Business & Corporate · Iceland
Company formation in Iceland — legal support from day one
Setting up an enterprise in Iceland means registering with the right bodies, obtaining the kennitala that every business needs, and getting the documents right under Icelandic statute. We match you with Icelandic legal counsel who works on company formation and the questions that follow — ownership, contracts, employment and succession.
- Free, non-binding matching: you choose the counsel you work with
- Practitioners who know Icelandic registration, contracts and corporate structure
- Clear guidance on the kennitala, Registers Iceland and EEA trade
Free of charge · No obligation · Typical first response within 24–48 hours
Get matched with a lawyer
Tell us about your situation and receive a free, confidential case review.
Setting up in Iceland
Company formation in Iceland: what you are actually dealing with
Setting up a business in Iceland means working with a system that is compact, statute-driven and highly digital. Every enterprise in the country receives a ten-digit identification number, the kennitala, recorded in the register of enterprises maintained by Registers Iceland (Þjóðskrá Íslands). That number is required for opening accounts, signing contracts and filing documents, so it sits at the centre of the whole process rather than at its margins. Iceland is not an EU member state, but through the EEA Agreement it takes part in the single market, which matters if you trade, hire or move capital across borders. Because Icelandic law rests on statutes adopted by the Althing rather than on case law, getting the structure right at the start saves time and cost. We match you, free of charge, with Icelandic legal counsel who handles company formation in Iceland.
Iceland in practice
How company formation works in Iceland
Iceland’s legal and administrative system is compact and built on statute, and a handful of features shape every new business. The notes below set out what is specific to Iceland and why local counsel matters when you register.
The kennitala is the first practical step
Every person and every enterprise in Iceland is issued a unique ten-digit identification number, recorded in the national register and the register of enterprises maintained by Registers Iceland (Þjóðskrá Íslands). It is required for almost all legal and administrative acts, from opening accounts and signing contracts to filing documents, which is why registration and the kennitala move together.
The governing rules come from statute
Iceland follows the Nordic legal tradition, a branch of civil law in which comprehensive statute adopted by the Althing is the primary source of law, supplemented by ministry regulations, rather than judicial precedent. Statutes are published in Stjórnartíðindi and are freely accessible in the Althing’s legal database, Lagasafn — so the text governing your registration can be read directly.
Inside the single market, outside the EU
Iceland is not a member of the European Union but is closely integrated through the EEA Agreement, in force since 1994, which unites the EU member states and the three EFTA-EEA states in a single market with the four freedoms of goods, capital, services and persons and common competition rules. Iceland has also applied the Schengen Agreement in full since 25 March 2001.
Rights of audience are graduated
Iceland operates a graduated system of rights of audience. A district-court licence allows appearances before the eight District Courts, a further licence is required to plead before the Court of Appeal (Landsréttur), and a separate, highest licence is needed before the Supreme Court (Hæstiréttur). Only licensed holders may make oral presentations before the courts.
Fees are agreed; court fees are tariffed
There is no binding official tariff for professional fees in Iceland; remuneration is a matter of agreement between the practitioner and the client. Practitioners must hold clients’ funds in separate trust accounts and carry professional indemnity insurance, supervised by the Icelandic Bar Association. Court fees are separate, set under the Act on Court Fees, with each District Court invoicing its own tariff on filing.
Succession shapes who ends up owning the business
Under the Inheritance Act No. 8/1962, a surviving spouse and the children or their descendants are forced heirs (skylduerfingjar). Where a spouse and children survive, the spouse takes one third and the children two thirds, and a testator with a spouse or descendants may dispose of only one third of the estate by will. Founders should plan ownership accordingly.
The country-specific statements on this page are drawn from official Icelandic bodies, the Icelandic Bar Association and Council of Europe material, consulted in 2025.
