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Iceland, a Nordic island nation in the North Atlantic, is known for its dramatic landscapes, stable democracy, and cutting-edge digital infrastructure. Strategically positioned between Europe and North America, Iceland serves as a key hub for international trade and investment. With a highly educated, multilingual workforce and a transparent regulatory framework, Iceland is a prime location for sustainable, environmentally aligned business ventures.
Efficient Business Setup
Registering a private limited company (ehf.) typically takes 3–5 working days via electronic application, requiring Icelandic electronic ID.
Highly Skilled Workforce
Iceland’s workforce benefits from strong investments in education and innovation, yielding a pool of adaptable, multilingual talent.
Low Setup Costs
Office rents are moderate, bureaucracy is minimal, and the minimum share capital for a private limited company (ehf.) is ISK 500,000 (~€3,500).
Favourable Business Environment
The government promotes foreign investment through streamlined procedures, low corruption levels, and transparent regulations.
Tax Benefits
Iceland has double tax treaties with over 40 countries and provides tax incentives for innovation-driven sectors.
Leader in Digital Administration
Iceland consistently ranks highly in e government, providing efficient online business registration and administration processes.
Tax Rates (2025)
• Up to ISK 4.4 M: ~31.5%
• ISK 4.4–12 M: ~38%
• Above ISK 12 M: ~46%
These figures include national, social, and municipal taxes
Corporate Income Tax
• Limited liability companies (ehf.) and LLCs: 20%
• Partnerships and certain legal entities: ~37.6%.
No additional local or regional CIT.
Value Added Tax (VAT)
• Standard rate: 24%
• Reduced rate: 11% (e.g., food and certain services).
Double Taxation Treaties
Agreements with more than 40 countries reduce tax burdens and simplify international operations.
Other Taxes
• Petroleum/carbon taxes on fuels (e.g., gasoline ~ISK 18.6/litre).
• 5.5% Financial Activities Tax on salary costs of financial institutions.
GDP is projected to grow by about 2.2–2.3% in 2025 and 2.5–2.8% in 2026. Inflation is expected to ease from ~5% in 2024 to ~3.0% in 2025, reaching policy targets by 2026. Unemployment is forecast around 3.5–3.8%.
Fiscal consolidation efforts continue, with public debt projected to decrease to ~39% of GDP by 2028.
Regulatory Updates
Foreign investors may establish branches or subsidiaries, though restrictions exist in fisheries-related sectors.
Reporting obligations include annual accounts filed with the Register of Enterprises and Annual Accounts.
Iceland offers an advanced, transparent, and pro-business environment with efficient setup, robust digital infrastructure, and attractive taxation. Positioned between Europe and North America and with a highly skilled workforce, Iceland is an ideal choice for regional expansion, innovation-driven industries, and green-energy ventures.
Chandrawat & Partners is a prominent full-service firm dedicated to delivering top-tier professional services to clients both within the domestic and international spheres.
Chandrawat & Partners stands as a dynamic and rapidly expanding full-service firm, specializing in the delivery of exceptional professional and corporate services to a diverse clientele, both foreign and local. We proudly represent companies and individuals across a wide spectrum of sectors through distinct entities established in various countries worldwide.
Chandrawat & Partners stands as a dynamic and rapidly expanding full-service firm, specializing in the delivery of exceptional professional and corporate services to a diverse clientele, both foreign and local. We proudly represent companies and individuals across a wide spectrum of sectors through distinct entities established in various countries worldwide.
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