Business entities in Iceland in 2023

Healy Consultants will assist our Client in selecting and setting up the optimum Icelandic corporate structure for Iceland business setup. There are several ways of doing business in Iceland and the most common is the limited liability company, known as an einkahlutafélag company. Foreign investors can also establish a public limited company, a branch of their foreign company or a representative office.

The Iceland limited liability company (LLC) – einkahlutafélag company

• An Iceland limited company can be set up with only i) 1 shareholder ii) 1 director and iii) a share capital of €3,500 (500,000 ISK). Shares may be paid for in kind, for example with equipment;
• 100% foreign ownership is allowed in all sectors for OECD and EEA residents, but is closed to outsiders for i) fish processing, ii) fishing, iii) energy production and iv) aviation;
• The Icelandic name for this type of company is einkahlutafélag, and is abbreviated to “ehf.”
• Iceland has relatively open regulations regarding residency requirements, as at least i) 1 shareholder and ii) 1 director must be residing in either Iceland, an EEA country or an OECD country. To assist our Clients to comply with these requirements, Healy Consultants will be pleased to offer nominee resident shareholder and/or director services;
• The Iceland LLC must also inform the local government of its registered address in Iceland to complete incorporation. After incorporation, it will be required to submit annual audited financial statements and must appoint for that purpose either i) one state authorized public accountant or ii) 2 auditors;
• For a high-risk business, Healy Consultants Group PLC annual professional passive nominee resident director and shareholder fees may be higher. For example, Bitcoin / Crypto-currency business or retail forex brokerage business etc. Before we sign an engagement letter, the exact annual fee will be agreed between our Client and Healy Consultants Group PLC.

The Iceland public limited company (PLC)

• Incorporation of an Iceland public limited company requires an minimum of i) 2 shareholders ii) 3 directors and iii) a share capital of at least €28,000 (4 million ISK). Half of this capital must be paid up within the company’s first year of existence;
• The Icelandic word for public company is “hlutafélag”, abbreviated to “hf.”
• Like an LLC, foreign ownership is only restricted for i) fish processing ii) fishing iii) energy and iv) aviation activities;
• Residency requirements are however tighter, as at least half of the i) shareholders and ii) Board of Directors must be residing in Iceland, an EEA country or an OECD country. If needed, Healy Consultants will be pleased to offer nominee resident shareholder and/or resident director services;
• The Iceland PLC must also provide the Icelandic government with a registered address in Iceland to complete incorporation. After incorporation, it will be required to submit annual audited financial statements and must appoint for that purpose either i) one state authorized public accountant or ii) 2 auditors.

The Iceland branch

Foreign companies can register their presence in Iceland through a branch. The branch will require a branch manager resident in Iceland and Healy Consultants can assist our Clients with complying with that requirement either by i) applying on their behalf for a work visa or ii) providing a local branch manager. Branches in Iceland are subject to the same standard audit requirements as for local companies.

The Iceland representative office

Iceland does not have a representative office scheme, so foreign businesses wishing to establish a non-commercial presence in the country must set up a branch or einkahlutafélag.

Table of comparison between Iceland business entities