work here. I think one of them is still left. Otherwise, there weren’t many [other nationalities] here even six years ago. For a long time, it was just one woman from Poland. But that’s changed completely.”

Vopnafjörður held its first Multicultural Festival in 2020, at which time, there were people from 22 countries living in the village. The following year, a Children’s Cultural Festival was held instead, but still with a multicultural focus. During that festival, kids were taught how to count to five in 13 languages and flags were raised for each of the nationalities living there.

This year, the Multicultural Festival is just one part of a week-long ‘Friendship Week,’ sponsored by a local youth club and programmed entirely by teenagers. Friendship Week runs from Friday, October 7 to Sunday, October 16 and will include a variety of events, including a parade, a potluck-style cake buffet, a movie night, a ‘goodwill marathon,’ in which residents are encouraged to do good deeds for one another (such as raking leaves, folding laundry, dog walking, etc), an intergenerational game night, and more.

A Golden Opportunity: New Program Teaches Vocational Skills to Young People

A new program called Tækifærið (‘the opportunity’) aims to teach young people vocational skills that will allow them to secure steady employment, Vísir reports. In 2022, Tækifærið will offer two, 13-week courses, which will teach practical skills such as how to rip out and replace flooring, paint furniture, and fix electrical wiring, as well as help participants hone their mental, physical, and social skills along the way and connect them with future employers.

The first class has six participants and is being held in Borgarfjörður, West Iceland. It received funding from the Development Fund for Employment and Education, the Mental Health Support Fund, and Landsbankinn, and is free of charge for participants.

‘Each participant must want to change their life for the better’

Tækifærið is the brainchild of Björk Vilhelmsdóttir, a social worker and former member of the Reykjavík City Council. It is founded on one of the United Nations’ three universal values: Leave No One Behind.

“Tækifærið’s organizers have faith in people—all people,” explains the program website. “We’re ready to work with those who are the furthest from the labour market; these individuals possess countless strengths. Tækifærið is built around the strengths of participants and those who work with them. We’re well aware of our weaknesses but are trying our best not to let them dictate our lives anymore.”

The program promises to empower participants, but that empowerment must be self-motivated: “The basic premise of empowerment is that people take responsibility of their own lives…Each participant must want to change their life for the better.”

Half of unemployed individuals are foreign nationals

While the program is targeted at young people in general, Tækifærið will undoubtedly be helpful for young foreign nationals living in Iceland. Unemployment in Iceland is currently 5.2%, or roughly 10,000 people. Just under half of that group, or 43%, are foreign nationals.

Vísir interviewed Alfredo Correia, from Portugal, who is one of the six participants in Tækifærið’s spring 2022 class. “I came to Iceland to grow up, because in my country it’s very hard to live,” he said. Alfredo has no formal education and decided to move abroad to seek better opportunities.

Björk is optimistic that the first class will be successful in finding work after completing the program. “Come May, I’ll be ready to take offers from the business community,” she said, “and I know there will be plenty of them.”

Health Authorities Fall Short in Reaching Foreign Citizens on Vaccination

Icelandic healthcare system

Residents of Iceland with foreign citizenship appear much less likely to be vaccinated against COVID-19 than Icelanders, data published by TV program Kveikur suggests. While just 6% of Icelandic citizens 16 and older have not been vaccinated against COVID-19, that figure is nearly 50% among residents of Iceland with foreign citizenship. Various factors could explain that high percentage, however.

Kamilla Sigríður Jósefsdóttir, deputy chief epidemiologist at the Directorate of Health, says it is clear that authorities’ messaging regarding vaccination has fallen short when it comes to reaching residents of foreign origin. “We are working to strengthen our messaging to various groups and find new ways to get information across,” she stated. “We will possibly look at making vaccination accessible at other times or other places so those who have difficulty leaving work in the middle of the day can get vaccinated.”

The data does not include any reasons as to why so many foreign citizens living in Iceland have not been vaccinated. It is, for example, possible that many foreign citizens with a registered address in Iceland are simply living elsewhere. A part of the group may have been abroad when they were invited to receive the jab or they may have even gotten vaccinated abroad. Some may have not had a phone number registered in the healthcare system, a requirement for receiving an invitation to get vaccinated.

A small number in the group may be unable to accept vaccination due to medical reasons, including severe allergies.

Unregistered Foreigners in Iceland Reaching Out for Help

Sigþrúður Erla Arnardóttir

An increasing number of foreigners whose employment or residency situation leaves them ineligible for financial help are seeking assistance from municipal services or charity groups. Sigþrúður Erla Arnardóttir, Director of the City of Reykjavík’s Municipal Service Centre for the Vesturbær, Miðborg, and Hlíðar neighbourhoods, says there are a number of options available for foreigners who have been left stranded or unemployed due to the COVID-19 pandemic.