- Registers Iceland — ID numbers (kennitala)
- Government of Iceland — The judicial system in Iceland
- Icelandic Bar Association — Requirements to practise law and the three judicial levels
- Icelandic Bar Association — About the association
- Government of Iceland — Legal aid in Iceland: basic information
- Act No. 150/2007 on the limitation periods for claims
- Inheritance Act No. 8 of 14 March 1962
- Ísland.is — Legal separation and divorce
- Ísland.is — Inheritance issues
- Ministry for Foreign Affairs — Iceland in Europe
- Council of Europe — Country profile: Iceland
Common problems
Where new businesses get stuck in Iceland
These are the practical points that slow down or complicate a fresh registration.
The kennitala comes first
Almost every act — opening an account, signing a lease, filing a document — depends on a ten-digit identification number. Plans stall when founders treat it as an afterthought instead of the opening step.
The rules live in statute, not in case law
Icelandic law is driven by statutes adopted by the Althing, published in Stjórnartíðindi and readable in Lagasafn. Without guidance it is easy to assume that practice here mirrors another European country.
The cross-border position is unusual
Iceland sits inside the EEA single market but outside the EU, and applies Schengen in full. Hiring, capital and contracts that cross borders need to be structured with that distinction in mind.
Why match with us
A calmer route into the Icelandic market
One short request, and you speak to counsel who already know how things work locally.
Local knowledge checked against official sources
Our Iceland pages are built on official Icelandic bodies, the Icelandic Bar Association and Council of Europe material, so the context you read reflects published sources rather than assumptions.
Counsel across the levels of the Icelandic courts
Rights of audience in Iceland are graduated by court level. We match you with practitioners whose licence fits the work you need, from district-level matters upwards.
Costs agreed directly, not hidden in a tariff
There is no binding official tariff for professional fees in Iceland; remuneration is agreed between you and the practitioner. You see the basis of charging before you commit.
Support well beyond registration
Company formation is rarely a single document. Ownership, employment terms, commercial contracts and succession planning all follow, and the same counsel can stay with you through them.
Elsewhere in Europe
Compare other jurisdictions
If you are weighing up where to incorporate, these country pages cover the same ground for neighbouring and closely connected markets.
Questions
Company formation in Iceland: frequently asked questions
What does company formation in Iceland involve in practice?
In practice you are dealing with two strands: registration of the enterprise, which sits with Registers Iceland, and the legal work around it — ownership and shareholder arrangements, commercial contracts, employment terms and any cross-border element. Because the rules are set out in statutes, sequence matters. Icelandic counsel can confirm what your particular structure requires before you commit.
Do I need a kennitala before I can operate?
Every person and every enterprise in Iceland is issued a unique ten-digit identification number, recorded in the national register and the register of enterprises kept by Registers Iceland. It is required for almost all legal and administrative acts — opening accounts, signing contracts, filing documents — so it is effectively the gateway to operating rather than a technicality.
Is Iceland in the European Union, and does that matter for a new company?
Iceland is not an EU member state, but the EEA Agreement, in force since 1994, integrates it with the EU member states and the other EFTA-EEA states in a single market resting on the four freedoms and common competition rules. Iceland has also applied the Schengen Agreement in full since 25 March 2001.
Can a company obtain legal aid in Iceland?
No. Legal aid is granted under Chapter 20 of the Act on Civil Procedure No. 91/1991 and Regulation No. 45/2008 to individuals rather than companies, by the Ministry of Justice on the recommendation of an independent Legal Aid Committee of three practitioners. A business should therefore plan from the outset to cover professional fees privately.
How are professional fees in Iceland set?
There is no binding official tariff for professional fees: remuneration is a matter of agreement between the practitioner and the client. Court fees work differently — they follow the Act on Court Fees, and each District Court keeps its own tariff, invoiced and payable when a case is filed. Ask for the basis of charging in writing.
Why use a matching service instead of approaching firms directly?
Because Icelandic practice is specialised. Rights of audience are graduated — a district-court licence, a further licence for the Court of Appeal (Landsréttur) and a separate highest licence for the Supreme Court (Hæstiréttur) — and not every legal professional is licensed to plead. Matching helps you reach counsel whose competence fits your matter.
Next step
Tell us what you are setting up
Describe your project in a few lines — the structure you have in mind, where the founders are based, and what you need to resolve first. We match you with Icelandic legal counsel who handles company formation, free of charge and with no obligation on your side.