Iceland company registration

DOING BUSINESS IN ICELAND IN 2021

pay fee by instalmentsbusiness setup without travel

Since 2003, Healy Consultants Group PLC 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.

Compare different Iceland entitiesWholly foreign owned LLCFast business setup solutionBitcoin miningBranch officeRepresentative office
Also known as:einkahlutafelageinkahlutafelageinkahlutafelagútibúfulltrúa skrifstofu
Best use of company?All products and servicesClose a customer deal nowMine bitcoin with energy cost efficiencySpecific projectsMarketing & research
How soon can you invoice Clients/sign sales contracts?1 month1 week1 month3 months3 months
How soon can you hire staff?2 months1 week2 months4 months4 months
How soon can you sign a lease agreement?1 week1 week1 week1 week1 week
How long to supply corporate bank a/c nos.?2 months1 week2 months4 months4 months
How long to supply co reg/tax numbers?1 month1 week1 month3 months3 months
Corporate tax rate on annual net profits?20%20%20%20%None
Limited liability entity?YesYesYesNoNo
Government grants available?YesYesYesYesNo
Government approval required for foreign owners?YesYesYesYesNo
EEA director/partner/manager/legal representative required?YesYesYesYesYes
Minimum paid-up share capital? (EUR)3,5003,5003,500NoneNone
Can bid for government contracts?YesYesNoNoNo
Corporate bank account location?Arion BankIslandsbankiArion BankLandsbankinn BankArion Bank
Can secure trade finance?YesYesYesYesNo
VAT payable on sales to local customers?YesYesYesYesNo
Average total business set up engagement costs? (EUR)16,950Request a proposal19,95016,950Request a proposal
Average total engagement period?2 months5 weeks2 months4 months4 months

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Accounting and tax considerationsWholly foreign owned LLCFast business setup solutionBitcoin miningBranch officeRepresentative office
Statutory corporate tax payable?20%20%20%20%None
Legally tax-exempt if properly structured?NoNoNoNoYes
Group HQ tax incentives?YesYesYesYesNo
Must file annual tax return?YesYesYesYesNo
Must file annual financial statements?YesYesYes
Must appoint an auditor?YesYesYesNoNo
Access to double taxation treaties?YesYesYesYesNo
Withholding tax on payments to foreign shareholders?20%20%20%0/20%None
Company registrationWholly foreign owned LLCFast business setup solutionBitcoin miningBranch officeRepresentative office
EEA director/partner/manager/legal representative required?YesYesYesYesYes
Minimum number of shareholders/partners?111Parent companyParent company
Minimum number of directors/managers?11111
Maximum shareholding for foreigners?100%100%100%100%100%
Minimum statutory paid-up share capital? (EUR)3,5003,5003,500NoneNone
Security deposit to be kept with government?NoNoNoNoNo
Shelf companies available?YesYesYesNoNo
Time to incorporate new entity?2 months5 weeks2 months4 months4 months
Can easily convert to a local PLC company?YesYesYesNoNo
Public register of shareholders and directors?NoNoNoNoNo
Can have preference shareholders?YesYesYesNoNo
Business considerationsWholly foreign owned LLCFast business setup solutionBitcoin miningBranch officeRepresentative office
Good entity for trademark registration?YesYesYesYesNo
Can secure an import and export licence?YesYesNoNoNo
Sponsorship by local citizen required?Yes, or an EEC citizen and resident unless exemption is granted by the Minister of Industry and Commerce
Our Client must travel to Iceland for business setup?No
Temporary physical office solutions available?No
You need a local resident as bank signatory?No
Can be wholly foreign-owned?
Entity will likely be regulated by?Ministry of Industries and Innovation
Minimum number of directors/managers1
Monthly VAT reporting to government?Yes
Must sign office lease agreement during incorporation?No
Shareholder/director docs to be attested/translated?Yes
Each foreign director needs personal income tax number?No
Foreign director needs residence visa?No
Maximum number of staff allowed?No limit
Expatriate-to-local staff ratio?None
Can secure residence visa for business owner?Yes
Other useful information
What will be included in my customer sales invoice?Click link
Country has signed free trade agreements?Yes
Country is a member of WIPO/TRIPS?Yes/Yes
Country is a member of the ICSID?Yes
Average custom duties?0-30%
Government foreign investment approval required?No, but there are restrictions in certain industries
Average monthly office rental? (EUR per sq m)212
Minimum statutory monthly salary? (EUR)2,250
Average monthly EUR salary for skilled employees? (EUR)4,300
EUR deposit interest rate? (1-year average)7%
Overseas remittance currency controls?No
Banking considerations
Multi-currency bank accounts available?Yes
Corporate visa debit cards available?Yes
Quality of e-banking platform?Excellent
Crowd funding available in this country?Yes

Iceland business setup summary

Press the link headings below to read detailed, relevant, up to date information.

  • Advantages of Iceland company registration

    business registration in Iceland

    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.

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Latest information as of 2021

Contact us

For additional information on our company registration services in Iceland, please contact our in-house country expert, Ms. Chrissi Zamora, directly:
client relationship officer - Chrissi
Government offices of Iceland Iceland Chamber of Commerce Iceland Ministry of Finance and Economic Affairs Iceland Ministry for Foreign Affairs Invest in Iceland The Central Bank of Iceland