Reykjavík Grapevine - aug. 2023, Síða 8

The Reykjavík Grapevine 12 / 23 8
Come by our time-honoured artisan bakery for
intensely delicious baked goods, a savory brunch
or one of our homemade sodas or craft beers
.
Find us on Laugavegur 36,
every morning from 7:30 AM.
www.sandholt.is
WORDS Iryna Zubenko
IMAGE Art Bicnick
Whether you sell handicrafts
or make music, it turns out that you
can start a company – most likely a
private limited company, known as
“ehf.” We spoke with Rannveig Lind
Bjargardóttir, a Specialist in the De-
partment of Collection and Registers
at Skatturinn, to help us navigate the
process without drowning in bureau-
cracy.
GV: WHAT ARE THE LE-
GAL REQUIREMENTS AND
STEPS NEEDED TO START A
COMPANY IN ICELAND?
In order to establish a company in
Iceland you will need an Icelandic ID
number (kennitala) or a System ID
number (kerfiskennitala) if you do not
have an Icelandic ID number.
To apply for a System ID number,
form 17.62 (application of a system
ID number) is sent along with the
registration documents for the com-
pany. A System ID number does not
grant the same rights as having a
kennitala, only the ability to establish
a company and take on roles in the
company such as director or execu-
tive manager.
If the applicant has a kennitala and
an electronic ID, they can apply for
the registration of a new company
online through our service portal via
skatturinn.is. The process is quicker
(3-5 business days) than providing us
with registration documents on pa-
per or via email (10-14 business days).
Before establishing a company, we
recommend familiarising yourself
with the rights and obligations asso-
ciated with the legal form you intend
to apply for. For example, different
rules apply to private limited com-
panies and limited partnerships in
terms of personal liability. It’s impor-
tant to know the main differences
in order to decide what sort of legal
form might be suitable for your busi-
ness.
According to Law No. 138/1994 on
private limited companies, the found-
ers must be of legal age and their
estate must not be under bankrupt-
cy. All executive managers and the
majority of directors of an EHF must
be domiciled in Iceland. However,
exceptions apply if they’re domiciled
in the EU or an OECD member state.
The minimum share capital of an EHF
is 500,000 ISK. A state-authorised
auditor or an independent person
who provides assurance that the
capital is paid will need to sign Form
17.21 (application for a new private
limited company), confirming that the
share capital has been paid. Please
bear in mind that the share capital is
not paid to Skatturinn.
GV: WHAT’S THE COST OF
STARTING A BUSINESS
IN ICELAND, INCLUDING
LICENCES, PERMITS AND
OTHER EXPENSES?
The registration fee is 140,500 ISK.
Along with form 17.21, you need
to submit Articles of Association
(samþykktir), Founding Agreement
(stofnskrá or stofnsamningur), Min-
utes of the founding meeting (stof-
ngerð) and Form 17.27 on the regis-
tration of the Beneficial Owners of
the company.
Templates of these EHF founding
documents and other legal forms
can be found on our website in Ice-
landic. These documents need to be
provided to us in Icelandic accord-
ing to the law, although the text of
translation on the papers is allowed.
These documents are created auto-
matically within the system if stand-
ard options are chosen in the online
registration process of an EHF.
Once the company has been regis-
tered, any changes on the compa-
ny registration, for instance, name,
change of directors, domicile, share
capital, etc., is done via the company
registry – either online if its an EHF or
by providing us with relevant forms
via email or in person. Changes to
registration cost 3,700 ISK, irrelevant
of the number of changes if they are
all notified at the same time to the
registry.
GV: WHAT ARE SOME OF
THE COMMON MISTAKES
OR OBSTACLES BEGINNERS
MIGHT FACE?
There are far less mistakes if it’s
done online, mainly because the
system sort of creates documents
for you. However, we are constant-
ly seeing that people get confused
about the registration of the benefi-
cial owners, they tend to choose the
wrong kind of ownership.
Registering a beneficial owner of a
company is a legal requirement and
it’s important that the type of owner-
ship chosen for the beneficial owner
when registering a company is in line
with the founding documents. For
example, if individual A is the founder
and sole shareholder of company B,
then A is considered to have 100%
direct ownership and 100% direct
voting rights of company B. If the
sole shareholder of company B is an-
other company, C, and A is the sole
shareholder for company C, then A
is considered to have 100% indirect
ownership and 100% indirect voting
rights in company B.
GV: ARE THERE ANY INDUS-
TRIES THAT ARE PARTICU-
LARLY POPULAR AMONG
NEW BUSINESS REGISTRA-
TIONS IN ICELAND?
It’s hard to pinpoint just one indus-
try – there is a lot of diversity in the
business scope of new companies.
It varies from tourism companies,
construction, creative purposes and
everything in between.
You should explore the sector your
company will be operating in very
carefully. Different rules apply for
different sectors, some of them are
heavily regulated and some of them
are not. For example, in the tourism
industry, where you’re dealing with
people and moving people around,
you will need all sorts of extra per-
mits regarding transporting people,
safety measures, etc. We always try
to do our best to guide non-Icelan-
dic speaking nationals through the
steps.
Read more about the process and
register a company at skatturinn.is
Money Moves It’s Company Time!
Traversing the landscape of bureaucracy in search of a shiny ehf