OpenAccountants/Iceland/Iceland Company Formation & Entity Choice

Iceland Company Formation & Entity Choice

Name: OpenAccountants MCP Server
Author: OpenAccountants

Source-cited draft: company formation & entity choice for Iceland (tax year 2025) — rates, thresholds and rules with primary-source citations. Unverified; pending local-accountant review.

Applicable period 2025Source-cited draft· Last updated Jun 25, 2026

Source-cited draft.Written from sources but not reviewed by a licensed practitioner, so it may be incomplete or wrong. General reference only; don't file or take a position on it without professional review.

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Key figures — Iceland, 2025

Every figure is drawn from this Tax Guide and cited to its source.

Private limited company (einkahlutafelag, 'ehf.')

Most common SME vehicle; can be formed by a single shareholder who may also be the sole directorAct No. 138/1994 on Private Limited Companies (Lög um einkahlutafelog)View source ↗

Public limited company (hlutafelag, 'hf.')

Used for larger / listed companies; higher minimum capital and stricter governanceAct No. 2/1995 on Public Limited Companies (Lög um hlutafelog)

Other entity forms

General partnership (sameignarfelag, 'sf.'), limited partnership (samlagsfelag, 'slf.'), sole proprietorship (einstaklingsrekstur), branch of a foreign companyAct No. 50/2007 on Partnerships (Lög um samlagsfelog og sameignarfelog)

Minimum share capital — private limited company (ehf.)

500,000Act No. 138/1994 on Private Limited CompaniesView source ↗

Minimum share capital — public limited company (hf.)

4,000,000Act No. 2/1995 on Public Limited Companies

Core incorporation documents

Notification of Incorporation (Stofntilkynning), Memorandum of Association (Stofnsamningur), and Articles of Association (Samþykktir)Act No. 138/1994 on Private Limited CompaniesView source ↗

Registration authority

Register of Enterprises (Fyrirtækjaskra), part of Skatturinn; filed electronically via the Skatturinn service portalAct No. 138/1994 on Private Limited CompaniesView source ↗

Incorporation timeline

Approximately 3–5 working days for electronic applicationsAct No. 138/1994 on Private Limited CompaniesView source ↗

Company registration fee

130,500Act No. 17/2003 on the Business Register (Lög um fyrirtækjaskra)

Share capital payment requirement

Full ISK 500,000 must be deposited in an Icelandic bank account before registration; in-kind contributions need CPA/lawyer confirmationAct No. 138/1994 on Private Limited CompaniesView source ↗

Annual financial statements

Companies must prepare annual financial statements and file them with the Register of Annual Accounts (Arsreikningaskra)Act No. 3/2006 on Annual Accounts (Lög um arsreikninga)

Annual corporate tax return

Annual income tax return due generally 31 May (extendable to 30 September for professionally prepared returns)Act No. 90/2003 on Income TaxView source ↗

Statutory audit

Audit required for entities exceeding size thresholds; small ehf. companies below thresholds may be exemptAct No. 3/2006 on Annual Accounts

Rendered from the canonical facts model. General reference only — confirm with a qualified professional before acting.

The full Guide

Entity types, incorporation and annual compliance

The most common vehicle is the private limited company (einkahlutafelag, 'ehf.'). Companies register with the Register of Enterprises (Fyrirtækjaskra) operated by Skatturinn.

