The European Private Equity and Venture Capital Association (EVCA) recently rated 21 countries on the tax and legal environments that they offer for private equity and venture capital industries. Measured against the same standards, Iceland would place just behind Britain as the best place to invest in Europe.

The EVCA used 13 equally-weighted criteria, some with multiple factors, to compile the list. Each of these was assigned a value of one (for very favorable) through three (unfavorable), and the list was averaged. When Iceland's score was calculated strictly according to the EVCA's method, it received an overall average of 1.38. This indicates that Iceland presents an exceptionally friendly economic environment for foreign investors, missing the UK's score by a mere 0.12 points.

Welcoming equity fund and venture capital markets, however, are just two of the many reasons why Iceland is becoming increasingly attractive to foreign investors and businesses. The country is blessed with endless geothermal energy and one of the most unpolluted environments on earth. It is ranked in the top two internationally for quality of life, competitiveness, and levels of transparency, and has made the top ten on dozens of other world-ranking and financial indices.

The Icelandic government has also done its part, taking aggressive measures to ensure that it remains as inviting to foreign investment as possible. It maintains a simplified tax system and has written into law one of the lowest corporate income taxes in Europe. There are also special provisions in place for European Economic Area (EEA) member states and for returns on film production costs in Iceland, among other benefit programs.

The , [Invest in Iceland Agency maintains a thorough web site that outlines venture opportunities, tax codes, and gives detailed comparisons of the advantages that Iceland offers financiers relative to other world markets.