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Company formation in Iceland
Comprehensive assistance in company formation, including banking services
How to form a company in Iceland
1
Document submission
You submit to us necessary documents of the future founders and directors for the purposes of company formation in Iceland
and opening a bank account in Iceland
and opening a bank account in Iceland
2
Payment of services
Payment of our services for company formation in Iceland
and/or bank account assistance in Iceland
and/or bank account assistance in Iceland
3
Company formation
We register a new company in Iceland for you. Upon completion of the registraion corporate documents are either delivered to you or submitted to a bank for the subsequent opening of a bank account
4
Bank account opening
In case you request an assistance with a bank account, we arrange an interview at the bank for you, inform you about the date of the visit and accompany you on your way to the bank. After the bank account is opened and active you receive corporate documents of the formed company as well as the access to the bank account
Key aspects to consider prior to incorporating a company in Iceland
Remote company formation in Iceland is available.
1. Founders that would like to register a company in Iceland can either be resident or non-resident in Iceland. Founders can be either individuals or legal entities.
2. A resident or a non-resident individual can be a company director in Iceland. However, it is required to set up a company in Iceland with an Iceland resident individual or an OECD resident individual as one of its directors.
3. One individual can register a company in Iceland and simultaneously be a shareholder and a director in this company if such company is registered as a ehf(a limited liability company).
4. There is no requirement for creating substance in Iceland - no need to hire local employees or rent an office in order to establish a company in Iceland or to conduct business in Iceland.
5. Minimum share capital that is required to register a company in Iceland as a ehf (a limited liability company) is ISK 500,000.
6. Information about company founders, shareholders and directors after company registration in Iceland is complete is publicly available in the state corporate register.
7. We can help you register a company in Iceland remotely, on the basis of a power of attorney. It is necessary for the director of the new company to travel to Reykjavík for 1 day in order to open a corporate bank account.
2. A resident or a non-resident individual can be a company director in Iceland. However, it is required to set up a company in Iceland with an Iceland resident individual or an OECD resident individual as one of its directors.
3. One individual can register a company in Iceland and simultaneously be a shareholder and a director in this company if such company is registered as a ehf(a limited liability company).
4. There is no requirement for creating substance in Iceland - no need to hire local employees or rent an office in order to establish a company in Iceland or to conduct business in Iceland.
5. Minimum share capital that is required to register a company in Iceland as a ehf (a limited liability company) is ISK 500,000.
6. Information about company founders, shareholders and directors after company registration in Iceland is complete is publicly available in the state corporate register.
7. We can help you register a company in Iceland remotely, on the basis of a power of attorney. It is necessary for the director of the new company to travel to Reykjavík for 1 day in order to open a corporate bank account.
Cost of services
Formation of a Ehf
Timeframe - 12 business days
Timeframe - 12 business days
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for company formation
Advantages of forming a company in Iceland
Attractive business-environment
- Access to majors EU markets
- Access to the North Atlantic Ocean and to the Arctic Ocean allows to establish a maritime trade
- Open economy
- Highly-qualified workforce
- Low inflation rate
Stability and security
- Political stability
- Secure legal and justice systems
- Comprehensive protection of property rights
- Comprehensive personal security
- Investment protection
Tax benefits
- Corporate income tax incentive for innovation enterprises
- Corporate income tax incentive for intial investment
- Temporary reimbursements in respect of filmmaking in Iceland
- Temporary reimbursements in respect of music recording in Iceland
- Multiple double tax treaties
No strict foreign exchange controls
- Although foreign exchange controls are established in Iceland, individuals and business entities, either resident or non-resident in Iceland may open bank accounts in local banks in any currency
Ease of establishing and doing business
- 100% foreign ownership of a company is available
- Remote company formation in Iceland is available
More about Iceland
Iceland is a Nordic island country located in the North Atlantic Ocean and in the Arctic Ocean. Iceland has a territory of 102,775 square kilometers. Iceland has access to the North Atlantic Ocean and to the Arctic Ocean. The nearest neighbors of Iceland are Greenland, Norway and the United Kingdom. The capital city of Iceland is Reykjavík, the largest city and the location of key government institutions.
Iceland has a population of 376,250 people.
Iceland has a population of 376,250 people.
Official currency of Iceland is Icelandic króna (ISK).
Iceland has a mixed economy with high volumes of free trade and government regulation. Hydropower and geothermal power is the primary source of electrical energy in the country. The presence of abundant electrical power due to Iceland's geothermal and hydroelectric energy sources has led to the growth of the manufacturing sector. Power-intensive industries, which are the largest components of the manufacturing sector, produce mainly for export. Aluminium smelting is the most important power-intensive industry in Iceland. Iceland is the second biggest fisheries nation in the North East Atlantic behind Norway. Iceland's economy is highly export-driven. Tourism is Iceland's largest export sector. Iceland is one of the most tourism dependent countries in the world. Iceland's economy has been diversifying into manufacturing and service industries in the last decade, including software production, biotechnology and finance.
