Best Investment & Business Structuring Lawyers in Reykjavik

1. About Investment & Business Structuring Law in Reykjavik, Iceland

Investment and business structuring law in Reykjavik covers how individuals and organizations form, reorganize, and operate businesses within Iceland. It includes setting up company structures, ownership arrangements, governance, and compliance with financial and corporate regulations. Practitioners often navigate corporate formation, mergers and acquisitions, financing, and cross-border investment considerations.

In Iceland, practical practice centers on the Icelandic Companies Act, tax rules, anti money laundering requirements, and sector specific regulations for financial services and real estate. A local attorney can help tailor structures to protect liability, optimize taxation, and ensure ongoing regulatory compliance. This guide uses Reykjavik as the focal point for residency-based procedures and local registry requirements.

Key realities for investors and business owners include the need to align corporate governance with local rules, to disclose beneficial ownership where required, and to address KYC/AML obligations for financial transactions. Understanding these foundations helps prevent costly delays in formation, licensing, or cross-border investments.

Source: Alþingi - Lög um hlutafélög (Companies Act) - guidance on formation, governance, and dissolution for Icelandic companies. https://www.althingi.is

Source: Skatturinn - Icelandic Tax Administration - information on corporate taxation and compliance. https://www.skatturinn.is

2. Why You May Need a Lawyer

Engaging a lawyer is essential in Reykjavik for specific, real world scenarios that frequently arise in investment and structuring. The following examples illustrate concrete situations where legal counsel adds value.

• Setting up a new ehf (private limited company) to conduct a Reykjavik tech venture. A local attorney helps determine the optimal ownership structure, capital requirements, and funding rounds, while ensuring proper registration and reporting to the Icelandic Register of Companies.
• Negotiating a cross-border acquisition of a Reykjavik-based software company. An attorney handles due diligence, share transfers, regulatory approvals, and integration planning, reducing post-closing disputes.
• Structuring real estate investment through a clean SPV (special purpose vehicle). A lawyer helps create the SPV, align with tax planning, and manage liability protections for Icelandic property investments.
• Complying with anti money laundering and know-your-customer rules during a Nordic holding company setup. Counsel coordinates with financial institutions and regulators to meet AML/CTF requirements.
• Designing an employee stock option plan for a Reykjavik startup. Legal counsel clarifies tax efficiency, eligibility, vesting, and withholding obligations under Icelandic law.
• Advising on regulatory licensing for investment funds or financial services subsidiaries. A local attorney interprets requirements from the Financial Supervisory Authority (FME) and relevant sector rules.

3. Local Laws Overview

This section highlights 2-3 regulatory pillars that govern investment and business structuring in Reykjavik. It includes names of statutes and notes on recent developments where applicable.

Companies Act (Lög um hlutafélög) - The primary regulation governing formation, governance, and dissolution of Icelandic public and private companies. It applies to shareholding structures, board duties, and shareholder rights. The act is frequently amended to reflect governance standards and market practices.

Income Tax Act and Corporate Tax regime (Lög um tekjuskatt / corporate taxation) - Dictates how Icelandic resident and non-resident entities are taxed and sets the corporate tax rate. Current practice commonly references a corporate tax framework around twenty percent, with guidance issued by the Tax Administration on filing and obligations.

Anti Money Laundering and Countering the Financing of Terrorism (AML/CTF) Regulations (Lög um peningaþvætti og fjármögnun glæpa) - Establishes customer due diligence, reporting obligations, and beneficial ownership requirements for business entities and financial services. Iceland aligns its AML/CTF regime with international standards and EU guidance through domestic regulation and supervision.

Recent trends indicate enhanced transparency and reporting expectations for beneficial ownership and cross-border investment flows, along with ongoing updates to align with international frameworks. Always verify the latest consolidated versions of statutes with a local practitioner.

Source: Alþingi - Lög um hlutafélög (Companies Act) - latest consolidated versions and amendments. https://www.althingi.is

Source: Skatturinn - Guidance on corporate taxation, filing, and rates for Icelandic businesses. https://www.skatturinn.is

Source: Fjármálaeftirlitið (Financial Supervisory Authority) - AML/CTF supervisory guidance and regulatory expectations for financial services and investment activities. https://www.fme.is

4. Frequently Asked Questions

What is the basic difference between hf and ehf in Iceland?

hf (public limited company) is a share-issuing entity suitable for larger ventures and has more formal governance. ehf (private limited company) is common for startups and small to medium businesses with fewer shareholders and more flexible governance.

