It is relatively simple to establish a company in Iceland. It is important, however, that the legal form of the business is suitable for the company's activities.
Public limited companies/publicly owned companies/private limited companies.
Anyone starting a business in Iceland must have an identification (ID) number, which is a ten-digit number. The ID number serves as a gateway to Icelandic society.
Work permits or operating licenses are referred to by various names e.g. surveillance, journeyman's examination, masters examination and state-authorisation. Information and applications for operating permits are available on the websites of the relevant ministries, institutions and local governments.
For certain kinds of operations, you need to request the opinion of the Icelandic Occupational Safety and Health Administration.
The tax rules for operating a business may differ, as may the rules governing accounting and financial statements, the responsibility of the owner, decision making and initial cost.
Anyone starting a business is required to report to the tax authorities.
The payment of various taxes and levies on wages paid or calculated.
When a legal entity (i.e. a company or business) becomes bankrupt, the debtor's bankruptcy estate takes over all financial rights and obligations.
Employers/payers are self-employed. It is, from a tax standpoint, an activity involving financial risk and responsibility, independent of others, and operated on a commercial basis.
When engaging employees, the employer/payer undertakes various obligations which involve trade unions, pension funds and public authorities, to name a few.
Employment contracts are generally based on collective wage agreements. It provides for minimum working-conditions and various rights concerning wages, working hours, holidays and holiday allowances, etc.
The employer/payer must account for wage-related taxes and surtaxes, and must report to the tax authorities. The employer must also account for various other taxes and charges related to operating activities.
The keeping of accounts is mandatory, whatever the legal form of business.
It is mandatory for the employer to make sure that the facilities and health and safety in the workplace are in order, and the employer must work toward this in collaboration with the employees.
Iceland is divided into health surveillance areas, which are under the supervision of the municipal authorities in each location. The head supervisory authority is the Environment Agency of Iceland.
Employers are obligated to prepare reports on occupational accidents suffered by employees and to submit the reports to the Occupational Safety and Health Authority.