One of the major kind of business structure in Iceland is a Limited company. Some of the other business structures which you can get are official limited companies, cooperative societies, partnerships and businesses which are usually run by branches of foreign companies and self-employed individuals
Company Formation in Iceland – Forms
Limited companies and branches for foreign companies
In Iceland, you will usually get two kind of limited companies which are either private or public. Any foreigner who wishes to invest his/her business in Iceland will go for a branch or limited company due to tax considerations. The limited companies must be registered with the Register of Enterprises.
i) Public limited company
Have at least 2 founders – one must reside in Iceland, be a resident or citizen or OECD or EEA country (European Economic Area).
ii) Private limited company
Founded by one or more people – One can reside in Iceland, both can be residents of OECD or EEA country. You can have as many shareholders as you wish.
Any time that a limited company is established, the stakeholders must prepare a Memorandum of Association. The M&AA contains the following:
- Names and address of all the founders
- Payment of capital. Subscription fees for the shares and price
- Deadline for the subscription of membership
The draft of articles of association will also contain so many things such as:
– Name of the company
– Share capital
– Board of directors
– Legal venue
– Periods when a financial year is supposed to start and end.
Branches of foreign companies
They must meet the following criteria:
- Be registered for internal revenue at the Register of Enterprises department.
- The company head office must properly file the documents listed below usually in the Icelandic translation.
- The registration certificate of the head office
- The copy of Articles of Association of the head office.
- Well prepared financial reports for the following financial year.
- It must have a name that includes its foreign name.
- A letter indicating the representation of the branch manager. There must also be documentation which indicates that the branch manager meets all the requirements such as solvency citizenship and residency.
- A well-written commitment letter that they will obey all the Iceland laws.
Company Formation in Iceland – Steps
The Process which is involved when incorporating a company in Iceland
- Creating the name of the company which usually takes one business working day.
- Depositing capital into the business account of the company which also can take one day.
- Registration of the company with the register of companies. This also will involve the publication of the company in an official gazette bearing the notice of the incorporation. Getting these services can cost you around 95000 ISK.
- In case you wish to start a company where you will be selling goods and services which have a value of more than 500,000 ISK within a year, then you must get a VAT number. You can get it within couple days.
- Notification of tax authorities if the staff that you wish to employ.
Offshore company as an alternative
In case you decide to set up an offshore company, then as an investor or business owner, you can conduct your business with your operation boundaries. These kinds of companies are usually established to lower taxes and fees. The business owners are required to follow all the rules regarding offshore companies.
There are so many benefits that you can get once you start an offshore company one of them being reduced fees and tax as mentioned above. You can also decide to go for an offshore company to achieve the following:
Protect your asset – In case you wish to organize your transactions and assets in the best way such that they are not affected by your liability, then this is the best formation you can choose.
Legal protection – Since there are some laws which favour offshore companies, you will be liable only for them and not anything outside your area of operation.
Assume anonymity -Usually the names of the directors and owners are not meant to achieve public records. Also, any references to the company will be available to registered agents only.
Simplify set-up – Can make it easy for you to easily start a business that you have always yearned for.
Some of the major places where you can establish your offshore company are; Panama, British Virgin Islands, Cyprus, The Cayman Islands, Dubai and Bahamas.