Private Limited Company (ehf)

The table below details the typical procedures, time and cost requirements to register a small-to medium-sized Private limited company online to start up and formally operate in Iceland. Although the registration should only take 4-5 days to process, those who start a business must report it to the Directorate of Internal Revenue, no later than 8 days before the start of operations.



Time to complete

Associated costs


Search for company name 
Agency: Register of Enterprises

You need to verify that the business name you want to register for your business is free and does not already exist.

Enter the company name of the company to be established, its legal domicile and founding date. The computer system will check to see if there are any company names or trademarks on the list that could possibly prevent the listing of the new company. This is a simple search only and RSK employees will look more closely at the company name when the data is processed. Although there is no indication of possibly too similar a company name, it does not have to mean that the company name will be approved. Foreign extras can be registered but it must be the direct translation of the Icelandic main name of the company.

You can also register a special postal address if the mail is not to go to the company’s domicile. If the address is in the home of another company or person, it is good to register with another party (reach out). The identity number of the person / company must be entered. 

Less than one day (online procedure)

no charge


Apply for registration with Register of Enterprises 
Agency: Register of Enterprises 

To register your business with the Register of Enterprises, you must first register for electronic identification.

Once you have your electronic ID you can register your Private limited company by logging in to your RSK account. 
Click on General from the top menu and you will get a drop down menu. Click Sign up under the Business header of the drop down menu and you will be taken to an online form which will prompt you with the relevant business information details that you need to fill out. RSK have created a video of the process (in Icelandic) that you can watch here.

In order for the registration to be approved, you must submit information about the company’s owners. This is done by filling out a separate form RSK 17.27. You submit the completed form with a 5 digit application number that you are assigned and prompted with on the opening page of the application form. The RSK processing form must be submitted with the 5 digit application number or scan it and send to

The online business registration application will take you through a series of pages to fill out information related to the company being established.:
1. Enter details regarding founders and shareholders 
2. Enter details about the business purpose
3. Enter additional details such as share amounts and voting rights 
4. Upon completing the registration, the company’s founding documents are automatically prepared by RSK
5. Once the initial documents have been approved they will be saved and emails will be sent to all parties who need to sign the documents electronically
6. They will receive a message to their phone asking them to enter their pin number to complete the registration
7. Payment of registration fees and notification fees are sent to your bank account

The company’s founding documents are automatically prepared by RSK, but you can also upload your own initial documents.
The founding documents consist of the notification, articles of association, charter or founding order by number of founders and founding or founding meeting by number of founders.

The register is also in charge of advertising the incorporation notice in the Official Gazette, the official journal. The total registration fee is ISK 131,000 which includes the company identification number (ISK 5,000), and the fee for publishing the notification in the Official Gazette (ISK 1,000). 

1 day

no charge


Deposit initial capital in bank account 
Agency: Commercial Bank

Claims for payment of registration fees and notification fees are now sent directly to the registrar’s home bank and payment registration fees are only carried out in this way. The ISK 500,000 minimum share capital must exist and be in the bank account of one of the founders of the company until the company is registered and a business bank account has been opened. The registration fee payment ISK 131,000 can be deducted from the ISK 500,000 minimum share capital, and the remainder of the minimum share capital can be withdrawn and used as soon as the company has been registered and received the new company kennitala. 

The registration process should take between 4-5 days to complete once the payment has been made. The registrant no longer has to transfer the registration fee to the Director of Internal Revenue. If a registrar does not have a home bank, you can select another payer at the last stages of registration.

Once all the documents have been signed and the registration fee paid, the data is submitted to the employees of the RSK business registers who either record the data or request corrections if necessary. 

Between 4-5 days

ISK 131,000


Obtain a VAT number
Agency : Directorate of Internal Revenue

Exempt from the obligation to register for VAT are those who sell labor and services that are exempt from VAT and those who sell taxable goods and services for 2.000.000 ISK or less in each twelve-month period from the beginning of their business activity (was 1.000.000 ISK before January 1st 2017). The registration duty does not apply to employees. 

Applicants can notify the Directorate of Internal Revenue online by logging into with their web key and filling out form 5.02 (download English translation guidance instructions for completing the form here). The signed form and notification can also be sent via email to the Register of Enterprises or by visiting the offices of the Director of Internal Revenue at Laugavegur 166, 105 Reykjavík. 

The Director of Internal Revenue will then assign the applicant company with a VAT number which the company shall use in it’s economical activities.

Notify tax authorities of employment of workers 
Applicants can notify the Directorate of Internal Revenue online at the same time using the same form 5.02.

Withholdings from employment income are covered under the PAYE system. An employer has a monthly reporting obligation, as well as a withholding obligation related to income. In addition, employers are obligated to pay an insurance tax / social security tax. In the 2020 tax year, the insurance tax rate is a total of 6.35% . Of this, the insurance premium itself is 4.90%, the employment insurance premium is 1.35%, and then a supplement is added to the Guarantee Fund (0.05%) and the market fee (0.05%).

Employers are required to calculate and deduct taxes from all salaries and wages paid out to employees. Taxable income includes, for example cash payments, wages, fees, sickness allowance and benefits in kind. Employers are also obliged to deduct mandatory (and voluntary) fees to workers unions, pension funds as well as to pay wage-related expenses. 

There is an interactive payroll calculator in English where employers can calculate anything regarding salaries and compensations of employees.

Less than one day (online procedure)

no charge