Corporate Law at Iceland
Here’s a clear overview of Corporate Law in Iceland — key points about company types, governance, and regulations:
🇮🇸 Corporate Law in Iceland
Iceland’s corporate law is governed mainly by the Companies Act No. 2/1995, with amendments and supplementary laws. The legal framework aligns closely with EU standards (although Iceland is part of the EEA, not the EU).
🏢 Types of Business Entities
Private Limited Company (Einkahlutafélag - ehf.)
Most common for small to medium businesses.
Minimum share capital: ISK 500,000 (~€3,500).
Shareholders’ liability limited to their investment.
Public Limited Company (Hlutafélag - hf.)
For larger companies, can be publicly traded.
Minimum share capital: ISK 4,000,000 (~€28,000).
Subject to stricter corporate governance rules.
Sole Proprietorship
Owned by one individual with unlimited liability.
Partnerships
General partnerships and limited partnerships available.
⚖️ Corporate Governance
Private limited companies (ehf.) require a board of directors; no supervisory board is mandatory.
Public limited companies (hf.) must have a board of directors and a supervisory board.
Shareholder meetings are essential for decision-making.
Directors have fiduciary duties and must act in the company’s best interests.
📋 Registration & Compliance
Companies are registered with the Register of Enterprises (Fyrirtækjaskrá) managed by the Directorate of Internal Revenue.
Must file annual financial statements prepared according to Icelandic accounting standards or IFRS.
Public companies have more rigorous reporting requirements.
💰 Taxation
Corporate tax rate: 20%.
Dividend withholding tax applies with certain exemptions for EEA investors.
🌍 Foreign Investment
Iceland welcomes foreign investors with equal treatment as locals.
No major restrictions on foreign ownership in companies.
Summary Table
| Aspect | Details |
|---|---|
| Main company types | Private limited (ehf.), public limited (hf.), sole proprietorship, partnerships |
| Minimum capital | ISK 500,000 (ehf.), ISK 4,000,000 (hf.) |
| Governance | Board of directors (ehf.), board + supervisory board (hf.) |
| Registration | Register of Enterprises |
| Corporate tax rate | 20% |
| Foreign investment | Allowed without major restrictions |
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