Company Registration in Iceland - Business Starting & Setup

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Service packages
Express
Standard
Optimum
Company registration
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Legal address per year
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Secretarial services for the first year
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Fees and duties for the first year
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Apostilled bound set of incorporation documents
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Compliance fee
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Nominee service per year
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Bank Account Pre-approval
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Price
6 000 USD

6 000 USD

6 500 USD

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Core Services

— Incorporation

Price6 000 USD

including incorporation tax, state registry fee, including Compliance fee

— Annual government fees

PriceIncluded

Stamp Duty and Registrar of Enterprises incorporation fee

— Corporate legal services

Price2 000 USD

including registered address and registered agent, NOT including Compliance fee

—Delivery of documents by courier mail

Price150 USD

DHL or TNT, at cost of a Courier Service

— Apostilled set of Statutory documents

Price500 USD

Basic set of documents

Certificate of Incorporation

Founding documents

Compare Jurisdictions

    Nominee Director

    PriceNo

    Paid-up “nominee director” set includes the following documents

    Nominee Shareholder

    PriceNo

    Paid-up “nominee shareholder” set includes the following documents

    Compliance fee

    Compliance fee is payable in the cases of: renewal of a company, liquidation of a company, transfer out of a company, issue of a power of attorney to a new attorney, change of director / shareholder / BO (except the change to a nominee director / shareholder)

    Basic

    Price150 USD

    simple company structure with only 1 physical person

    For legal entity in structure under GSL administration

    Price50 USD

    additional compliance fee for legal entity in structure under GSL administration (per 1 entity)

    For legal entity in structure not under GSL administration

    Price100 USD

    additional compliance fee for legal entity in structure NOT under GSL administration (per 1 entity)

    For client with high risk Status

    Price350 USD

    General information

    General info

    Iceland is a Nordic European island country in the North Atlantic Ocean.

    Total area of the country is 103.125 sq. km. The population is 356.991 people (2019). Among ethnic groups are Icelandic (93.44%), Polish (2.83%), and others (3.73%).

    The capital is Reykjavik.

    The official language is Icelandic.

    The currency is Icelandic krona (ISK). 1 USD is equal to 134.05 ISK (2022).

    Climate of Iceland is temperate; moderated by North Atlantic Current; mild, windy winters; damp, cool summers; avg. maximum temperature (July) +12°; avg. minimum temperature (January) -1°

    Iceland is one of the world’s most volcanically and geologically active countries.

    Time difference with Moscow is -3 hours.

    Literacy rate is 99%.

    Calling code is +354.

    History

    Inhabited by Norwegian and Celtic (Scottish and Irish) immigrants during the late 9th and 10th centuries A.D., Iceland boasts the world’s oldest functioning legislative assembly, the Althing, established in 930. Independent for over 300 years, Iceland was subsequently ruled by Norway and Denmark. Fallout from the Askja volcano of 1875 devastated the Icelandic economy and caused widespread famine. Over the next quarter century, 20% of the island’s population emigrated, mostly to Canada and the US. Limited home rule from Denmark was granted in 1874 and complete independence attained in 1944. Iceland became a member of NATO on 30 March 1949. Among NATO members, Iceland is the only one with no standing army.

    Industrialization of the fisheries and aid from the Marshall Plan brought prosperity in the years after World War II. The economy diversified greatly after the country joined the European Economic Area in 1994. Iceland began accession negotiations with the EU in July 2010; however, public support has dropped substantially because of concern about losing control over fishing resources and in reaction to worries over the ongoing Eurozone crisis.

    Government Type

    Iceland is a parliamentary republic.

    The head of state is the President of Iceland, whose powers are limited to ceremonial functions. The president is elected to a four-year term by universal adult suffrage. The constitution does not limit the number of terms the president is allowed to serve.

    Executive power is represented by the Government, headed by the prime minister. The prime minister is appointed by the president after general elections to Althing along with the cabinet. However, this process is usually conducted by the leaders of the political parties who decide among themselves after discussions which parties can form the cabinet and how its seats are to be distributed (under the condition that it has a majority support in Althing).

    Legislative power is vested in the modern parliament, called "Althing", founded in 1845 as an advisory body to the Danish king. The Althing is composed of 63 members, elected by popular vote every 4 years unless it is dissolved sooner. Members of the Althing are elected on the basis of proportional representation from six constituencies.