Reykjavík has six Municipal Service Centres serving residents of different neighbourhoods. The Centre for Vesturbær, Miðborg, and Hlíðar also provides services to foreigners in special circumstances as well as individuals applying for international protection in Iceland. “This means there are more foreigners that come to us than in other neighbourhood service centres due to these particular projects,” Sigþrúður explains, “and we are seeing an increase in people coming in.”

While most foreign residents in Iceland have access to unemployment benefits, some fall outside the system due to their particular employment or residency situation, Sigþrúður says. “The people that have been coming to us generally fall into one of four groups: tourists who didn’t manage to leave the country before restrictions were put in place; individuals who are not fully registered (who have a kennitala (national ID number) but haven’t managed to register a legal address) and therefore don’t have the right to unemployment benefits or financial help; foreign nationals that came to work, didn’t find any, and didn’t manage to leave the country before restrictions were put in place; and finally individuals who have been working without a kennitala or visa and need to get home.”

Legal address required for benefits

Foreign nationals can receive an Icelandic work permit and kennitala without changing their legal residence if they are working in the country for six months or less. In this case, however, they are placed on a special registry (Utangarðsskrá) intended for foreigners working in Iceland short term. Those on the Utangarðsskrá are not eligible for unemployment benefits or other financial assistance. Some individuals in this group now find themselves no longer employed but without a way of getting home.

“The Directorate of Labour and Registers Iceland are aware of this group and we are working on this together. What Registers Iceland has done in these cases is if you can prove that you’ve had an income for a certain length of time they can backdate your legal address registration. We’ve been helping people who are in this situation to collect the documents they need to submit in order to get this retroactive registration of their legal address.”

Undocumented workers seek out NGOs

“The fourth group, those that are in Iceland without a visa or kennitala, isn’t coming to service centres, rather going to the Red Cross and church help centres. At the City our procedure is that we are required to report such individuals to the Directorate of Immigration and the police. We can’t give specific numbers, but we have heard from the Red Cross and church organisations that there has been an increase in people in that situation reaching out for help.”

Individuals choose what help they receive

While Service Centre staff can connect individuals with various services, both to assist with employment-related issues or to help them return to their home country, Sigþrúður assures that the individual ultimately decides what assistance they accept. “It’s important for this group to get the best possible service. It’s difficult if you maybe don’t speak the language, to try to understand how the system works, and that’s why we want to make contact with these groups and assist with whatever ways they can get help. But the choice always lies with the individual.”

Sigþrúður stresses that for those who have lost some or all of their employment, the first step is to contact the Directorate of Labour to determine what their rights are. “But it’s very important to know if they are fully registered in Registers Iceland and if not, what they need to do in order to register fully. Then they can always contact the municipality they live in for assistance.”

Damon Albarn Interested in Icelandic Citizenship

British musician Damon Albarn is interested in obtaining Icelandic citizenship, RÚV reports. The former Blur and current Gorillaz frontman visited Alþingi on Wednesday, where he met Independence Party MP Páll Magnússon to discuss the process for applying for citizenship, particularly citizenship granted “by legislation,” or parliamentary approval.

Icelandic law gives Alþingi the power to grant citizenship directly in certain circumstances, thus circumventing the necessity of obtaining approval via the Directorate of Immigration. Damon’s visit to parliament was apparently arranged for him by some Icelandic friends so that he could learn more about this process.

Páll told reporters that Damon is now interested in obtaining Icelandic citizenship but said the musician had had a foothold in the country for 25 years, not least because he owns real estate in the Reykjavík suburb of Grafavogur. Damon has been staying in Iceland of late while rehearsals are underway for a musical work he’s recently composed that will be staged in Harpa music hall this summer. The work was apparently inspired by Iceland, particularly the views around Damon’s house.

British Billionaire Buys Land to Protect Salmon

Jim Ratcliffe

British billionaire Jim Ratcliffe says his most recent land purchase in Iceland is part of ongoing measures to protect the country’s wild salmon stocks. Ratcliffe stated as much in a press release sent to RÚV this morning. The ultimate goal is to make salmon fishing in Iceland the best and most sustainable in the world.

The press release states that the British mogul has expanded his plans of investment in local projects in Iceland’s northeast region with the aim to protect salmon in the area’s main fishing rivers. Ratcliffe aims to protect the rivers’ surrounding land as well as the fragile ecosystem of the area as a whole.

“Overfishing threatens the North Atlantic salmon stock and it is decreasing in rivers everywhere. The north-eastern part of Iceland is one of few salmon spawning areas that has escaped [this trend] and I want to do what I can to protect the area,” Ratcliffe is quoted as saying in the press release. Ratcliffe owns other properties in the region, for example in Vopnafjörður, where he has made efforts toward conserving the unique nature of the area alongside residents and other landowners.

Holistic approach to conservation

The press release outlines conservation measures planned for the next five years, which include expanding the salmon spawning area by installing salmon ladders in Hafralónsá, Hofsá, and Miðfjarðará rivers in Vopnafjörður. Fertilised roe will also be released into the rivers, as well as into Selá, where Ratcliffe’s efforts are reportedly bearing fruit through a growing salmon population.

