COREDO > Company Formation in Iceland

Company Formation in Iceland

Why Register a Company in Iceland

Iceland is a stable and innovative Northern European jurisdiction with a high standard of living, advanced digital infrastructure, and a favourable business environment. The country offers foreign entrepreneurs remote company registration, access to the EEA market, a developed banking system, and double taxation treaty agreements.

Iceland is especially attractive for projects in renewable energy, biotech, IT, tourism, and international services.

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Cost of the service
from 6 000 EUR

Types of Companies in Iceland

Foreign entrepreneurs can register a company in Iceland in one of the following legal forms.

Ehf (Einkahlutafélag)

Private limited liability company. The most popular form for small and medium-sized businesses. A minimum of one founder is required. The minimum share capital is ISK 500,000 (approximately EUR 3,600), which must be fully paid up before registration. Pursuant to Icelandic law, the managing director and at least half of the members of the board of directors must be residents of Iceland, an EEA Member State, or an EFTA Member State. The registration fee is ISK 140,500, including the assignment of a company identification number and publication in the Official Gazette (Lögbirtingablaðið).

Hf (Hlutafélag)

Public limited company. Suitable for large-scale projects requiring significant capital. A minimum of two founders and at least three board members are required. The minimum share capital is ISK 4,000,000 (approximately EUR 30,000). The registration fee is ISK 276,500.

Partnership (P)

A form with a minimal entry threshold — share capital from ISK 50,000 (approximately EUR 360). Available only as a general partnership.

ITC (International Trading Company)

An international trading company designed for investment and trading activities outside Iceland. A business licence is required, and the minimum share capital is ISK 500,000 (approximately EUR 3,600).

Foreign companies also have the right to open a branch or representative office in Iceland. A branch operates on behalf of the parent company and is not a separate legal entity, while a representative office may only carry out marketing and research activities without the right to enter into commercial transactions. The choice of legal form depends on the scale of planned operations, the number of founders, and capitalisation requirements.

Company Registration Procedure

Legal entities in Iceland are registered through the Register of Limited Companies, administered by the Iceland Revenue and Customs (Skatturinn). The registration process is available online through the government portal Ísland.is, which significantly simplifies the procedure for foreign founders.

The main stages of ehf registration include: preparation of the Founding Agreement and Articles of Association, completion of official forms 17.21 and 17.27, deposit of share capital into the company’s bank account, submission of documents to the Register, and obtaining the company identification number (kennitala). Upon successful registration, the founder receives a Certificate containing complete information about the company. If the nature of the business requires licensing, the corresponding permit can be obtained from the Licensing Committee.

Founders must meet basic requirements: be at least 18 years of age, have full legal capacity, and not be subject to bankruptcy proceedings. All documents must be translated into Icelandic and certified by a local notary. The company name may be in any language; however, it must be transliterated in Latin characters.

Required Documents

To register a private limited liability company (ehf), the following documents are required: the Articles of Association specifying the company name, registered office address, share capital amount, and types of activities; the Founding Agreement; minutes of the founding meeting; completed forms 17.21 and 17.27; identification documents of the founders and directors; confirmation of share capital deposit into a bank account. The company name must end in “einkahlutafélag” or the abbreviation “ehf”. A registered office in Iceland and a bank account at an Icelandic bank are mandatory for conducting business. All documents in foreign languages must be translated into Icelandic and notarised.

Registration Timeline

Processing an electronic application for ehf registration takes 3 to 5 business days, provided a complete set of correctly prepared documents is submitted. After registration is complete, the company receives its identification number (kennitala) and can begin its business activities. It should be noted that opening a bank account at an Icelandic bank and obtaining additional licences (if required) may take additional time. COREDO specialists help coordinate all stages of the process, minimising delays and ensuring the correct preparation of every document.

Cost of Services

The cost of COREDO’s company formation services in Iceland ranges from EUR 6,000 to EUR 10,000 + VAT, depending on the complexity of the project. The package includes: preparation of all necessary documents, coordination and filing with the Icelandic Business Registry, obtaining the registration number and certificate, bank account opening assistance, a virtual registered address for 1 year, and ongoing support. The minimum share capital for an Ehf is ISK 500,000 (approximately EUR 3,500). Registration typically takes 14–16 business days from the submission of the complete document package.

