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Starting a Business in

Iceland

Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Iceland. It examines the procedures, time and cost involved in launching a commercial or industrial firm with between 10 and 50 employees and start-up capital of 10 times the economy's per-capita gross national income.

This information was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 190 economies. The most recent round of data collection was completed in June 2016.

Compare Iceland to 189 other economies.

  • No. Procedure Time to Complete Associated Costs
    1

    Search for company name

    Agency: Register of Enterprises (Directorate of Internal Revenue)

    The company name database can be accessed at the Internal Revenue's website (www.rsk.is).

    Less than one day (online procedure) no charge
    2

    Deposit initial capital in bank account

    Agency: Commercial Bank

    The initial capital can be deposited in any commercial bank.

    1 day no charge
    3

    Apply for registration with Register of Enterprises

    Agency: Register of Enterprises

    To apply for registration with the Register of Enterprises, the company must provide five documents:
    1. Notification of incorporation form
    2. Agreement of incorporation
    3. Record of the meeting of incorporation
    4. Articles of Association
    5. Affidavit on payment of share capital, issued by a certified public account

    The register is also in charge of advertising the incorporation notice in the Official Gazette, the official journal. The total registration fee is ISK 130,500, which includes the company identification number (ISK 5,000), and the fee for publishing the notification in the Official Gazette (ISK 1,000).

    Model incorporation documents and forms (in Icelandic) can be found on the Ministry of Industries and Innovation's website (www.atvinnuvegaraduneyti.is). The notification of incorporation form can be downloaded at no cost from the Internal Revenue Office website (www.rsk.is).

    1 day ISK 130,500
    4

    Obtain a VAT number

    Agency: Directorate of Internal Revenue

    Taxable parties must report their activities to the Director of Internal Revenue no later than 8 days after the activity begins. Companies that plan to sell goods or services valued at more than ISK 1,000,000 are required to collect and report VAT.

    Applicants can fill out form 5.02 which can be submitted online (https://www.rsk.is/atvinnurekstur/ad-hefja-rekstur/virdisaukaskattsskra/nr/160). The signed form and notification can also be sent via email to the Register of Enterprises and/or by visiting the offices of the Director of Internal Revenue. The Director of Internal Revenue will subsequently assign the applicant company with a VAT number which the company shall use in it’s economical activities. The notification can also be filed at www.skattur.is with a web key.

    Less than one day (online procedure) no charge
    5

    Notify tax authorities of employment of workers

    Agency: Tax authorities

    The notification can be filed at www.skattur.is with a web key. The signed form and notification can also be sent via email to the Register of Enterprises.

    Less than one day (online procedure) no charge