In collaboration with communities in the northeast, Ratcliffe is also working to combat soil erosion and improving the ecosystems surrounding salmon rivers, in part by supporting reforestation efforts. He is also conducting a long-term study of the wellbeing of Icelandic salmon in rivers and out at sea, in collaboration with the Marine and Freshwater Research Institute as well as local and international universities.

Foreigners’ land purchase a hot topic

Land purchase by foreigners has been in the public discourse lately, with many pointing out that Iceland’s regulations regarding the purchase of land by foreigners is more lax than in neighbouring countries. The Icelandic government is currently reviewing the existing legislation with the consideration of tightening requirements for land purchase.

Read more: Whose Land Is It Anyway?

Foreign Residents Increased by 5.8%

tourists in reykavík

There were 46,717 foreign citizens residing in Iceland as of July 1, 2019, and they have increased by around 2,561 since December 1, 2018, or 5.8%. During the same period, Icelandic citizens residing in Iceland increased by 0.4%. These numbers were recently published by Registers Iceland.

Most foreign citizens living in Iceland are from Poland, or 19,909 in total. Some 4,388 individuals have Lithuanian citizenship. Polish citizens residing in Iceland have increased by 3.7%, or 719 individuals, since last December 1, while Lithuanian citizens have increased by 7.2%, or 294 individuals during the same period.

Fifty Syrian Refugees to Settle in Northwest Iceland


Fifty Syrian refugees will be resettled in the Northwest Iceland towns of Blönduós and Hvammstangi, RÚV reports. Blönduós mayor Valdimar O. Hermannsson says that the town is still working on securing housing for the arriving residents, but that there is no doubt that they will be welcomed in their new home.

Both Blönduós and the district of Húnaþing vestri, where the village of Hvammstangi is located, received a request from the Ministry for Social Affairs to consider receiving Syrian refugees who have been living in camps in Lebanon. The mayor of Húnaþing vestri agreed to the request on behalf of the district before Christmas; roughly 200 people attended an informational meeting about the resettlement last week. Blönduós also agreed to the resettlement. The plan is for 25 people to be settled in each place around the end of April.

Blönduós mayor Valdimar O. Hermannsson says that most of the people who will be resettled in his town are families, most of which have one to three children. The next step, he says, will be to organize the new residents’ reception—to find ‘support families,’ to make school arrangements for the children, organize social services, and secure housing.

The population of Blönduós has grown rapidly of late, meaning that there is not much in the way of currently vacant housing, although there is a lot of housing construction underway. One option under consideration is to look to the nearby town of Skagaströnd. “There could be housing there and we share school and social services,” says Valdimar. “The biggest hurdle is finding housing in both the short and the long-term.”

Even with these challenges, however, Valdimar says he has no doubt that the new residents will be well-received. “There’s actually a big community of foreigners, such as Poles and others, who have lived here for varying lengths of time. It’s just a project we have to tackle and we have no doubt that residents will whole-heartedly support [that project].”

Iceland and UK Reach Withdrawal Agreement

Iceland and the UK have come to a reciprocal agreement which “protects the rights of our respective citizens in each other’s countries, based on the similar Withdrawal Agreement made with the EU.” So confirmed an announcement made by Michael Nevin, the British ambassador to Iceland, on the UK in Iceland Facebook page on Thursday.

The agreement, which also extends to citizens of Norway and Liechtenstein, ensures that British citizens currently living in Iceland – 1,591 people as of January 1, 2018 – can “go on living here” after the UK leaves the EU. It also guarantees that the over 15,000 nationals from Iceland, Norway and Liechtenstein who live in the UK will not be deported from their homes after Brexit.

“It means that UK and Icelandic citizens living in each other’s countries at the end of the implementation period in December 2020 will be able to continue on with their lives,” affirmed Nevin. Importantly, “[t]he agreement includes continuity arrangements on residency, healthcare, pensions and education, social security coordination and mutual recognition of defined professional qualifications. It will enable families who have built their lives together in the UK or Iceland to stay together.”

Nevin also emphasizes that “both the UK and Iceland governments have made commitments to each other’s citizens in the event of “no deal”. Citizens resident in our respective countries at the time of the UK’s departure from the EU will be able to continue living, working and studying here and in the UK as before.”

Although specific instructions regarding “administrative arrangements” for British citizens living in Iceland have yet to be finalised, the agreement undoubtedly will come as a relief to citizens on both sides who have been living in a state of limbo for some time.

“I hope that brings some certainty for your own future during a time of change,” writes Nevin. “The Iceland government is as keen as we are to not only ensure that you go on living here if you want to, but also to work as partners in trying to resolve any issues you still might have.”

Read the official statements on the Icelandic governmental website and on the UK governmental website.