Restrictions for Foreign Investors

When registering a company in Iceland, a number of restrictions for non-residents should be taken into account. Foreign investors — except for EU citizens — are prohibited from engaging in commercial fishing and using the country’s natural energy resources for business purposes. In addition, foreign ownership in Icelandic airlines is limited to 49%. Foreign entrepreneurs must obtain authorisation from the Ministry of Trade of Iceland before commencing commercial activities.

Tax System of Iceland

Iceland offers a competitive tax system with moderate rates. The corporate income tax (CIT) rate for ehf and hf companies is 20%. The standard value-added tax (VAT) rate is 24%, and the reduced rate is 11% (applicable to certain categories of goods and services, including food and books). VAT registration is mandatory when annual turnover exceeds ISK 2,000,000. The capital gains tax is 22%.

Companies are required to file an annual tax return by 31 May and submit financial statements within 8 months after the end of the financial year. Financial reporting must be prepared in accordance with Icelandic accounting standards (IASB) or International Financial Reporting Standards (IFRS) for large companies. Active double taxation avoidance agreements with 42 countries allow optimisation of the international tax burden and minimisation of double taxation risks on income from international activities.

Iceland also offers a range of tax incentives for innovative companies, particularly in the renewable energy and information technology sectors, making the jurisdiction especially attractive for startups and technology projects with an international focus.

Opening a Bank Account in Iceland

To conduct business activities, a registered company is required to have a bank account at an Icelandic bank. Iceland’s banking system is well developed and includes several major commercial banks offering corporate accounts for local and foreign companies. Opening an account requires submission of the company’s incorporation documents, identification of directors and beneficial owners, and a description of planned activities. Client verification (KYC) is conducted in accordance with Icelandic anti-money laundering (AML) legislation. COREDO specialists provide assistance in preparing the necessary documentation and communicating with banks.

Our Experts

The COREDO team has been operating since 2016 and possesses deep expertise in company registration across various European jurisdictions. Our specialists support clients at every stage — from selecting the legal form to obtaining the registration number and opening a bank account.

Nikita Veremeev

Founder & NED of COREDO. Founded the company in 2016 and personally oversees the strategic development of the business across dozens of jurisdictions. Holds a Master's degree in business management and corporate finance (University of Finance and Administration, Prague).

Pavel Kos

Head of Legal. Has been with the COREDO team since June 2017, responsible for legal support of corporate projects and company registration. Possesses experience in strategic planning and management of legal projects across various jurisdictions.

Basang Ungunov

Lawyer. Has been with the COREDO team since June 2022, specialising in legal support for registration and structuring of companies across various jurisdictions. Holds a Master of Laws (LLM) degree in civil law.

Frequently Asked Questions

Is it necessary to be a resident of Iceland to register a company?

No, citizens of OECD countries can freely establish limited liability companies in Iceland without the need to reside in the country. This right is granted under a general authorisation from the Ministry of Industry.

What is the minimum share capital for an ehf in Iceland?

The minimum share capital for a private limited liability company (ehf) is ISK 500,000, equivalent to approximately EUR 3,600. The capital must be fully paid up before the company is registered.

How long does it take to register an ehf in Iceland?

Electronic registration of an ehf through the Register of Limited Companies takes 3 to 5 business days, provided a complete set of correctly prepared documents is submitted.

What is the corporate tax rate in Iceland?

The corporate income tax rate for ehf and hf companies is 20%. The standard VAT rate is 24%, and the reduced rate is 11%.

Are there restrictions for foreign investors in Iceland?

Icelandic legislation establishes sectoral restrictions: fishing and energy resources are closed to non-residents (except for EU citizens), and foreign ownership in airlines is limited to 49%. However, for most industries — including IT, consulting, and trade — there are no restrictions; it is sufficient to obtain authorisation from the Ministry of Trade before commencing activities.

Contact Us

COREDO specialists provide full support for the company registration process in Iceland — from preparing incorporation documents and interacting with the Register to obtaining the identification number (kennitala), tax registration, and opening a bank account. We have been operating since 2016 and help entrepreneurs from dozens of countries successfully build business structures in Europe and beyond. Contact us for a personalised consultation on your project.