How to Move to Iceland in 2025 – FREE Step-by-Step Guide

Jump to: Quick Facts · Living Essentials · Pros · Cons · Visas Guide · Residency & Citizenship · Business · Resources

Immigrating to Iceland? Here’s what you need to know:

🇮🇸 Iceland at a Glance

Population: 356,501 people, with a median age of 39.7 years
Geography: Volcanic island packed with glaciers, hot springs, and a central plateau; only 0.5% forest cover due to tough climate and erosion
Climate: Subpolar in the south, tundra inland. Winter temps: 0°C (south) to -10°C (north); Summer: 10–13°C
Famous Parliament: Home to the Althing, the world’s oldest parliament (est. 930 AD)
Population Density: Just 3.5 people/km²; urban living rules—94.9% in cities

Currency: Icelandic króna (ISK); Visa and Mastercard work almost everywhere, cash rarely needed
Languages: Icelandic (official), English widely spoken, Danish taught in schools
Religions: Majority Evangelical Lutheran (62.3%), Roman Catholic (4%), Reykjavik Free Church (2.7%), Other (4%), Non-religious (7.6%)
Ethnicities: Icelandic (78.7%), Polish (6%), Lithuanian (1%), Danish, Ukrainian, others (8.8%), Mixed/unspecified (4.5%)
Largest Cities: Reykjavík (119,108), Kópavogur (30,799), Hafnarfjörður (26,099)

Safety First: One of the world’s safest countries—crime rate just 22.26% (mostly traffic stuff); murder is extremely rare and parents even leave babies outside to nap
Strong Economy: GDP over $32.3B; growth at 2.4%, and unemployment under 3%; success in energy, tourism, and tech; almost all electricity geothermal/hydropower
Jaw-dropping Nature: Think volcanoes, glaciers, Blue Lagoon; Northern Lights from September–April; perfect for explorers—glacier hikes, waterfalls, black sand beaches await
English Proficiency: 98% speak English fluently; road signs, menus, and services usually in English; Danish widely taught too
Progressive Society: Leaders in gender equality, LGBTQ+ rights and social welfare; third happiest nation worldwide; universal healthcare, university tuition-free (minor fees), very low pollution (index 15.96); short commutes and strong community

Note: these are common expat complaints, and may not apply to you.

High Cost of Living: Wallet warning! 43% pricier than Oslo; monthly basics for four: 1,080,612 ISK/$7,800; groceries 30–50% more than EU; 45m² studio rent: 252,240 ISK/$1,820; utilities around 31,740 ISK/$230; basic lunch: 7,596 ISK/$55; beer: 563 ISK/$4.10
Housing Shortages: Chronic shortage despite government plans; only 690 new units in 2023, 675 in early 2024 (target was 3,500/year); Reykjavík’s vacancy rate almost zero, and rents up 8.7% in 2024; affordable housing policy not keeping pace with growth
Harsh Winter Darkness: December–January, only 4–5 hours of daylight; 2025 solstice: 3 sunlit hours; overcast skies 70% of winter; SAD affects 14% of expats (light lamps and vitamin D highly recommended); frequent snow closures outside cities
Language Barrier: Icelandic mandatory for citizenship and most skilled jobs; language courses: 18,000–25,000 ISK/month ($130–180), but practice is hard—nearly everyone switches to English; only 12% achieve fluency in 5 years; new government plan for more Icelandic classes in progress
Cultural Homogeneity: Population mostly ethnic Icelandic (78.7%); biggest minorities: Polish (6%), Lithuanian (1%); 44% of expats say it’s hard to make local friends; cultural scene mainly Nordic-focused and ethnic food stores are rare outside the capital; ranked 28th of 38 for immigrant inclusion by the OECD—room for improvement!

Want to stay longer in Iceland? Here are your visa options:

Temporary Work Permit for Expert Knowledge:
- For professionals with specialized skills not found in Iceland/EEA
- Sectors: IT, engineering, healthcare, academia
- Must have a job offer; employer proves no local can fill the role
- Valid for up to 2 years, can be renewed
- No quotas; usually processed in 90 days
Work Permit for Labor Shortages:
- Designed for workers in high-demand fields: healthcare, construction, hospitality, fisheries
- Requires a valid job contract; permit matches job duration
- Labor market needs reviewed annually by the Directorate of Labour (no hard quotas)
Student Visa:
- For international students enrolled in Icelandic schools
- Work rights: 15 hrs/week during semester, full-time on breaks
- Can convert to a work permit if hired after graduation
Family Reunification Visa:
- Available for spouses, children under 18, parents of Icelandic residents
- Must show financial stability; income proof: 247,572 ISK/month (singles), 396,115 ISK/month (couples)
- Processing time: 3–6 months
Digital Nomad Visa:
- Remote workers/freelancers can stay 6–12 months
- Must earn at least 1,000,000 ISK/month (~$7,000 USD)
- No renewals; local employment not allowed
Long-Term Visa:
- For non-workers wanting to stay longer (family visits, court, etc.)
- Adds up to 90 days to your stay
- No work allowed; can’t reapply within 12 months

Permanent Residency:
- Need at least 4 years legally in Iceland (work, family reunification, etc.)
- Icelandic language requirement: 150 hours of state courses
- Can’t be absent more than 90 days/year
- Exceptions: spouses of Icelanders qualify after 3 years; Nordic citizens after 4 years
Citizenship:
- 7 years continuous residence (standard route)
- Exceptions:
  - Spouses of citizens: 3 years (if married for 5)
  - Refugees: 5 years after protected status
  - Nordic citizens: 4 years
- Must pass a language test, have no criminal record, and meet income thresholds (247,572 ISK/month singles, 396,115 ISK/month couples)
- Dual citizenship is allowed

Entrepreneurs welcome! Focus areas: tech, renewable energy, tourism
Corporate tax: 20%
LLCs: No restriction on foreign ownership, but you’ll need a local director/board member
Pros:
- Direct access to EU markets
- Talented workforce
- Government grants for green energy
Cons:
- High operational costs
- Lots of regulatory hoops
- Strict environmental rules
Starting a business:
- Choose a structure (LLCs are popular for flexibility and tax perks)
- Reserve your company name with the Intellectual Property Office
- Write your Articles of Association (minimum capital: 500,000 ISK for LLCs)
- Register with Registers Iceland and get your VAT number
- Apply for any sector-specific permits (especially for fisheries or tourism)

Directorate of Immigration: Your go-to for visas, residency, citizenship
Alfred.is – Iceland’s main job portal, covering a mix of local and expat-friendly roles (widely used locally)
Registers Iceland: Where you handle business set-up, tax, and legal compliance