How to Start a Business in Iceland: A Step-by-Step Guide (2025)

Introduction: Iceland Is Open for Bold Business

Iceland is no longer just the land of volcanoes and northern lights — it’s a land of opportunity for bold entrepreneurs. With a stable economy, modern infrastructure, and government support for innovation, starting a business here is easier than many imagine. Whether you’re a local visionary or an expat with a mission, this guide walks you through every essential step to launch your business in Iceland in 2025.

Step 1: Choose Your Business Type

You’ll need to decide on a legal structure. In Iceland, the most common business types are:

• Ehf. (Einkahlutafélag)—Private Limited Company (most popular for entrepreneurs)

• Sole Proprietor (einstaklingsfyrirtæki)—Simple but offers less legal protection

• Hf. (Public company, used for large-scale ventures

 Most entrepreneurs choose Ehf.—it offers flexibility, liability protection, and suits both locals and foreign investors.

Step 2: Register Your Company

You register your business through the Icelandic Company Registry (Fyrirtækjaskrá), operated by the Directorate of Internal Revenue (Ríkisskattstjóri).

 What you’ll need:

• Company name

• Articles of incorporation

• List of owners and board members

• Icelandic ID (kennitala) or registration for foreigners

Cost: Approx. ISK 131,000 (~€850) for private limited company registration.

Official Registration Site

Step 3: Set Up a Business Bank Account

Once your company is approved, you’ll receive a registration certificate — then you can open a business bank account.

  Banks like Arion, Íslandsbanki, and Landsbankinn support business accounts in both ISK and EUR.

  You’ll need:

• Company registration proof

• Identity documents of founders

• Business plan or financial forecast (for some banks)

Step 4: Understand Taxes & Reporting

All businesses in Iceland are subject to:

• VAT (Usually 24%)

• Corporate tax—20% for private limited companies

• Payroll taxes and social insurance if you hire employees

 Use accounting software or hire a local accountant familiar with Icelandic compliance. The tax authority (Ríkisskattstjóri) has strict reporting deadlines.

Step 5: Apply for Grants & Support

Iceland offers several programs to support startups:

• Innovation Center Iceland (Nýsköpunarmiðstöð) — Advice, funding, and incubators

• RANNÍS — Research & innovation funding

• Startup Iceland & Frumtak — Networking and angel investment communities

 Most government grants favor

• Technology and digital businesses

• Green energy & sustainability

• Education and cultural innovation

Step 6: Go Live — and Think Global

Once you’ve set up legally and financially, it’s time to go live.

 Build a simple, clean website
 Register social media handles
 Start marketing in both Icelandic and English to reach local and global markets

Bonus: How NordicEntrepreneur Can Help

You don’t need to figure everything out on your own.

If you're looking for practical education, real-world strategies, and mental clarity, check out our beginner course: www.nordicentrepreneur.net/courses

We teach more than just “business”—we” show you how to break the system and build something meaningful, especially within Iceland’s unique ecosystem.

Final Words

Starting a business in Iceland in 2025 is not just possible — it’s powerful. With the right tools, guidance, and mindset, you can go from idea to income on one of the world’s most innovative islands.

Stay bold, think Nordic, and build smart.