Setting up an Iceland cryptocurrency mining company in 2023
Since 2010, Iceland has been one of the world’s leading cryptocurrency mining hubs. Healy Consultants Group assists multinational Clients i) register a local Icelandic LLC to conduct cryptocurrency mining ii) open a local corporate bank account iii) secure suitable locations for a data mining farm and iv) establish contracts with reliable local electricity providers.
Why set up a cryptocurrency mining operation in Iceland?
- The powerful computers needed to mine bitcoins and other cryptocurrencies require huge amounts of electricity (in 2018, 90% of the power consumption of the country’s data centres was for cryptocurrency mining. Iceland has abundant supplies of electricity provided by geothermal sources, and electricity tariffs are low.
- The powerful computers which mine cryptocurrencies generate large amounts of heat. As a result, data centres run more efficiently in cool climates, like Iceland.
- The cryptocurrency mining industry in Iceland is unregulated. No licence is required, and there is no additional scrutiny given to an Icelandic data coin miner compared to any other type of activity.
- Although it offers no specific incentives to cryptocurrency mining firms, the Icelandic government currently welcomes investors to the country.
- The Icelandic Blockchain Foundation actively lobbies on behalf of the country’s cryptocurrency miners.
- Setting up an Icelandic company is simple if you know how. Healy Consultants Group’s team can assist with every step. It is normally possible for our Clients to sign a lease agreement within just one week of setting up the company, and open a corporate bank account and hire staff within 2 months.
- An Iceland cryptocurrency mining company suffers a tax on profits of 20%.
- Because Iceland is a popular location for bitcoin data centres, there is an established community of entrepreneurs and know-how in the country. A foreign-invested start-up can tap into established networks, recruit local experienced talent, and forge partnerships and collaborations with like-minded entrepreneurs.
- Because of the above, and because the mining industry is volatile, it is possible for start-ups to move into recently-vacated data centres, and possibly purchase almost-new equipment at discounted cost.
- Iceland has a long experience with cryptocurrency. Auroracoin is the ‘national’ cryptocurrency, and was established in response to the 2008 financial crisis. Another major player, Ripple, acquired a crypro-trading firm to move into Iceland.
- Because of the cryptocurrency boom in Iceland (Iceland currently accounts for 3% of the world’s mining activities), electricity demand is rocketing. There is a chance crypto-miners will face electricity shortages in future if Iceland fails to build new energy generating capacity to keep up with demand.
- In addition to the above, there is growing resistance to the industry from environmentalists who say building more power stations to cater to mining demand will damage the country’s landscapes. China has already started to crack down on mining activities, citing environmental concerns.
- The profitability of cryptocurrency farms in Iceland depends on ongoing government support for the sector. Because of the above factors, government policy could change, including the prospect of increased electricity tariffs.
- Bitcoin is a highly volatile commodity, and committing to the expense of setting up a mining farm is risky. Some of the ongoing risks are i) the bitcoin boom and bust cycle which has already seen many players enter and exit Iceland ii) high bitcoin transaction costs iii) new country regulations, as governments seek to clamp down on bitcoin payments made by terrorist organisations etc iv) fluctuating operating costs, making budgeting difficult and v) because it gets harder every day to mine bitcoin, more and more computing power will be needed, further escalating capital expenditure and running costs vi) as the price of bitcoin rises, more miners will flood the market.
- To set up a cryptocurrency mining operation in Iceland, multinational Clients should factor in i) the high cost of powerful computers ii) renting a suitable data farm iii) equipment installation fees and iv) sign up costs with a local utility provider. Clients should budget approximately US$100,000 for the same, and for set up to take approximately six months. The average time for breakeven is six months. Even if the market price of cryptocurrency rises, so does equipment prices. Rapid depreciation of assets (e g computers) is a constant problem.
- Although bitcoin is legal tender in Iceland, and can be used for buying goods and services, it is illegal to engage in foreign exchange trading with bitcoin.
Our fees to set up an Iceland cryptocurrency company amount to US$19,950.
Setting up an Iceland cryptocurrency company is easy and quick if you know how. Contact our team to find out how we can help.