Private limited company (einkahlutafelag, 'ehf.') — Most common SME vehicle; can be formed by a single shareholder who may also be the sole director (Act No. 138/1994 on Private Limited Companies (Lög um einkahlutafelog))
Public limited company (hlutafelag, 'hf.') — Used for larger / listed companies; higher minimum capital and stricter governance (Act No. 2/1995 on Public Limited Companies (Lög um hlutafelog))
Other entity forms — General partnership (sameignarfelag, 'sf.'), limited partnership (samlagsfelag, 'slf.'), sole proprietorship (einstaklingsrekstur), branch of a foreign company (Act No. 50/2007 on Partnerships (Lög um samlagsfelog og sameignarfelog))
Minimum share capital — private limited company (ehf.) — 500,000 ISK (fully paid up at establishment) (Act No. 138/1994 on Private Limited Companies)
Minimum share capital — public limited company (hf.) — 4,000,000 ISK ((approx — confirm)) (Act No. 2/1995 on Public Limited Companies)
Core incorporation documents — Notification of Incorporation (Stofntilkynning), Memorandum of Association (Stofnsamningur), and Articles of Association (Samþykktir) (Act No. 138/1994 on Private Limited Companies)
Registration authority — Register of Enterprises (Fyrirtækjaskra), part of Skatturinn; filed electronically via the Skatturinn service portal (Act No. 138/1994 on Private Limited Companies)
Incorporation timeline — Approximately 3–5 working days for electronic applications ((approx — confirm)) (Act No. 138/1994 on Private Limited Companies)
Company registration fee — 130,500 ISK (Government registration fee approximately, for an ehf. (electronic) (approx — confirm current fee)) (Act No. 17/2003 on the Business Register (Lög um fyrirtækjaskra))
Share capital payment requirement — Full ISK 500,000 must be deposited in an Icelandic bank account before registration; in-kind contributions need CPA/lawyer confirmation (Act No. 138/1994 on Private Limited Companies)
Annual financial statements — Companies must prepare annual financial statements and file them with the Register of Annual Accounts (Arsreikningaskra) (Act No. 3/2006 on Annual Accounts (Lög um arsreikninga))
Annual corporate tax return — Annual income tax return due generally 31 May (extendable to 30 September for professionally prepared returns) (Act No. 90/2003 on Income Tax)
Statutory audit — Audit required for entities exceeding size thresholds; small ehf. companies below thresholds may be exempt ((approx — confirm thresholds)) (Act No. 3/2006 on Annual Accounts)

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Entity types, incorporation and annual compliance

The most common vehicle is the private limited company (einkahlutafelag, 'ehf.'). Companies register with the Register of Enterprises (Fyrirtækjaskra) operated by Skatturinn.

Private limited company (einkahlutafelag, 'ehf.') — Most common SME vehicle; can be formed by a single shareholder who may also be the sole director (Act No. 138/1994 on Private Limited Companies (Lög um einkahlutafelog))

Public limited company (hlutafelag, 'hf.') — Used for larger / listed companies; higher minimum capital and stricter governance (Act No. 2/1995 on Public Limited Companies (Lög um hlutafelog))

Other entity forms — General partnership (sameignarfelag, 'sf.'), limited partnership (samlagsfelag, 'slf.'), sole proprietorship (einstaklingsrekstur), branch of a foreign company (Act No. 50/2007 on Partnerships (Lög um samlagsfelog og sameignarfelog))

Minimum share capital — private limited company (ehf.) — 500,000 ISK (fully paid up at establishment) (Act No. 138/1994 on Private Limited Companies)

Minimum share capital — public limited company (hf.) — 4,000,000 ISK ((approx — confirm)) (Act No. 2/1995 on Public Limited Companies)

Core incorporation documents — Notification of Incorporation (Stofntilkynning), Memorandum of Association (Stofnsamningur), and Articles of Association (Samþykktir) (Act No. 138/1994 on Private Limited Companies)

Registration authority — Register of Enterprises (Fyrirtækjaskra), part of Skatturinn; filed electronically via the Skatturinn service portal (Act No. 138/1994 on Private Limited Companies)

Incorporation timeline — Approximately 3–5 working days for electronic applications ((approx — confirm)) (Act No. 138/1994 on Private Limited Companies)

Company registration fee — 130,500 ISK (Government registration fee approximately, for an ehf. (electronic) (approx — confirm current fee)) (Act No. 17/2003 on the Business Register (Lög um fyrirtækjaskra))

Share capital payment requirement — Full ISK 500,000 must be deposited in an Icelandic bank account before registration; in-kind contributions need CPA/lawyer confirmation (Act No. 138/1994 on Private Limited Companies)

Annual financial statements — Companies must prepare annual financial statements and file them with the Register of Annual Accounts (Arsreikningaskra) (Act No. 3/2006 on Annual Accounts (Lög um arsreikninga))

Annual corporate tax return — Annual income tax return due generally 31 May (extendable to 30 September for professionally prepared returns) (Act No. 90/2003 on Income Tax)

Statutory audit — Audit required for entities exceeding size thresholds; small ehf. companies below thresholds may be exempt ((approx — confirm thresholds)) (Act No. 3/2006 on Annual Accounts)