Best Investment & Business Structuring Lawyers in Iceland

1. About Investment & Business Structuring Law in Iceland

Investment and business structuring law in Iceland governs how businesses are formed, financed and reorganized. It covers corporate forms, governance requirements, and the rules for cross-border investments and funding arrangements. Practitioners also navigate regulatory filings, licensing, and disclosure obligations that affect commercial transactions. The Icelandic framework is shaped by the Icelandic Parliament and supervisory authorities, and is influenced by the country’s status as a member of the European Economic Area (EEA). For cross-border matters, Iceland aligns with relevant EU/EEA directives through the EEA framework. EEA cooperation helps harmonize many investment and market standards with other member states. Alþingi provides current texts of the governing laws, while the Financial Supervisory Authority oversees market conduct and licensing. Statistics Iceland and official government resources underpin practical compliance information for business structuring.

Key practice areas include company formation and governance, shareholding and exit arrangements, investment vehicle design, regulatory licensing of financial services, and global tax planning considerations under Icelandic law. Recent trends emphasize improved governance standards, enhanced disclosure, and tighter supervision of investment firms to align with European practices. For authoritative texts, consult the Icelandic Parliament and regulator sites listed in the references below.

Sources and further reading: Alþingi for legislation, Fjármálaeftirlitið for financial market regulation, and EEA framework.

2. Why You May Need a Lawyer

Engaging a lawyer early can prevent costly missteps in Icelandic investment projects and restructurings. Below are concrete scenarios where specialized legal counsel adds value with Iceland-specific insights.

• Setting up a new Icelandic entity for a geothermal project - A foreign investor wants a local company to own and operate a project. A lawyer can advise on choosing between a private limited company (einkahlutafélag) and a public company (hlutafélag), draft governing documents, and align with local regulatory approvals.
• Negotiating a cross-border joint venture with Icelandic partners - A joint venture requires a robust shareholder agreement addressing minority protections, transfer restrictions, and exit rights under Icelandic corporate law. An attorney helps tailor structures to meet both local law and investor expectations.
• Acquiring Icelandic assets or a target company - M&A due diligence in Iceland covers corporate, tax, employment, and regulatory risks. A local lawyer coordinates with Icelandic counsel, reviews disclosures, and structures the deal to minimize post- closing disputes.
• Launching a fund or investment vehicle in Iceland - Investment funds and fund management require compliance with sector-specific rules and licensing. Legal counsel guides entity design, eligibility, and ongoing reporting obligations to the supervisory authorities.
• Regulatory licensing for an investment advisory or brokerage business - The Financial Supervisory Authority governs licensing, capital requirements, and conduct rules. A lawyer prepares applications, risk disclosures, and ongoing compliance programs.
• Reorganizing a group for tax efficiency and governance - Restructuring a multinational with Icelandic affiliates involves cross-border tax considerations, transfer pricing, and local corporate governance requirements. Counsel coordinates multi-jurisdictional steps and document preservation.

In all scenarios, working with a local attorney helps ensure compliance with Icelandic law and reduces the risk of regulatory penalties or delays. A lawyer can also facilitate negotiations with Icelandic partners, banks, and authorities. For cross-border matters, you should coordinate with counsel experienced in both Icelandic law and international transactions.

3. Local Laws Overview

The Icelandic framework for investment and business structuring rests on a few central statutes and regulatory instruments. Key statutes govern corporate forms, market conduct, and investment vehicles used in Iceland.

• Lög um hlutafélög (Companies Act) - Governs formation, share capital, governance, and corporate actions for Icelandic companies. It sets rules on board composition, shareholder rights, and distributions. See current text on Alþingi.
• Lög um verðbréfaviðskipti (Securities Markets Act) - Regulates trading of securities, licensing of brokers, and market conduct under the oversight of the Financial Supervisory Authority. Regulatory guidance and licensing requirements come from Fjármálaeftirlitið.
• Lög um fjárfestingarsjóði (Investment Funds Act) - Regulates collective investment schemes and their managers. This statute is particularly relevant when structuring investment vehicles that pool capital from investors. Guidance and enforcement fall within the supervisory framework in Iceland.

Recent changes in Icelandic investment and business structuring law focus on aligning governance and investor protections with EU/EEA standards, improving transparency, and clarifying roles for supervisory authorities. For precise current text and amendments, consult official sources.

Sources and further reading: Alþingi, Fjármálaeftirlitið, EEA framework.

4. Frequently Asked Questions

What is the scope of investment and business structuring law in Iceland?