    Judiciary power consists of the Supreme Court, also acting as Constitutional Court, and eight district courts. The judicial system of Iceland is very similar to that of Norway.

    Economy

    Until the 20th century, Iceland was among the poorest countries in Western Europe. Currently, it remains one of the most developed countries in the world. For a long time Iceland was a country of a monocultural economy and the main sources of income were fishery and fish-processing. However, over the last years state economy has developed intensively and involved new sectors. For example, the powerful incentive was given to a development of renewable ecological energy. The tourism sector is expanding, especially in ecotourism and whale-watching. On average, Iceland receives around 1.1 million visitors annually, which is more than three times the native population. Iceland’s agriculture industry, accounting for 5.4% of GDP, consists mainly of potatoes, green vegetables (in greenhouses), mutton and dairy products.

    In the years 2003-2007, following the privatization of the banking sector, Iceland moved from being a nation best known for its fishing industry toward having an economy based on financial services and investment banking. Besides that, the Government declares a program of launching and development of aluminum factories. Among other increasingly developing sectors are biotechnologies and IT sector.

    It was quickly becoming one of the most prosperous countries in the world before getting hit hard by a major financial crisis. The crisis resulted in the greatest migration from Iceland since 1887, inflation escalation, growth of unemployment, decline in GDP, and krona’s fall. By 2012 Iceland’s economy has stabilized following currency controls and cutbacks in government services, although full economic recovery remains a long-term concern.

    Corporate information

    Legal System

    Iceland has a civil law legal system and thus Icelandic law is characterized by written law.

    Major sources of law in Iceland include the Constitution, statutory legislation, and regulatory statutes. Other legal resources are precedent and customary law.

    Types of Entity

    The principal forms of business organization in Iceland are:

    • Sole Proprietorship;
    • Partnership;
    • Cooperative Society;
    • Private Limited Company;
    • Public Limited Company;
    • Branch of a Foreign Company.

    The most common structure is the Private Limited Company.

    Registration

    Company Name

    There is a range of requirements to the company name in Iceland:

    • all company names must end with the following words or their abbreviated forms: "einkahlutafélag" (Private Limited Company) or the abbreviation "ehf".;
    • it should not be identical to or too similar to a name already appearing on the register of companies;
    • it shall be in conformity with the Icelandic linguistic system;
    • it cannot include a family name;
    • it should not be misleading or give wrong information, such as implying an operation that is not included in the company´s purpose;
    • it cannot be too general, such as “Bank” or “Architect” unless a more specific name accompanies it;
    • it cannot include the name of another person or another person´s property;
    • it should not contain the following words: bank, savings, loans, insurance, assurance, reinsurance, fund management, investment fund, trust, trustees, Chamber of Commerce, municipal or their foreign language equivalents or any name in English or a foreign language that may suggest association with the banking or insurance industries.

    Registration

    The following steps are required to incorporate a private limited company in Iceland:

    1. Search for company name online: The company name database can be accessed at the Internal Revenue Web site.

    2. Deposit initial capital in bank account: The initial capital can be deposited in any commercial bank.

    3. Apply for registration with Register of Limited Companies (Director of Internal Revenue): To apply for registration with the Register of Limited Companies, the company must provide five documents:

    • Notification of incorporation form;
    • Agreement of incorporation;
    • Record of the meeting of incorporation;
    • Articles of association;
    • Affidavit on payment of share capital, issued by a certified public account.

    The register is also in charge of advertising the incorporation notice in the Official Gazette, the official journal. The total registration fee is ISK 130 500, which includes the company identification number (ISK 5 000), and the fee for publishing the notification in the Official Gazette (ISK 1 000 including VAT). Model incorporation documents and forms (in Icelandic) can be found on the Ministry of Industry and Innovation. The notification of incorporation form can be downloaded at no cost from the Internal Revenue Office Web site Signed documents can be sent via email to the Register of Limited Companies (Director of Internal Revenue).

    4. Obtain VAT number from Director of Taxes: Companies that plan to sell goods or services valued at more than ISK 1 000 000 a year are required to collect and report VAT.

    5. Notify tax authorities of employment of workers: The notification can be filed through http://www.skattur.is with a web key.

    Upon the receipt of the required documents the formation of a new company in Iceland takes 5-7 days.

    Restrictions on Activities and Foreign Investment

    Special permission is required for banking, insurance, and financial services.

