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Iceland

Steps to Set Up a Company:

Iceland

Choose a Business Structure

  1. Sole Proprietorship (Einstaklingsfyrirtæki): Single owner, full liability.
  2. General Partnership (Sameignarfélag - SF): Two or more partners, shared liability.
  3. Limited Partnership (Samlagsfélag - SLF): General and limited partners.
  4. Private Limited Company (Einkahlutafélag - ehf.): Separate legal entity, limited liability.
  5. Public Limited Company (Hlutafélag - hf.): Separate legal entity, limited liability, shares can be traded publicly.
  6. Branch (Útibú): A branch of a foreign company operating in Iceland.
  7. Representative Office (Skrifstofa): Limited to marketing and promotional activities, cannot conduct business transactions.

Register Your Company

  1. Choose a Company Name: Ensure it is unique and follows naming regulations.
  2. Prepare the Memorandum and Articles of Association: Outlining the company’s structure and rules.
  3. Open a Bank Account: Deposit the initial capital required for the company type.
  4. Register with the Company Register at the Directorate of Internal Revenue (Ríkisskattstjóri): Submit the incorporation documents and pay the registration fee.
  5. Obtain a Value Added Tax (VAT) Number: If applicable.

Open an Icelandic Bank Account

  1. Set Up a Business Bank Account: Necessary for managing business finances.

Obtain Necessary Licenses and Permits

  1. Check Industry-Specific Requirements: Depending on the nature of your business, you may need specific licenses or permits.

Comply with Icelandic Employment Laws

  1. Employment Contracts: Draft contracts that comply with Icelandic labor laws.
  2. Register with the Directorate of Labor (Vinnumálastofnun): For social security and unemployment insurance purposes.
  3. Health and Safety Regulations: Follow guidelines from the Administration of Occupational Safety and Health (Vinnueftirlitið).

Accounting and Reporting

  1. Set Up an Accounting System: Maintain accurate financial records in compliance with Icelandic accounting standards.
  2. Annual Financial Statements: Prepare and file annual financial statements.
  3. File Annual Tax Returns: Submit annual tax returns to the Directorate of Internal Revenue.

Laws and Regulations to Consider

Corporate Law

  1. Act on Private Limited Companies (No. 138/1994): Governs the formation and operation of private limited companies.
  2. Act on Public Limited Companies (No. 2/1995): Governs the formation and operation of public limited companies.
  3. Icelandic Civil Code: Governs contracts and obligations.

Tax Law

  1. Income Tax Act (No. 90/2003): Governs corporate income taxation.
  2. Value Added Tax Act (No. 50/1988): Governs VAT regulations.

Employment Law

  1. Labor Law: Governs the terms and conditions of employment contracts.
  2. Social Security Act (No. 100/2007): Governs social security contributions.
  3. Occupational Safety and Health Act (No. 46/1980): Sets health and safety standards for workplaces.

Data Protection Law

  1. Act on the Protection of Privacy as regards the Processing of Personal Data (No. 90/2018): Governs data protection and privacy.

Environmental Law

  1. Act on Environmental Impact Assessment (No. 106/2000): Governs environmental protection and sustainability practices.

Intellectual Property Law

  1. Patent Act (No. 17/1991): Governs the protection of patents.
  2. Trademark Act (No. 45/1997): Governs the protection of trademarks.
  3. Copyright Act (No. 73/1972): Governs the protection of copyrights.

By following these steps and adhering to the relevant laws and regulations, you can successfully establish and operate a company in Iceland. It’s advisable to consult with legal and financial experts to ensure full compliance and smooth setup.

When to Consider Setting Up a Company in Iceland:

  1. Strategic Geographic Location: Iceland’s location provides access to markets in Europe and North America.
  2. Renewable Energy Resources: Iceland offers abundant renewable energy resources, making it an attractive location for energy-intensive industries.
  3. Favorable Investment Climate: Iceland offers various incentives for foreign investment and a supportive regulatory environment.
  4. Skilled Workforce: Access to a highly educated and skilled labor pool, particularly in technology, engineering, and renewable energy sectors.
  5. Developed Infrastructure: Iceland has a well-developed infrastructure, including transportation, telecommunications, and energy.
  6. Innovation and Technology: Iceland has a strong focus on innovation and technology, with numerous research institutions and tech hubs.
  7. Quality of Life: Iceland offers a high standard of living, excellent healthcare, and a pristine natural environment, making it attractive for expatriates and international employees.
  8. Stable Economic Environment: Iceland offers a stable macroeconomic environment with opportunities for growth.
  9. Access to Funding: Iceland has various funding opportunities for startups and businesses, including venture capital and government grants.

By considering these factors and aligning them with your business goals, you can determine if setting up a company in Iceland is the right move for your organization.

DALL·E 2024-07-08 12.02.10 - An illustration promoting Grant and Grahams global support for setting up companies. The image features a globe with various business icons around it
How to Set Up a Company

Step-by-Step Guide: How to set up a Company

Setting up a company involves a series of crucial steps that require careful planning and execution. From choosing the right business structure to understanding legal and tax obligations, each stage is vital to the successful launch and operation of your business. This step-by-step guide provides a comprehensive overview of the key processes involved in establishing a company, ensuring you have the knowledge and tools needed to navigate the complexities of business formation.