Starting a business in Iceland: foreigner's guide (2026)

Foreign ownership is generally unrestricted for most industries. The Act on Investment by Non-residents (No. 34/1991) sets the framework and imposes no blanket cap on foreign shareholding, making Iceland broadly accessible to international investors.

Fishing and fish processing: non-residents may not exceed 25% of share capital (or 33% if the Icelandic entity's stake in the fishing company is ≤5%). Aviation: aggregate non-resident share capped at 49% (EEA residents are exempt). Energy (hydro/geothermal): only Icelandic nationals, EEA, EFTA, or Faroese entities may participate.

A majority of the board of directors must reside in Iceland or another EEA or OECD member state. EEA citizens resident in any EEA state are exempt from the Iceland-residency prong. Non-EEA, non-OECD founders must either relocate a qualifying director or seek a ministerial exemption.

Private limited company (ehf.): ISK 500,000 (~EUR 3,300) fully paid at formation. Public limited company (hf.): ISK 4,000,000 minimum, at least half paid at formation. Sole proprietorships require no minimum capital. Registration fees for an ehf. are approximately ISK 142,000.

Steps: (1) reserve company name; (2) draft Articles of Association and Memorandum of Incorporation in Icelandic; (3) deposit share capital in an Icelandic bank; (4) submit electronic application via Skatturinn portal (requires Icelandic Electronic ID); (5) receive registration in the Register of Enterprises. Electronic applications process in 3–5 business days; paper filings take approximately 2–3 weeks.

All founding documents must be in Icelandic. Full electronic self-service requires an Icelandic Electronic ID (Íslykill/Rafræn skilríki), which non-residents typically cannot obtain before arrival, often necessitating a local legal representative or notarised paper filings.