Faroe Islands is ranked among the highest in the world based on GDP per capita and export is the foundation under the Faroese economy and society. The Faroe Islands have an open economy with multiple trade agreements with other countries and Faroe Islands export seafood to all six continents of the world.
The Faroese economy is relatively small and dependant on trade with other countries. The Faroe Islands are continuously seeking to improve trade with countries worldwide, while also insuring that rules and regulations for international trade are clear, concise and uniform.
Fisheries, and related industries, are the largest factor in the Faroese economy and are at the centre of Faroese export and trade. Fish and fish products account for between 90 and 95 percent of total export value, and around 20 percent of the GDP and 15 percent of the labour force is employed by the fishing industry.
Faroese fishing vessels fish for pelagic and demersal fish in both Faroese and foreign waters and the aquaculture industry is one of the most profitable in the world. Diversification and constant development have made Faroese fish a commodity worldwide and ensure that the industry will remain a major driver of the Faroese economy.
There are also several other important and promising industries in the Faroe Islands, some well-established and others still taking shape. These include financial services, petroleum related businesses, shipping, manufacturing (esp. servicing the maritime industries), civil aviation, IT and telecoms, creative industries and tourism.
The Faroe Islands have a well-established financial sector constituted by four banks, two insurance companies, two life insurance companies and some public funds. The Faroese banks are under the supervision of The Danish Financial Supervisory Authority. The currency of the Faroe Islands is the Faroese króna, issued by the Danish National Bank, and with the same value as the Danish Krone.
The Faroe Islands are, in principle, a free trader and have entered into a number of Free Trade Agreements, and agreements on fishing rights, with neighbouring countries, among them the European Union.
As a third country, in relation to the EU, the Faroe Islands have a fisheries agreement, as agreement on trade in goods and an agreement on research cooperation with the EU.
In 2006, the Faroe Islands entered into a special economic treaty with Iceland, called the Hoyvík Agreement. This agreement establishes a single economic area encompassing both countries, with free movement of goods, services, capital and persons.
The Faroe Islands also have bilateral free trade agreements with Norway, Switzerland and Turkey.
The Faroe Islands have an advantageous placement in the North Atlantic and have managed to create and maintain economic and trade networks with its neighbouring countries, as well as the EU. This work is on-going and the Faroese Government is currently looking into the possibility of obtaining membership of the World Trade Organisation.