Iceland is the extreme northwestern state of Europe (and with the smallest population in Europe – about 350.7 thousand). In the North Atlantic, it occupies the island of the same name, with an area of 103,125 km². The water area of the state is 2,750 km2, which determines the developed sphere of fishing, including deep-sea fishing. 10% of Icelanders are fishermen, and fish products account for 76% of exports and are imported duty-free into the European Union.
More than 50% of the population work in the service sector. In recent decades, tourism has become a very important source of foreign exchange income for Iceland. Along with tourism, the income of entrepreneurs who decide to register a company in the service sector, hotel services, and also on farms in rural areas in Iceland increases.
Due to its geographically isolated location in the North Atlantic, transport companies and Keflavik Airport benefit from growing tourism as Iceland can only be reached by plane or boat (Norröna car ferry).
Iceland is a very comfortable country to live in. The state provides people with the best conditions for living, working, and learning. It’s safe and beautiful here. And also, Iceland is ranked 12th in the ranking of countries for the ease of doing business.
Opening a company in Iceland, one of the possibilities for obtaining Icelandic citizenship. It is very comfortable to do business in this country. If you are not an Icelander or an EU citizen, then when choosing a field of activity, you must take into account the restrictions on foreign investment.
Prohibition for non-residents on economic activities:
- Fishing. It is the privilege of the indigenous population;
- Use of natural energy resources for business purposes;
- Restriction on investment in aviation companies.
Of course, business in Iceland is not limited to these traditional national spheres.
Key areas in which it is profitable to register a business in Iceland in 2021
- IT;
- banking;
- real estate auditing;
- building;
- insurance;
- outsourcing;
- marketing;
- trade;
- biotechnology;
- aluminum processing;
- obtaining electricity using alternative sources;
- shipping;
- pharmaceuticals;
- food industry;
- gambling.
Tax conditions in Iceland
- Corporate tax – 20%;
- Corporate tax for ITS companies – 5%;
- Added value – 25.5%;
- Reduced VAT rate – 7%;
- Dividends for a resident company – 20%;
- Dividends for a non-resident company – 18%;
- Dividends for a non-resident company, upon filing a tax return – 0%;
- Interest for a resident company – 20%;
- Interest for a non-resident company – 10%;
- Royalties for a non-resident company – 20%;
- Stamp duty – 2%.
Business forms in Iceland
In Iceland, there are several types of organizational and legal forms of companies:
- Individual enterprise;
- Partnership;
- Limited Liability Company;
- Public limited company;
- Private limited company;
- Branch of a foreign company;
- International trading company.
Business registration conditions
When planning to establish a company in Iceland, it should be borne in mind that the official language in the state is Icelandic. The documents must be submitted in a notarized translation into Icelandic, and they must contain the following information:
- name in Latin letters, including the legal form;
- data of the founders. The minimum number of directors and shareholders is entitled to register a private joint-stock company in Iceland – 1 person each (there may be legal entities). The number of founders for a public company (including the manager) is at least 2;
- data on the payment of the authorized capital for a private joint-stock company and an international trading company: from 500 thousand ISK (~3 350 euros), – for an open joint-stock company at least 4 million ISK (~26 830 euros);
- documents for obtaining a business license in Iceland for an International Trade Company (the cost of obtaining an Icelandic license is 100 thousand ISK – 670 euros).
The prerequisites for doing business in Iceland are auditing, filing financial and tax reports based on the company accounting records.
What is required to open a company?
Equity participation of Icelandic partners in business or permission to work in the country is required. To open a company, you need to obtain a multi visa and permission from the Ministry of Commerce.
Process of registration of a company in Hungary
- Select an unregistered company name;
- Open a deposit for the registered capital;
- Open current account;
- Register a company in the State Register;
- Get VAT number;
- Notify the tax office of the recruitment of employees to the company;
- Pay the registration fee:
- 89 000 kroons (~600 euros) for partnership;
- 130 500 kroons (~875 euros) – for NGO;
- 256 000 kroons (~1 717 euros) – for JSC or branch.
