Despite the isolated position of this advanced seafaring nation, the Faroe Islands have maintained close relations with the neighbouring Nordic countries, countries within the European Free Trade Association (EFTA), and the European Union (EU).
The islands are self-governing under the sovereignty of the Kingdom of Denmark. The foreign policy powers of the Faroe Islands are established in a treaty between the Faroe Islands and Denmark.
Unlike Denmark, the Faroe Islands have chosen not to be part of the EU. Trade is governed by special treaties of commerce negotiated by the Faroese authorities in consultation and cooperation with the Danish Ministry of Foreign Affairs. These treaties for the most part relate to trade and tariffs, taxation, fishery agreements, and the maritime environment.
You may read more about the history and politics in the booklet The Faroese Parliament and on the website of the Prime Minister's Office.
Read more about the Faroese business environment and the relationship between the Faroes and the EU.