Cost To Start A Business In Iceland
Iceland’s business climate is competitive with that of the world’s other developed nations. Iceland is an excellent choice for firms who want to establish their corporations in a new location. Establishing a firm in Iceland would benefit an entrepreneur because of its low taxation system, highly skilled personnel, and various innovative industries.
However, when establishing a firm, entrepreneurs will have to consider numerous elements. One of the elements is the cost to start a business in Iceland. The overall registration cost for starting a business in Iceland as a foreigner is ISK 131,000. When starting a business, the entrepreneur must pay for a number of additional expenses.
The cost for starting a business in Iceland as a foreigner depends on numerous factors, such as business registration expenses, business licenses, registered office address, share capital, registering with the tax authorities, etc.
This article will talk about the cost to start a business in Iceland. In addition to that, it will cover the various elements that influence the cost for starting a business in Iceland as a foreigner.
Variables that influence the cost to start a business in Iceland
Whenever a businessperson starts a company in Iceland, they must take into account the numerous costs associated with doing business there. The cost for starting a business in Iceland as a foreigner may be influenced by different variables.
This part of the article will briefly discuss the variables that influence the cost to start a business in Iceland.
- Expenditure for registering the business– In order to register a company in Iceland, the entrepreneur has to enroll the firm and pay the necessary cost of ISK 131,000.
- Expenditure for acquiring permits– Businesses in some industries need operating permits. Depending on the sector you plan to launch your business, you will need to submit an application for an operational license to the pertinent organization. In some cases, visiting many locations to acquire permits may also be needed. As such, you need to be aware of the various costs associated with acquiring business licenses.
- Tax and VAT registration expenses– In order to pay income tax and value-added tax, it is essential for firms to enroll with the relevant tax authorities.
- Opening a corporate bank account- The company must register a corporate bank account where the minimal share capital necessary to launch a business is deposited.
- Depositing the minimum share capital– A private limited company needs a minimum share capital of ISK 500,000. Similarly, a public limited company requires ISK 4,000,000.
- Payment for Official Gazette publication of notification– There is an additional fee of approximately ISK 1,000 for publishing the notice in the “Official Gazette.”
- Registering for Social Security Number– The business owner must register for a social security number and pay the applicable costs.
- Rent for the registered office location- In order to conduct business in Iceland, the entrepreneur will have to rent a location, where the registered office address can be established. As a result, the accompanying costs must be paid by the business owner.
The business registration cost to start a business in Iceland
- In order to register a business in Iceland, the business owner has to apply with the Register of Enterprises.
- Additionally, the register is also responsible for publishing the notification of establishment in the authorized journal, the Official Gazette.
- The overall registration cost for starting a business in Iceland as a foreigner is ISK 131,000. The overall charge contains the firm’s identifying number which is approximately ISK 5,000.
- In addition to that, the expense for the Official Gazette publication of notification is ISK 1,000.
Cost to start a business in Iceland for different business types
The following are the cost to start a business in Iceland for different business types:
Public Limited Company
The registration cost for a public limited company is ISK 256,000. It comprises the expense of an identification number and “Legal Gazette” enrollment.
Private Limited Company
The overall registration charge for a private limited company is ISK 130,500, which also covers the expense of an identification number and the issuance of a notice in the “Legal Gazette.”
Individual Company
The fee for registering an individual company is 66,500 ISK. Additionally, a cost of ISK 1,000 is further charged for the publication of notice of the registration of the individual’s firm in the “Legal Gazette”.
Partnership Firm
The basic registration charge for a partnership firm is ISK 83,000, although there is an additional ISK 1,000 amount for the publishing of the notice in the “Official Gazette.” Along with that, there is a charge of ISK 5,000 for acquiring the social security number.
Co-operative Societies
A co-operative society must pay ISK 256,000 to register with the Register of Co-operative Societies, which includes the expense of an identification number and publication in the “Official Gazette.”
Required share capital cost for starting a business in Iceland as a foreigner
- In order to incorporate a firm, the entrepreneur must pay the required share capital cost for starting a business in Iceland as a foreigner.
- However, the amount of share capital that must be deposited varies depending on the form of business that is selected.
- A minimum share capital of ISK 4 million is necessary in Iceland in order to form a public limited corporation. Similarly, to incorporate a private limited company, ISK 500,000 is the minimum amount of required share capital.
- However, there is no requirement for a minimum share capital when incorporating an individual firm, a partnership firm, or a branch office.
Rent office cost for starting a business in Iceland as a foreigner
- While establishing a firm, it is essential for the entrepreneur to have an official registered address of the firm. All significant notices and mails are delivered to the official registered address.
- The official address of the business is also included on all necessary invoices and other documents of the firm. The business owner must keep in mind the expenses that must be incurred while registering an office address in Iceland.
- The costs associated with renting a small office location in Reykjavik may cost approximately ISK 180,000.
Conclusion
Iceland offers a stable and favorable business environment for entrepreneurs to set up a business. However, the entrepreneur must account for the numerous costs associated with the incorporation procedure while beginning a business.
The article gives a succinct breakdown of the cost to start a business in Iceland. If you wish to incorporate a firm in Iceland, you can consult our company formation experts at Odint Consulting. Our experts will help you with the steps to incorporate a company in Iceland.
FAQ’s
- Expenditure for registering the business
- Expenditure for acquiring licenses and permits
- Tax and VAT registration expenses
- Opening a corporate bank account
- Depositing the minimum share capital
- Payment for Official Gazette publication of notification
- Registering for Social Security Number
- Rent for the registered office location
The cost for starting a business in Iceland as a foreigner is approximately ISK 131,000.
- Businesses in some industries need operating permits. Depending on the sector you plan to launch your business, you will need to submit an application for an operational license to the pertinent organization.
- In some cases, visiting many locations to acquire permits may also be needed. As such, you need to be aware of the various costs associated with acquiring business licenses.
In Iceland, forming a business is not too difficult as the nation offers a stable and friendly business environment. However, it’s crucial that the business’s legal structure is appropriate for its operations.
Forming a public limited corporation in Iceland requires a minimum share capital of ISK 4 million. Similarly, ISK 500,000 is the bare minimum share capital needed to form a private limited corporation.
The annual costs of maintaining a company in Iceland are as follows:
Company tax: 20% of profits.
VAT: 24% on most goods and services.
Licenses and permits: Depending on the industry, there may be additional costs for licenses and permits.
Accounting fees: ISK 100,000 – ISK 200,000 (approximately €800 – €1,600) per year.