    Non-residents may invest in business enterprises in Iceland with some limitations, which are stipulated in the Act no. 34/1991 on Investment by Non-Residents in Business Enterprise or in specific legislation, and upon the fulfillment of other conditions and acquisition of licenses required by law. Under the European Economic Area Agreement, investment in Iceland by EEA residents is in principle unrestricted, but few exceptions were negotiated in specific fields considered to be of national political importance.

    Non-Residents (including EEA Residents) cannot conduct fishing operations within the Icelandic fisheries jurisdiction or own or run enterprises engaged in fish processing. Besides, only Icelandic citizens and other Icelandic entities, as well as individuals and legal entities domiciled in another member state of the European Economic Area, are permitted to own energy exploitation rights relating to waterfalls and geothermal energy for other than domestic use. The same applies to enterprises, which produce or distribute energy.

    Local Registered Office

    An Icelandic company must have a registered office in Iceland.

    Register of shares must be kept at the registered office at all times.

    Seal

    Company seal is not required.

    Redomiciliation

    The redomiciliation of companies to or from Iceland is not permitted.

    Dissolution

    The dissolution of a private limited liability company is prescribed in detail in the relevant Acts. Shareholders controlling a minimum of two-third of a company's total share capital can take a decision at a shareholders' meeting to the effect that the company shall be dissolved. The private dissolution requires the appointment of a special winding up committee, which publishes a call to creditors in the Legal Gazette.

    Special rules apply for the dissolution of financial undertakings as defined in the Act respecting Financial Undertakings No 161/2002.

    Company structure

    Directors

    The Board of Directors of a Private Limited Company in Iceland shall consist of at least three persons, unless there be four or fewer shareholders, then it is sufficient that the Board consist of one or two persons.

    Directors should be natural persons.

    At least half of the Directors shall be resident in Iceland. In case of one Director the condition of residence applies to him and it also applies to one out of two Directors. The Minister or he to whom he conveys his power may grant an exemption from the condition. Condition of residence does, however, not apply to the citizens of the States being parties to the Agreement on the European Economic Area, provided that the citizens concerned be resident in an EEA State.

    The Board of Directors should be elected by a shareholders’ meeting.

    It is possible to hold Board of Directors' meetings with the assistance of electronic media as far as this is in conformity with the implementation of the tasks of the Company's Board of Directors.

    Secretary

    Icelandic private limited company is not required to have a company secretary.

    Shareholders

    Each Icelandic company should have at least one shareholder. A single party may establish a private limited company and be a shareholder. In such instances a single principal may constitute the board of directors and then there is no need for holding board or shareholder meetings as is else the case. At least one of the founders must reside in Iceland or be both a citizen and resident of an EEA or OECD country.

    The identity of the founder or founders of a private limited company; the identity of shareholders that own more than 10% of total shares in a private limited company; and if all the shares in a private limited company are transferred to a single shareholder, the identity of that shareholder must be disclosed to the Registry.

    An Annual General Meeting shall be held as Company Articles of Association determine, but yet no less than once a year and never later than eight months as of the end of each fiscal year. Annual accounts and Auditors´ or Inspectors´ report shall be submitted at an Annual General Meeting.

    A shareholders´ meeting shall be held at a Company´s domicile, unless Company Articles of Association stipulate that a meeting shall or may be held at another place. It is permissible to hold a shareholders´ meeting elsewhere if that is necessary due to specific reasons.

    A shareholders´ meeting may decide that a shareholders´ meeting will be held electronically only.

    Beneficiary

    Despite the fact that many jurisdictions are discussing an issue of introducing an open register of beneficiaries, there is no such a register yet, including Iceland. This means that beneficiaries’ details do not appear on a public profile. Generally, service providers including firm specializing in company formation, trust managers, lawyers, and accountants, keep beneficiaries’ information in strict confidentiality. It can only be disclosed to regulatory authorities (e.g. during examinations for its existence) or in compliance with a court order.

    Share Capital and Shares

    Share capital of an Icelandic company should be denominated in Icelandic kronas. A private limited company must have an initial capital of ISK 500 000, which has to be paid before registration. In case of failing to pay the capital, the company will not be registered.

    Standard amount of the share capital is ISK 500 000.

    Private limited company may issue share certificates. Each company should keep at its registered office a register of shares and all shareholders and the authorities should have access thereto and may acquaint themselves with the contents thereof.

    Bearer shares and shares with no par value are not allowed.

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