It covers how entities are formed, capital structures, governance, and arrangements for financing and reorganizing businesses. The rules also govern cross-border investments and the design of investment vehicles. You should consult an Icelandic attorney when planning complex corporate actions.

How do I start a company in Iceland and what form should I choose?

You typically choose between a private limited company (einkahlutafélag) or a public limited company (hlutafélag). After choosing, you prepare articles of association, appoint directors, and file the formation documents with the appropriate registry. A local lawyer can help tailor the structure to your business and tax goals.

What is the typical cost to set up a company in Iceland?

Costs vary by form, complexity, and service provider. Expect registry fees, notary or filing costs, and professional fees for drafting documents and filings. A fixed-fee package from a local solicitor is common for straightforward formations.

How long does company registration take in Iceland?

Registration typically takes several business days to a few weeks depending on completeness and regulatory checks. Expedited processing options may apply for urgent cases. A lawyer can help prepare filings to avoid delays.

Do I need a local lawyer for cross-border investments in Iceland?

Yes. Local counsel understands Icelandic regulatory expectations, language, and business culture. They can coordinate with foreign counsel and manage filings, licenses, and due diligence. This minimizes risks and accelerates closing timelines.

What is a shareholder agreement and when is it required?

A shareholder agreement sets out rights, protections, and exit mechanisms among owners. It is essential in any joint venture or minority investment to prevent disputes. Icelandic practice usually includes such agreements for close-held companies and startups.

Can a foreigner own an Icelandic company and assets?

Foreign ownership is generally allowed but may be subject to sector-specific restrictions. Some asset types and land transactions have additional rules. A local lawyer can confirm any restrictions for your case.

What is MiFID II and how does it apply in Iceland?

MiFID II applies to investment services in Iceland as part of the EEA framework. It governs licensing, conduct of business, and client protections for investment firms operating in Iceland. Compliance requires careful policy and procedure design.

Should I consider using a special purpose vehicle for project finance in Iceland?

SPVs are common for project finance to isolate risk and simplify financing. A lawyer will advise on jurisdiction, tax treatment, and governance. Proper structuring can optimize liability and regulatory compliance.

What is the typical timeline for a due diligence process in Icelandic M&A?

Due diligence usually spans 4-8 weeks, depending on target complexity and cooperation. A detailed plan with milestones helps align expectations and ensures timely closing. Cross-border deals may require additional regulatory checks.

Is there a difference between a private and public company in Iceland?

Yes. A public company (hlutafélag) can offer its shares publicly and typically requires higher capital and governance standards. A private company (einkahlutafélag) has more limited share transfers and simpler governance. The choice affects compliance and financing options.

How do I navigate regulatory licensing for investment advisory in Iceland?

Licensing generally falls under the Financial Supervisory Authority. You need a clear business plan, fit-and-proper assessments, and ongoing reporting requirements. A lawyer helps prepare license applications and compliance programs.

What is the difference between a transfer of shares and an asset sale in Iceland?

Share transfers involve purchasing equity interests and may trigger different tax and regulatory consequences than asset sales. Each path affects liability, contracts, and regulatory approvals. A lawyer can advise on the preferred route for your transaction.

5. Additional Resources

• Alþingi - Official source for Icelandic legislation and amendments. Access current and historical acts and readings on the Parliament's site. Alþingi.
• Fjármálaeftirlitið (FME) - Regulator of Icelandic financial markets and licensing for investment services and brokers. Guidance on licensing, supervision, and market conduct. FME.
• Invest in Iceland - Government-supported resource with practical guidance on starting and growing a business in Iceland, including investment incentives and sector-specific considerations. Invest in Iceland.

6. Next Steps

1. Define your structuring goals and shortlist the business activities, jurisdictions, and ownership skeleton you plan to use in Iceland. Establish a preliminary budget and timeline.
2. Identify a qualified Icelandic attorney or law firm with relevant sector experience (corporate, tax, and regulatory). Request a written scope of work and fee structure.
3. Prepare a document package for initial consultations, including entity ideas, shareholding plans, and any regulatory or licensing questions. Share this with your prospective counsel for a tailored engagement plan.
4. Schedule an initial strategy session to review the proposed structure, regulatory considerations, and potential tax implications. Confirm required licenses or registrations with the relevant authorities.
5. Obtain and compare engagement letters outlining deliverables, timelines, and costs. Ensure the agreement covers due diligence, negotiations, and closing stages.
6. Begin drafting or reviewing formation documents, shareholder agreements, and any cross-border agreements. Coordinate with local and foreign counsel as needed.
7. Implement the chosen structure with phased milestones, ensuring compliance with ongoing reporting, licensing, and governance requirements. Plan for a post-closing review to address any gaps.