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Local business incentives - Legal forms of companies - Registration and licensing procedures - Legal framework - Foreign exchange control - Regulations concerning equity investment - FDI inflows - Expertise of the political risk

Local business incentives

Broadly speaking, Iceland does not offer direct subsidies for business investment. Its prime incentives lie in the favourable environment for businesses in general, including low corporation tax, competitive labour costs and payroll costs, and low electricity prices. Industrial sites are available around Iceland at competitive cost. Local communities may offer certain further incentives.
However, as a member of the EEA, Iceland has access to EU research funds for R&D programmes and joint ventures undertaken with companies from at least one other EEA country. Grants are issued for specific projects on a case-by-case basis by bodies including the New Business Venture Fund and Science Fund.
The Invest in Iceland Agency provides exhaustive support and assistance to foreign investors.


Legal forms of companies

Form Number of partners/shareholders Minimum and/or maximum capital Liability Registration fee Release of financial documents
Einkahlutafelag is a Private Limited Company. No minimum. Minimum ISK 500,000. Liability is limited to the amount contributed. N/A
Hlutafelag is a Public Limited company. Minimum 2 partners. Minimum ISK 4 million. Liability is limited to the amount contributed. N/A.

Registration and licensing procedures
All legal entities have their own registration centre. Foreign investors willing to set up in Iceland should contact:
- Icelandic Bar Association:
Lögmannafélag Islands
Alftamyri 9
108 Reykjavik Iceland
- Registry of Limited-Liability Companies:
Laugavegi 13 101 Reykjavik.

Foreign exchange control

Regulations concerning equity investment
A majority holding interest in the capital of a local company is legal in Iceland.  

Foreign Direct Investment inflows in Iceland

FDI inflows 2003 2004 2005 World rank (*)
FDI inflows (USD million) 318 645 2329 13/141
Source : UNCTAD - World Investment Report
Note : (*) World Rank = UNCTAD Inward FDI Performance Index. It is a measure of the extend to which a host country receives inward FDI relative to its economic size. It is calculated as a ratio of the country's share in global FDI inflows to its share in global GDP.


Last modified in 2006 - ongoing update
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