Clothing manufacturer in Bangladesh for Icelandic brands

No duty on clothing, from anywhere

This is the fact that shapes everything else. Iceland abolished tariffs on clothing and footwear on 1 January 2016: the finance ministry announced in July 2015 that 324 tariff lines covering clothing and shoes would drop to 0% that year, and the customs notice for 1 January 2016 lists headings 6101 to 6117 and 6201 to 6217 at zero. The WTO’s tariff profile confirms it: Iceland’s average applied duty on clothing is 0.0%, with 100% of lines duty-free.

Two consequences follow, and we would rather state them than let a supplier imply otherwise. Bangladesh has no tariff advantage in Iceland, because there is no tariff to be advantaged against; a garment from Bangladesh, Portugal or China all enter at zero. And you do not need a preference certificate for apparel, though Iceland does operate a least-developed-country scheme under Regulation 119/2002 that grants Bangladesh duty-free access with a Form A certificate or an invoice declaration for consignments up to ISK 250,000, which would matter only if a tariff ever returned. What remains is the honest comparison: the price per piece, the quality standard, the minimum and the calendar.

24% VAT

Iceland has two VAT rates, 24% standard and 11% reduced. The reduced list covers food, books, accommodation, passenger transport and similar items; clothing is not on it, so garments carry 24% at import on the customs value and again at the till. Because there is no duty, the landed cost is the factory price plus freight, insurance and VAT, which makes an Icelandic landed-cost model unusually simple; our DDP quotes show each line.

Labels under the EEA

Iceland is an EEA member, so EU textile law applies through the agreement. The Consumer Agency, Neytendastofa, lists rules 220/2015 on the names and labelling of textile products as the implementation of Regulation (EU) No 1007/2011, which means the fibre composition must be given by percentage using the regulation’s fibre names. Whether Icelandic is mandatory on the label is something we could not verify from a primary source, so we do not assert it: the safe specification is fibre content and care information in Icelandic alongside English, which is what Icelandic retail generally carries and what removes the question. Country of origin is stated as Bangladesh. We prepare the artwork, ask your retailer to confirm the Icelandic wording, and hold it on file so reorders match.

• Fibre composition by percentage, using the EU fibre names
• Care instructions as symbols, with Icelandic and English text
• Country of origin: Bangladesh
• Your brand name and the importer’s details
• Size in the convention your customers expect

Getting goods to Reykjavík

No container line sails from Chattogram to Iceland. Cargo moves on a main-line service to a North Sea or Baltic port and transships onto one of the two Icelandic carriers. Eimskip’s Blue Line runs Grundartangi, Reykjavík, Rotterdam and Teesport with weekly departures, and its Yellow Line connects Reykjavík, Vestmannaeyjar, Tórshavn, Immingham, Fredrikstad and Aarhus. Samskip runs Rotterdam, Cuxhaven, Gothenburg, Halmstad, Aarhus, Runavík and Reykjavík with two vessels of about 900 TEU on a fortnightly rotation. Faxaflóahafnir, the Reykjavík port authority, handled 420,376 TEU of cargo in 2025. In practice that means adding a European transshipment leg to the roughly 22 to 30 days from Chattogram to the North Sea, and booking against a weekly sailing rather than a daily one. Air freight into Keflavík is the option for urgent drops.

Outdoor clothing, tourists and what sells

Iceland received about 2.27 million foreign passenger departures through Keflavík in 2025, with Americans the largest group at 662,000, then British at 229,000, Germans at 152,000 and Chinese at 128,000, staying 7.1 nights on average. That supports two kinds of clothing business: outdoor and technical wear sold to visitors and residents who need it, and souvenir and branded apparel sold in volume through tourist retail. Bangladesh is strong in the second and in the knitted layers beneath the first: tees, hoodies, fleece, base layers, caps and bags. Technical shells with taped seams are a different specialism, and the Icelandic brand 66°North states that it has operated its own factories since 1926 with the majority of production in Europe, which is a fair reminder that the premium end of this market is often made close to home.

Recycling fees: none on textiles yet

Iceland’s Recycling Fee Act 162/2002 sets fees for packaging, tyres, vehicles, fishing gear and hazardous substances; the current text contains no textile category, and the amendment bill presented in December 2025 does not add one. An Icelandic environmental consultancy reported in April 2025 that the EU agreed textile producer responsibility in February 2025 and that Iceland, Norway and Liechtenstein have twenty months to implement it, expected through the Recycling Fund. So there is no textile fee today and one is likely within the next few years; we record garment weights on every order file so the first declaration can be made from records.

Working with us from Iceland

For Iceland there is no duty to plan around and no preference paperwork for apparel, so the quote is the factory price, the freight, the insurance and the VAT, each as its own line. What we do add is the thing distance makes expensive to get wrong: a sealed sample, inspection reports with photographs before shipment, and a ship date the factory has committed to, because a missed weekly sailing costs a week.