» Population

The population of Iceland is approximately 280,000, 170,000 of whom live in the capital Reykjavik and surrounding areas.

» Political Structure

Parliamentary democracy. The present Government is a centre-right coalition of the independence Party (P) and the Progressive Party (PP), formed in 1994 and re-elected in 1999. The head of state is the President of Iceland, who has limited powers and is elected in a non-political national election.

» Infrastructure and Economy

Iceland is a developed democracy that enjoys political and economic stability. High level of education, developed and competitive service sectors, first rate telecommunications and a developed bank industry are all factors contributing to a solid infrastructure. Iceland's GDP per capita is one of the highest within the OECD. Iceland is a part of the EEA and EFTA and has close ties with the Scandinavian countries.

» Language

The official and spoken language is Icelandic. Good command of English is general and knowledge of other European languages common.

» Currency

Icelandic Kronur (ISK).

» Exchange Control

No exchange controls are imposed in Iceland although formal reporting requirements are required by the Central Bank these are mainly for statistical purposes. Only Icelanders must give their social security number when exchanging foreign currency.

» Type of Law

Civil Law.

» Principal Corporate Legislation

Acts on Private and Public Limited Companies. Act on International Trading Companies. ITC's are Ehf or Hf companies with special benefits and restrictions specified in a separate act, but are governed by the same Corporate Law.

» Type of Company

Private and Public Limited Company, International Trading Company (ITC).

» Procedure to Incorporate

A registration form is submitted to the Registry of Companies accompanied by the Minutes of the Assembly of Foundation, Certificate of Incorporation and the Articles of Association. The applicant must pay a registration fee and confirm that share capital has been paid. ITC's must go through an application process prior to registration.

» Restrictions on Trading

Yes, specified groups, which include for example, banking, insurance, financial services and ITC's.

» Powers of Company

A Company incorporated in Iceland has the same powers as a natural person.

» Language of Legislation and Corporate Documents

Icelandic.

» Shelf Companies Available

No

» Time to Incorporate

One or two days for Hf and Ehf, two to three weeks for ITC.

» Name Restrictions

A name that is similar to or identical to an existing company. A well-known name that is known to exist elsewhere.

» Language of Name

The name of the company can be expressed in any language using the Latin alphabet. The Registrar may request an Icelandic translation to ensure that the proposed name does not contravene name restrictions.

» Names Requiring Consent or a Licence

Bank, savings, loans, insurance, assurance, reinsurance, fund management, investment fund, trust, trustees, Chamber of Commerce, municipal or their foreign language equivalents or any name in English or a foreign language that may suggest association with the banking or Insurance industries.

» Registered Office Required

Yes, must be maintained in Iceland.

» Suffixes to Denote Limited Liability

Einkahlutafelag (Ehf), private limited company. Hlutafelag (Hf) public limited company, Alþjóðlegt viðskiptafélag or ITC (av.).

» Disclosure of Beneficial Ownership to Authorities

Hf requires that shares be registered to a person or entity. Ehf does not have to issue shares but needs to keep its own register of shares.

» Authorised and Issued Share Capital

Private Company - The minimum share capital is ISK 500,000 and must be fully paid. Public Company - The minimum share capital for a is ISK 4,000,000 and must be paid up. If the capital of a Public Company exceeds this amount, the minimum paid in is 4 million, or half of the total.

» Classes of Shares Permitted

Ordinary shares, preference shares, deferred shares, redeemable shares and shares with or without voting rights.

» Taxation

Taxation is paid by companies based on annual accounts, which are submitted to the tax authorities at the end of the company's fiscal year. A company is free to choose its own year-end but must apply for an exception if it is not the calendar year. The current tax rate is 18% for limited companies and 5% for ITC companies who are also exempted from net worth tax and stamp duties.

»Double Taxation Agreements

Iceland has 15 ratified double taxation agreements and several pending ratification.

» Licence Fees

None except for ITC companies, ISK 100,000.

» Financial Statement Requirements

All Icelandic companies are required to file accounts. Public Companies require an audit by a State Authorised Public Accountant, but Private Companies require an inspector.

» Directors

Companies with less than 3 shareholders require a minimum of one director; otherwise the minimum number of directors is three. A Public Company requires at least three Directors and a Managing Director. Majority of Directors must have permanent residence in Iceland or an OECD country.

» Company Secretary

Not required

» Shareholders

The minimum number of shareholders is one for a private company and two for a public company.

» International Trading Companies

An International Trading Company is an Icelandic Limited Company that meets certain conditions and is granted a special Operating Licence. ITC's pay 5% income tax and are exempt from net worth tax and stamp duties. The Operating Licence and annual renewal fee is ISK 100,000. Applications for ITC status must include a Business Plan, the Articles of Association and information on founders, directors and managers.
Some applications of an ITC as a holding company are:

owning shares in foreign enterprises.

owning and registering aircraft and ships and leasing such assets.

owning and investing in intangible assets such as Trademarks, Patents, Design     rights and Publishing rights.

Trading and service applications:

acting as an intermediary in the trading of products and services.

trading in fish and seafood products as well as some agricultural products     (expansion of product categories is being considered).

Trans-shipment of goods through Iceland.
Some restrictions:

trading in or exporting goods, services or valuables originating in Iceland.

trading in goods other than seafood products and some agricultural products.

processing of goods, which changes their country of origin.

holding of shares in Icelandic enterprises.