Company formation in Iceland
Establishment of a company in Iceland is a five-step process:
1. Create a company name using company name database.
2. Deposit capital on company's bank account.
3. Registration in company register.
This process includes publication about company's registration in the official journal.
Fees are around 95,000 ISK (Iceland kroner).
4. For companies that plan to sell goods or services worth 500,000 ISK and over a year, must obtain a VAT number.
5. Notification of tax authorities about employment of any employee.
The most common type of business in Iceland is a limited liability company.
Other types are partnerships, cooperatives, official limited liability companies, enterprises run by self-employed persons and branches of foreign joint-stock companies.
Foreigners investing in Iceland decide to set up limited liability companies or branches of limited liability companies.
Tax conditions have always played a big role in this decision.
By choosing LLC, you can start company registration in Poland at any time.
In addition, form of company offers limited liability benefits, while partnerships involve full and unlimited liability for all partners.
Limited liability companies and branches of foreign enterprises
There are two types of limited liability companies in Iceland public and private.
Foreigners investing in Iceland usually decide to set up limited liability companies or branches for tax reasons.
In addition, form of company offers benefits with limited liability, while partnerships have full and unlimited liability for all partners.
LLC companies and branches are registered at tax office in the business register.
Procedures establishing a joint-stock company
A joint-stock company must have at least two founders, one of which must be in Iceland or be a resident and citizen of a European Economic Area or OECD country.
A private company can be founded by one or more people, one of whom must be in Iceland or be both a citizen and resident of the EEA or OECD country concerned.
There is no limit to the number of shareholders.
Statute for limited liability companies
When establishing a limited liability company, a draft statute must be prepared containing: names and addresses of the founders, price of subscription of shares, date of subscription and payment of capital.
The draft statute should include: name and location of company, share capital, directors, place where the meetings of partners took place, auditors, financial year.
Public companies must be registered in company register within six months of the date of the statute.
Private limited companies must be registered within two months.
Branches of foreign companies
Branches of limited liability companies must be registered in tax office in the business register and company's headquarters must submit the following documents (translated into Icelandic): a copy of company's statute, a document confirming the existence of company, a written commitment to comply with Icelandic law and jurisdiction, a letter to the head of the department together with with documentation that the branch manager meets the requirements regarding residence, citizenship and solvency, financial statements for year preceding the opening of the branch.
The registered branch must have a name that includes name of the foreign limited liability company.
Deciding to establish offshore business owners and investors can set up businesses outside the jurisdiction of their operations.
Foreign companies are traditionally, but not exclusively, registered for lower fees and taxes.
Business owners must comply with offshore jurisdiction rules and may not operate in jurisdiction.
The benefits are huge.
Reduced taxes and fees are often a big factor when considering the location of an offshore company.
The company can also choose offshore locations:
- for easier installation and maintenance
- entrepreneurs want smaller bureaucracy and smaller obstacles in offshore jurisdictions
- anonymity - the names of owners and directors are not publicly available
- legal protection - the company is only subject to offshore company law
- property protection - business owners can choose to organize their assets and transactions in a way that protects them against liability.
Requirements for offshore company: articles of association and company statute, registration confirmation, registered office / agent, shareholders, directors, company secretary, statutory register, accounting.