Since 2003, Healy Consultants Group assists our Clients with business set up in Iceland. Our services include i) Iceland company incorporation ii) securing government licences iii) business bank account opening iv) employee recruitment v) visa strategies and vi) office rental solutions.

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Iceland business setup summary

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• Advantages of Iceland company registration

  

  1. Iceland is a straightforward country in which to set up a business. For example:
     • An Iceland LLC can be 100% foreign-owned and operated by residents of OECD and European Economic Area (EEA) countries.
     • An Iceland LLC requires a minimum share capital of only 500,000 ISK (€3,500).
     • Company registration is normally completed in just five days.
  2. Iceland is a straightforward country in which to do business. For example:
     • An Iceland company suffers a corporate tax of just 20%.
     • Annual financial reporting is simple.
     • It has very low levels of corruption;
     • Business laws and procedures are normally clear and simple;
     • Government departments are typically efficient.
     • English is widely spoken in government departments, banks and throughout the business community.
     • Foreign investments are well protected, including intellectual property, and contacts are enforced. Foreign investors can expect fair treatment in Icelandic courts.
  3. Iceland is one of the world’s most competitive economies. For example:
     • The country’s wide double tax treaty network of more than 50 countries, including France, Greece, Cayman Islands, Isle of Man, Switzerland, and the USA, helps reduce tax exposure of Iceland LLCs conducting global trade;
     • Iceland is a member of the European Free Trade Association (EFTA) (part of the European Single Market) and the Schengen area. Companies in Iceland therefore have tariff-free access to these massive trading blocs, with a collective consumer market of almost half a billion people.
     • Iceland has a skilled labour force. Almost half of the country’s population has completed tertiary education.
     • Recruitment procedures are clear, and labour laws are fair to both employer and employee. To assist Icelandic companies to attract foreign talent, the government offers personal income tax breaks.
     • The employment rate is far above the OECD average. Unemployment is one of the lowest in the OECD.
     • Almost every Icelander can speak some English. In the working population, and among young people, English is spoken fluently.
     • The country is located almost mid-way between North America and Europe. The capital city, Reykjavik, is five hours from New York, and three hours from London. The time zone is convenient for businesspeople working with Clients in North America and Europe.
  4. Iceland has a vibrant, close-knit start up culture perfect for collaboration and for testing new products before they go to a bigger market. For example:
     • Iceland now has four private venture capital funds;
     • The government’s Technology Development Fund (TDF) provides up to US$500,000 early-stage funding for tech start-ups.
  5. Iceland has some of Europe’s fastest internet speeds.
  6. While small, the domestic consumer market is powerful. Per capita income is high and Icelanders have a reputation for spending on consumer goods.

• Disadvantages of Iceland company registration

  1. The 2008 crash of Iceland’s economy, stock market and financial system destroyed the country’s global image as a stable, profitable place to do business. The country continues to work hard to restore credibility in the eyes of the global investment community. Iceland’s sovereign credit ratings are stable, though the kroner currency continues to weaken against the euro.
  2. Iceland’s economy and domestic market is small and lacks diversity. The main sectors are i) aluminium smelting ii) fisheries iii) power generation (geothermal and hydroelectric) iv) medical and pharma and v) tourism and vi) cryptocurrency.
  3. There are skills shortages in sectors such as healthcare, construction, IT and tourism. Recruitment can be difficult for companies looking to fill specialist roles, particularly foreign talent.
  4. 100% foreign ownership is banned for non-resident entrepreneurs using an Iceland company to conduct i) fishing ii) fish processing iii) energy production and iv) aviation activities.
  5. Because the country is geographically remote, start-ups can feel isolated from global trends. Entrepreneurs may have to spend significant time travelling.
  6. Iceland is a very expensive place in which to do business. For example:
     • Most raw materials and goods must be imported;
     • The average monthly salary is US$3,100, one of the highest in Europe. Specialist positions command salaries many times this amount. The minimum monthly wage is US$2,700.
     • The country has Europe’s second-highest living costs, after Switzerland.
     • Grade A office space in central Reykjavik
  7. Opening a global corporate bank account for an Icelandic company is challenging.
  8. Iceland is prone to natural disasters such as earthquakes and volcanic eruptions which can disrupt business, including transport and logistics networks.
  9. Reclaiming the 18% dividend withholding tax is complex, as it requires the completion of an Iceland tax return. This delays the receipt of the withheld funds by a year.