Icelanders enjoy an excellent quality of life, with very high life expectancy - Icelandic women compete statistically with the Japanese for longevity, and men live long lives as well. The literacy rate is effectively 100 percent; there are more books sold per capita in Iceland than any other country.
The environment is clean - if widely divergent with its glaciers and geothermal pools - and pollution is not a problem. Per capita GDP is one of the highest in Europe, at about US$38,100.
Iceland is a republic that has been independent since 1918, with a parliamentary government and a written constitution. The president is elected by popular vote to a four-year term, with no term limit. Iceland was the first country to democratically elect a woman head of state, Vigdís Finnbogadóttir, who served four consecutive terms before deciding not to run for a fifth. The government itself, consisting of members elected every four years, holds most of the executive power.
The Parliament - called Althingi - is a legislative body of 63 members elected to four-year terms by popular vote. A cabinet is formed, after each election, by the leader of one of the political parties, typically the largest one.
The five major political parties are the Independence Party (the largest party, founded in 1929), Progressive Party, Alliance, Left-Green Movement, and the Liberal Party.
The economic crisis of the late 2000s led to a call for a revised Constitution. In an innovative bid, the draft presented to Parliament by the Constitutional Council implemented suggestions that were collected via social media.
Iceland was a founding member of United Nations in 1946, and joined NATO in 1949. In 1950 it joined the Council of Europe, and in 1952 the Nordic Council. Memberships in the General Agreement on Tariffs and Trade (GATT) and the European Free Trade Association (EFTA), in in 1964 and 1970, respectively. In 1993, Iceland became part of the European Economic Area (EEA).
Iceland's major exports are marine-related products, fishing industry equipment, and woolen items. The economy is effected by fluctuations in world fish prices. Although it has become somewhat more diversified in recent years, it is still heavily reliant on a strong fishing market. Tourism, computer software, biotechnology, and finance are some of Iceland's developing industries.
Hydroelectric and geothermal power, which fuel the country, are abundant enough to be exported; employment at power plants contribute to the nation's GDP. Iceland has announced a plan to replace fossil fuels with hydrogen by mid-century.
Rapid growth contributed to an accumulation of debt, the impact of which brought severe consequences during the recent global recession. Heavily dependent on foreign currency, Iceland's banks failed in late 2008. A period of double-digit unemployment, soaring inflation, and plummeting home prices followed. Recovering from the financial crisis, Iceland's economic growth has resumed, and unemployment fell to about 5.3% by the end of 2012.
What does Iceland hold for newcomers?
Iceland is a very homogeneous country, one that preserves and takes pride in its traditions. It also faces - and welcomes - growth in new industries that bring foreign businesspeople to the capital. Expatriates will find Iceland offers fascinating environmental features just outside the capital of Reykjavík, which is a mix of old character and new high-rise construction.
Perhaps the largest adjustment will be to the long days of darkness in winter and the similarly long days of sunlight in summer. Although quite welcome after the dark of winter, newcomers often find the long summer days difficult, as the near-constant sunshine interferes with normal sleep patterns.