How do I start an ehf in Reykjavik step by step?

Begin with a clear business plan, choose a name, prepare founding documents, deposit initial capital, and register with the Icelandic Register of Companies. The process typically takes several weeks from initial agreement to registration.

When is corporate tax payable after forming a company in Iceland?

Corporate tax is assessed on profits for the financial year and payment is coordinated with annual tax returns filed with the Tax Administration. Timelines vary, but annual filing is required.

Where can I find the official rules for company formation in Iceland?

The official source is the Icelandic Parliament site for laws and amendments, and the Registry of Companies for formation filings. See the links in government portals for primary texts.

Why would a holding company be used for cross-border investments into Iceland?

A holding company can optimize tax planning, manage risk, and facilitate cross-border management of subsidiaries while aligning with local regulatory requirements.

Can a non-resident investor form Icelandic entities to invest locally?

Yes, non-residents can establish Icelandic entities for local investment, subject to AML controls, registration, and compliance with local corporate and tax rules.

Should I hire local counsel for a Reykjavik M&A transaction?

Yes. Local counsel helps with due diligence, regulatory approvals, and jurisdiction-specific contract drafting, reducing cross-border risks.

Do I need to disclose beneficial ownership in Iceland?

Beneficial ownership disclosures are common in Iceland for certain entities and structures; consult with counsel on who must be disclosed under AML/CTF rules.

How long does it typically take to complete due diligence for a Reykjavik acquisition?

A thorough due diligence process for a small to mid-size target usually spans 4-6 weeks, depending on data availability and regulatory checks.

Is the Icelandic legal system friendly to foreign investors in structuring deals?

Iceland provides clear company formation rules, a predictable tax framework, and diligent regulatory oversight, aiding structured investments when properly planned.

What are typical cost ranges for acquiring Icelandic legal counsel?

Costs vary by firm and complexity, but budgeting for initial consultations, drafting, and closing work often ranges from several thousand to tens of thousands of euros, depending on scope.

Do Icelandic rules restrict offshore ownership in local entities?

Iceland allows foreign ownership subject to company structure requirements and AML/CTF compliance; registry and reporting obligations apply to all entities.

5. Additional Resources

• Icelandic Parliament (AlÞingi) - Lög and legal texts - Official source for statutes including the Companies Act and amendments. Function: Legislative texts and official law publications. https://www.althingi.is
• The Icelandic Tax Administration (Skatturinn) - Guidance on corporate taxation, VAT, and tax filing. Function: Tax collection, compliance, and guidance for businesses. https://www.skatturinn.is
• Financial Supervisory Authority (FME) - AML/CTF guidance and financial sector regulation. Function: Supervises financial markets, banks, funds, and investment activities. https://www.fme.is

6. Next Steps

1. Define your investment goals and preferred entity type (ehf vs hf) based on Reykjavik operations and funding plans. Gather initial information on ownership, capital, and who will manage the entity. (1-2 weeks)
2. Identify and engage a local Investment & Business Structuring lawyer with Icelandic practice experience in corporate formation and cross-border transactions. Schedule an initial consultation to discuss scope and fees. (1-2 weeks)
3. Prepare a preliminary structure and documents for formation or reorganization, including shareholder agreements, articles of association, and capital structure. Have them reviewed for local compliance. (2-4 weeks)
4. Submit registration filings with the Icelandic Register of Companies, obtain any required licensing, and align AML/CTF controls with the Financial Supervisory Authority as needed. (2-6 weeks)
5. Finalize tax planning, including corporate taxation considerations and reporting obligations with Skatturinn. Confirm VAT status and invoicing requirements if applicable. (1-3 weeks)
6. Implement governance, reporting, and compliance frameworks for ongoing operations, including periodic board meetings and annual accounts. (ongoing)
7. Schedule periodic reviews with counsel to adapt the structure to regulatory changes and business needs. (annual or as needed)