Doing business

Iceland

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Setting up a company | FDI in figures | Why you should choose to invest | Procedures relative to foreign investment | Finding assistance for further information

Setting up a company

Types of companies and capital (max/min)	Number of partners/shareholders and liability
Einkahlutafelag is a Private Limited Company. Minimum ISK 500 000.	No minimum. Liability is limited to the amount contributed.
Hlutafelag is a Public Limited company. Minimum ISK 4 million.	Minimum 2 partners. Liability is limited to the amount contributed.

Business setup procedures

Setting up a company	Iceland	OECD
Procedures (number)	5.0	5.6
Time (days)	5.0	13.8

Source: Doing Business.

For further information: Consult Doing Business Website, to know about procedures to start a Business in Iceland.
Statistics Iceland
The competent organization: The competent organization is the Company Registration, hosted at the Internal Revenue Directorate.

FDI in figures

Foreign Direct Investment	2008	2009	2010
FDI inward flow (millions USD)	918	83	2,950
FDI stock (millions USD)	9,206.5	8,629.4	11,771.2
Performance Index*, ranking on 141 economies	52	139	-
Potential Index**, ranking on 141 economies	17	-	-
Number of Greenfield investments***	2	-	-
FDI inwards (in % of GFCF****)	22.4	4.5	-
FDI stock (in % of GDP)	54.8	68.3	-

Source:

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk. *** Green field investments are a form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up. **** Gross fixed capital formation (GFCF) measures the value of additions to fixed assets purchased by business, government and households less disposals of fixed assets sold off or scrapped.

Why you should choose to invest Iceland

Strong points: The country's main strong points are:
- A strong export industry;
- A flexible job market;
- A young qualified workforce;
- modern and efficient infrastructures.
Weak points: The country's main weak points are:
- The limited size of the domestic market;
- The country's vulnerability in the face of the financial crisis;
- High production costs.
Government measures to motivate or restrict FDI: Iceland has set up a very favorable company taxation system (only 15% corporate tax) and also simplified all company formation procedures (only one day). The establishment of free-trade zones and competitive clusters is another measure in favor of investments.
For further information, visit the Invest Iceland website.

Procedures relative to foreign investment

Freedom of establishment: The country is very open to investment, however there are some restrictions in the energy, fishing and air transport sectors.
Acquisition of holdings: A majority holding interest in the capital of a local company is legal in Iceland.
Obligation to declare: The agency for the promotion of foreign investment in the country gives information about the authorizations required for setting up business.
Competent organization for the declaration: Ministry of Finance
Ministry of Industry
Requests for specific authorizations: As a general rule, there are no specific authorizations for investing in Iceland.
For further information, visit Invest Iceland.

Finding assistance for further information

Investment aid agency: Invest in Iceland Agency
Other useful resources: Icelandic Chamber of Commerce