Does Iceland have many foreign residents? What are the wages and working conditions like for foreign workers?

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Yes, Iceland has a significant number of foreign residents. The latest figures from Statistics Iceland show that immigrants comprise around 18% of the total population of Iceland.

The Icelandic economy has grown quickly in the years following the 2008 banking collapse, largely driven by the tourism industry. However, given Iceland’s small population pool, the recent economic expansion is largely dependent on foreign labour.

Of Icelanders with a foreign background, Poles make up by far the largest group. As of 2022, some 20,896 were living in Iceland, or 34.2% of the total immigrant population. The second- and third-largest groups are comprised of people from Lithuania and Romania respectively.

Employment opportunities mean that Iceland's immigrant population is largely clustered around the capital region, though residents with a foreign background also make up a notable part of the Westfjords. One of the least-populated regions of Iceland, tour-related services have become a large part of this region's economy.

Though Iceland is an attractive destination for many, there are also realities to immigration.

For example, a 2018 study by the University of Akureyri found while the average monthly salary in that year for full-time workers was 721,000 ISK [$5,168; €4,727], 60% of immigrants made only 400,000 ISK [$2,866; €2,623] or less per month.

Besides statistics, there is of course also a subjective element to the immigrant experience. Iceland is a small community with a unique language. For some, this is a major attraction to life in Iceland, but for others, it can be alienating. Some may also find themselves working largely English-based jobs in the tourism and service sector, and never truly integrating to Icelandic society.

Unfortunately, there have also been increasing incidents of wage theft, in which employers withhold earnings from workers who may not be in a position to press their rights. Read about the rights of workers here, in English.

This is of course a large issue with many facets. Read our coverage of social issues, and check out our coverage of Iceland's largest immigrant population below.

Prospective immigrants to Iceland may also find this Ask Iceland Review helpful: How can I move to Iceland?


New Film Casts Iceland’s Polish Community in New Light

Wolka arrives in Icelandic theatres today, RÚV reports. The Polish-Icelandic production made its debut at this year’s Reykjavík International Film Festival and is the last film made by director Árni Ólafur Ásgeirsson, who died last spring at the age of 49, just three months after being diagnosed with cancer.

Wolka tells the story of a Polish woman who has just finished a 15-year sentence in prison for murder. For reasons known only to herself, she breaks parole and travels to Iceland in search of a woman.

The film, Árni Ólafur’s fourth, was in the works for some time—almost a decade, in fact. Árni Ólafur, who was married to Polish set designer Marta Luiza Macuga, had lived in Poland and wanted to make a movie about Polish society in Iceland. After moving back to Iceland, he met screenwriter Michal Godzic. They began working on the script together and nine years later, the film is finally ready for audiences.

In addition to its debut at RIFF, a special screening of Wolka was also held in the Westman Islands. “It was certainly emotional for my son and I,” said Marta. “It was so strange to be there without Árni. I don’t think I’ll ever go back to the Westmans. Wherever I went, I felt like Árni should be there with us. It was easier here in Reykjavík, the team was with me so it was more bearable. I could enjoy it more and celebrate the movie coming out. It’s done and people will appreciate it.”

Olga Bołądź, one of Poland’s most prominent film stars, played the leading role of Anna. “I met Árni Ólafur in Poland,” she recalled. “He called and asked if I wanted to play Anna. I read the script and fell for it, it was such a beautiful role that offered up so many possibilities. I said yes—yes, thank you. He was one of the most remarkable directors I’ve ever worked with.”

Filming in the Westmans during the winter was difficult, Olga noted, but she recalled it positively. “It was hard because of the weather, it was freezing. But Iceland is such a beautiful country and the people friendly and showed me such kindness, especially the Poles because everywhere I went, I met Poles. They were really proud that there was a film being made about Poles who live in Iceland. I hope that they’ll like it.”

Olga believes that Wolka is a story that will have a broad appeal. “The film is part mystery and part adventure, but it is also a family drama. I think that everyone can relate to family drama.” And while the story may have particular significance for Poles living in Iceland, Olga believes that it will expand people’s notions about this community. “The story is certainly about Polish society [in Iceland], but it shows it in a new light. Árni wanted to show that Poles are not just a labour force, but also people with feelings, who laugh and cry. We are normal people like all other nations.”

An earlier version of the article falsely stated that Árni passed away last year. 

More Immigrants Needed In Iceland

Approximately 10.6% of the Icelandic population are immigrants, most of whom come from Poland. Polish authorities have recently begun to ask residents living abroad to return to their home country, due to an increasing need for working hands.

RÚV asked Halldór Benjamín Þorbergsson, CEO of SA-Business Iceland, about the importance of foreign workers, such as Poles, to the Icelandic economy. According to Halldór, foreign workers are a necessary part of the economy. SA-Business recently estimated that by 2040 approximately 20% of the nation will consist of immigrants, which, according to him, is very positive.

In order to keep up the GDP growth, it is necessary for Iceland to have more people living there and working. According to Halldór, it is of vital importance to help immigrants learn Icelandic, in order to prevent them from becoming isolated.

“We need to make an effort to bring more people to the country to work. At the same time, we need to ensure that it’s desirable to work here and that people can feel like they’re doing something important. This is why it’s highly important for us to accommodate foreign workers and help them be a part of the Icelandic community.”