Yes. No Icelandic law restricts VPN use, and companies, universities and remote workers use them every day. As a member of the European Economic Area, Iceland also applies the GDPR to how organisations handle personal data.

Iceland does block a few sites. In 2014 the Reykjavík District Court ordered two internet providers to block The Pirate Bay and a local torrent tracker at the request of the music rights group STEF, and in 2015 other providers agreed to block them too. A VPN can make a blocked address reachable for some people, yet copyright law applies to them all the same, so caution makes sense.

A VPN encrypts your connection and swaps your IP address for one from the location you choose. Our guide on what a VPN is explains the rest.