Iceland is part of the European Single Market by virtue of being in the European Economic Area.
The European Economic Area ( EEA ) is the area in which the Agreement on the EEA provides for the free movement of persons , goods , services and capital within the European Single Market , as well as the freedom to choose residence in any country within this area . Iceland . In 1994 , it became a part of the European Economic Area , which further diversified the economy into sectors such as finance , biotechnology , and manufacturing .