The GDP of Iceland grew by 4.4% in 2021 and amounted to USD 25.5 billion. Tertiary sector makes up 66% of the GDP of the country, followed by industry sector at 20%, agriculture at 3.7%.
In terms of foreign trade the largest exports of the country are marine products aluminium, ferro-silicon alloys, machinery and electronic equipment for the fishing industry, software, woollen goods.
Imports of Iceland consist of oil, natural gas, petroleum products, cement, machinery and equipment, cars and vehicles, electrical equipment, consumer goods, food products, textiles, fishing vessels.
Primary trading partners of Iceland are Netherlands, Spain, France, Norway, Denmark, Sweden, Estonia, Germany, United Kingdom, Netherlands, Poland, Italy, USA, China and Brazil.
Iceland has a mixed economy with high volumes of free trade and government regulation. Hydropower and geothermal power is the primary source of electrical energy in the country. The presence of abundant electrical power due to Iceland's geothermal and hydroelectric energy sources has led to the growth of the manufacturing sector. Power-intensive industries, which are the largest components of the manufacturing sector, produce mainly for export. Aluminium smelting is the most important power-intensive industry in Iceland. Iceland is the second biggest fisheries nation in the North East Atlantic behind Norway. Iceland's economy is highly export-driven. Tourism is Iceland's largest export sector. Iceland is one of the most tourism dependent countries in the world. Iceland's economy has been diversifying into manufacturing and service industries in the last decade, including software production, biotechnology and finance.
The GDP of Iceland grew by 4.4% in 2021 and amounted to USD 25.5 billion. Tertiary sector makes up 66% of the GDP of the country, followed by industry sector at 20%, agriculture at 3.7%.
In terms of foreign trade the largest exports of the country are marine products aluminium, ferro-silicon alloys, machinery and electronic equipment for the fishing industry, software, woollen goods.
Imports of Iceland consist of oil, natural gas, petroleum products, cement, machinery and equipment, cars and vehicles, electrical equipment, consumer goods, food products, textiles, fishing vessels.
Primary trading partners of Iceland are Netherlands, Spain, France, Norway, Denmark, Sweden, Estonia, Germany, United Kingdom, Netherlands, Poland, Italy, USA, China and Brazil.
International business expands to Iceland and incorporates a company in Iceland primarily for:
Restricted for foreign entrepreneurs are the following sectors:
- renewable energy
- wholesale and retail trade
- data centers
- biotechnology
- carbon fiber
- algae culture
- greenhouses
- fish farming
- life sciences
- polysilicon
- IT
- real estate
- tourism.
Restricted for foreign entrepreneurs are the following sectors:
- defense industry
- television
- telecommunications and radio
- air transport
- postal services.
- Corporate income tax - Standard tax rate 20%. Tax returns are filed on an annual basis. Advance income tax payments are made on a monthly basis
- Dividend withholding tax - 20% when the recipient is a company, 22% when the recipient is an individual
- Interest withholding tax - 12%
- Royalties withholding tax - 20% when the recipient is a company, 22% when the recipient is an individual
- Capital gains tax - Standard tax rate 20%
- VAT - Standard tax rate 24% or reduced tax rates from 0% up to 11% or tax exempt. Tax returns are filed on a weekly, a bimonthly, a monthly, a biannual or an annual basis
- Personal income tax - from 31.45% up to 46.25%.
Apart from such traditional business entity types as a private limited company (einkahlutafélag - ehf) and a public limited company (hlutafélag - hf), corporate law in Iceland offers to establish a business as:
1. General partnership (smeignarfélög - sf)
2. Limited partnership (samlagsfélög, slf)
3. Partnership limited by shares (samlagshlutafélög, slhf)
4. Cooperative company (samvinnufélög - svf)
5. Branch office (útibú)
To receive a detailed description of the company formation procedure in Iceland and information about documents necessary for company formation in Iceland please contact our experts.
1. General partnership (smeignarfélög - sf)
2. Limited partnership (samlagsfélög, slf)
3. Partnership limited by shares (samlagshlutafélög, slhf)
4. Cooperative company (samvinnufélög - svf)
5. Branch office (útibú)
To receive a detailed description of the company formation procedure in Iceland and information about documents necessary for company formation in Iceland please contact our experts.
Send a request for company formation in Iceland
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London, EC1V 2NX
Phone: +44 20 8157 4037
Email: request@pil-services.com
