Company compliance requirements in Iceland

Businesses doing business in Iceland must adhere to a number of legal and regulatory regulations. This blog will discuss the company compliance requirements in Iceland.

Compliance requirements for registered businesses in Iceland

The World Bank's Doing Business report continually lists Iceland as one of the most business-friendly nations in the world. A quick and easy registration process, a stable political and economic climate, and a knowledgeable workforce are all features of the nation. This article will explain the compliance requirements for registered businesses in Iceland.

Compliance requirements for registered businesses in Iceland

The following are some of the principal Icelandic company compliance requirements:

Registration 

The Icelandic Registry of Companies is the place where all businesses conducting business in Iceland must register. This involves disclosing details regarding the board of directors, shareholders, and legal framework of the business.

Tax compliance 

Businesses in Iceland are required to abide by all applicable tax laws and rules, including timely filing and payment of taxes. Payroll taxes, value-added tax (VAT), and corporate income taxes are all included in this.

Accounting and financial reporting 

Icelandic accounting rules must be followed by businesses in order to maintain correct accounting records and produce financial statements. A certified auditor must conduct an audit of the financial statements before they can be submitted to Iceland's Register of Annual Accounts.

Permits and licences 

Certain professions or activities may call for particular licences or permissions, such as a licence to run a bank or a permit to run a restaurant or bar.

Data protection 

The Global Data Protection Regulation (GDPR) and the Icelandic Data Protection Act, which govern the gathering, using, and storing of personal data, must be complied with by businesses operating in Iceland.

Corporate governance 

Businesses operating in Iceland are expected to follow ethical and transparent business procedures, as well as sound corporate governance standards such as having a board of directors.

Compliance with employment laws 

Employers in Iceland are required to abide by all applicable employment rules and regulations, including those governing minimum wages, working hours, and health and safety standards.

Penalties, fines, and legal action may be imposed for failure to adhere to certain compliance rules. It's critical for businesses in Iceland to remain current on all legal and regulatory standards.

Icelandic requirements for business registration

You must fulfil certain requirements in order to register a business in Iceland. The following are some requirements for setting up a business in Iceland:

Company name

Pick a distinctive company name that is not currently in use in Iceland for your organisation. Through the website of the Icelandic Registration of Companies, you can determine whether a company name is available.

Legal structure 

A limited liability company (LLC), a partnership, or a single proprietorship are some examples of legal structures that you can choose for your business. The ownership liability, the tax treatment, and the reporting obligations will all depend on the legal structure you select.

Registered address 

Enter the Icelandic address where your company is registered. For official communication and legal matters, use this address.

Directors and shareholders

Directors and Shareholders Companies in Iceland are required to have at least one shareholder and one director, though the same person may hold both posts.

Initial share capital

You must deposit at least ISK 500,000 as initial share capital for a limited liability corporation (around USD 4,000). This capital may be provided as assets or cash.

Articles of Association 

Write and sign your firm's articles of association, which describe the goals, organisational structure, and operational procedures of the company.

Registration fee 

Payment of the registration cost is required to the Icelandic Registry of Companies. The cost varies according to your company's legal makeup and share capital.

It's crucial to remember that depending on the legal form and the sector in which the company works, different requirements may apply to register a business in Iceland. In order to ensure compliance with all legal and regulatory requirements, it is advised to seek expert guidance from Odint Consulting while registering a business in Iceland.