Iceland, known for its breathtaking landscapes, vibrant culture, and high quality of life, is also an attractive destination for business endeavors. The country’s favorable business environment, well-educated workforce, and strong infrastructure make it an ideal location to establish a new company. Here’s a comprehensive guide on how to register a company in Iceland.
1. Understanding the Business Climate in Iceland
Iceland ranks highly in global indexes for ease of doing business. The country’s strategic location between Europe and North America, combined with a stable political environment and strong emphasis on innovation, provides a fertile ground for new businesses. Icelanders have a strong command of English, which facilitates smooth communication for international entrepreneurs. Additionally, Iceland offers various incentives for start-ups, especially in the tech and renewable energy sectors.
2. Types of Business Entities in Iceland
Before you start the registration process, it’s important to decide which type of business entity suits your needs. Iceland offers several options:
– **Private Limited Company (EHF)**: This is the most common form of business entity for small to medium-sized enterprises. It requires a minimum share capital of ISK 500,000.
– **Public Limited Company (HF)**: Suitable for larger businesses, it requires a minimum share capital of ISK 4,000,000.
– **Branch Office**: Foreign companies can establish a branch office in Iceland but must appoint a representative who resides in the country.
– **Partnerships**: This includes both general and limited partnerships, where the partners share profits and liabilities.
3. Steps to Register a Company
i. **Choose a Unique Company Name**: Ensure that the name is not already registered by another entity. You can check the availability through the Directorate of Internal Revenue’s (Skatturinn) website.
ii. **Prepare Registration Documents**: You’ll need to draft and prepare the following documents:
– Articles of incorporation
– Information about the founders, board members, and managing directors
– An initial share capital payment certificate from a bank
iii. **Submit Documents to the Register of Enterprises**: All your documents, along with a signed application form, must be submitted to the Register of Enterprises (Fyrirtækjaskrá). This can often be done online.
iv. **Obtain an ID Number**: Once your documents are verified, you’ll receive a Kennitala (company ID number).
v. **Register for Taxes**: Register your company for value-added tax (VAT) and other applicable taxes with the Directorate of Internal Revenue.
4. Post-Registration Requirements
After successfully registering your company, you’ll need to comply with ongoing administrative and legal obligations:
– **Accounting and Auditing**: Maintain accurate financial records and submit annual financial statements. Larger companies may be required to have their accounts audited.
– **Employment Regulations**: Ensure compliance with Icelandic labor laws, including employee rights, contracts, and social security contributions.
– **Corporate Governance**: Follow corporate governance practices, including regular board meetings and shareholder meetings.
5. Business Support and Incentives
Iceland provides a range of support services for new businesses. Organizations such as Invest in Iceland offer guidance and resources to help you navigate the business landscape. There are also various financial incentives, such as grants and tax breaks, particularly for innovative and sustainable projects.
In conclusion, registering a company in Iceland involves a few straightforward steps and provides a promising gateway to the European and North American markets. With its robust infrastructure, progressive business environment, and a wealth of natural resources, Iceland is an excellent choice for entrepreneurs looking to establish and grow their business.
Suggested related links about How to Register a Company in Iceland:
Directorate of Internal Revenue (RSK)
Business Iceland (Íslandsstofa)