This article provides a detailed breakdown of the average costs involved in establishing and maintaining a standard limited liability company (Einkahlutafélag, ehf.) in Iceland for the year 2025. Drawing exclusively from official Icelandic sources, we focus on required capital, legal fees, registration costs, and ongoing compliance expenses in ISK and provide USD conversions based on an exchange rate of 1 USD ≈ 140 ISK.
Average Company Creation Costs in Iceland (2025)
Starting a standard Icelandic limited liability company (ehf.) involves both mandatory share capital and various administrative charges. Below is an itemized breakdown:
| Item | Amount (ISK) | Amount (USD) |
|---|---|---|
| Minimum share capital requirement | 500,000 ISK | $3,570 |
| Company registration fee (electronic filing) | 130,000 ISK | $930 |
| Company registration fee (paper filing) | 256,000 ISK | $1,830 |
| Average legal/lawyer fees for company formation | 40,000 ISK | $285 |
For most formations, electronic filing is standard. Based on these figures, the typical outlay for establishing a company using electronic filing totals approximately 670,000 ISK ($4,785). The quoted average for creation costs in the 2025 dataset was 540,000 ISK ($3,860), reflecting the most common scenarios.
Consideration: Share Capital Requirement
The largest component by far is the minimum share capital (500,000 ISK / $3,570), which is a legal requirement for all ehf. formations in Iceland. This capital must be deposited at the time of registration, serving as a financial guarantee for creditors.
Annual Company Maintenance Costs (2025)
Once formed, annual company maintenance primarily consists of compliance and reporting fees, as well as mandatory accounting or auditing services. Actual ongoing costs vary depending on company size and complexity:
| Item | Cost per Year (ISK) | Cost per Year (USD) |
|---|---|---|
| Annual return filing fee | 0 ISK | $0 |
| Mandatory accounting/auditing (small company, minimum) | 150,000 ISK | $1,070 |
| Mandatory accounting/auditing (medium/typical company) | 350,000 ISK | $2,500 |
The data shows that annual maintenance costs typically range from 150,000 ISK to 350,000 ISK ($1,070–$2,500), driven almost entirely by accounting and auditing requirements. There is no official filing fee for the annual return, but professional support is often necessary to meet compliance standards.
Summary Table: Company Creation and Maintenance
| Cost Category | ISK (total/annual) | USD (total/annual) |
|---|---|---|
| Company creation (avg. incl. share capital) | 540,000 ISK | $3,860 |
| Annual maintenance (range) | 150,000–350,000 ISK | $1,070–$2,500 |
Official Sources for Icelandic Corporate Requirements
Pro Tips for Managing Company Setup and Costs in Iceland
- Consider electronic registration, which is considerably less expensive than paper filing and speeds up the formation process.
- Budget for the full share capital requirement upfront, as it is non-negotiable for limited liability company registration.
- Even though the annual return has no official filing fee, the real cost is in hiring reliable accounting services who understand Icelandic compliance standards—plan accordingly.
- Annual maintenance can vary based on company size and activity, so review your anticipated transaction volume and growth projections when selecting accounting support.
In summary, Iceland’s average company creation costs are heavily weighted by the mandatory share capital, with the actual out-of-pocket cash required for administrative fees being relatively moderate by European standards. Ongoing annual expenses are predictable and largely tied to compliance with accounting rules, providing a clear framework for business planning. Paying attention to these core requirements from the outset helps avoid surprises and keeps annual costs manageable as your company grows.