Starting an ehf in Iceland 2026: the steps, the cost and the first 30 days

Kassify · 6 November 2026

A private limited company, an einkahlutafélag or ehf, is founded on Skatturinn's service portal with electronic ID. Registration costs 140.500 kr., the share capital is at least 500.000 kr. and must be paid before the company is registered, and the company register handles an electronic application in 3 to 4 working days.

The company is not ready the moment its kennitala arrives, though. It needs a bank account, registration on the VAT register and the employer register at least 8 days before trading starts, and books from the first transaction. This article gives the steps in the right order, the cost, a worked example in krónur, the dates of the first year and the mistakes that hold most founders up.

Four decisions before you apply

The application is quick when these four decisions are made. Skatturinn's application asks about all of them.

• Company name and purpose. The name and the purpose have to match. If the name says the company is a restaurant, the purpose has to say so too. You pick an industry code, the ÍSAT number, from the purpose, and you can pick more than one.
• Founders and share capital. One founder is enough. The share capital is at least 500.000 kr. in total, and each founder records their own contribution. Founders who are individuals must be 18 and legally competent.
• Board. At least one board member. If only one person sits on the board, an alternate is also needed. With two or more, one is chair and the others are board members. A managing director is not required.
• Financial year. Most companies use the calendar year. The financial year decides when the first annual accounts are due.

The seven steps

1. 1
   Settle the name, registered address and founding date

   The system searches at once for similar names and trademarks, but the company register checks the name again. Even with no warning, the name is not approved until the company is registered.

2. 2
   Pay the share capital to the company

   A company is not registered until all of its share capital is paid. If it is paid in cash, a chartered accountant or an examiner (skoðunarmaður) confirms the payment. If it is paid in anything else, a car or equipment for example, the board writes a report that a chartered accountant or a lawyer confirms.

3. 3
   Apply on Skatturinn's service portal

   You log in with electronic ID under the company register and new registration. Electronic founding is open to individuals with an Icelandic kennitala and electronic ID, and to Icelandic companies whose board members or holders of procuration have electronic ID. Everyone else files the founding documents on paper.

4. 4
   Let the system draft the founding documents

   The electronic company register drafts the notice, the articles of association, the founding charter or founding agreement, and the memorandum or minutes of the founding meeting from what you enter. A single founder files a founding charter and a memorandum, two or more file a founding agreement and minutes. You can also upload your own documents.

5. 5
   Register the beneficial owners

   In an electronic application the beneficial owners are registered in the same application, with no separate form. On paper, form RSK 17.27 goes with the founding documents.

6. 6
   Sign and pay 140.500 kr.

   Everyone who has to sign gets an email and signs with electronic ID. A claim for the registration fee appears in the online bank of the person registering. The fee is paid up front and cannot be paid by credit card.

7. 7
   The company register registers the company

   Once everyone has signed and the fee is paid, the application is reviewed. The company register either registers the company or asks for corrections. The company gets its kennitala, and publication in the Legal Gazette (Lögbirtingablað) is included in the fee.

Beneficial owners

Act no. 82/2019 requires every company to register its beneficial owners. A beneficial owner is always an individual. They own more than 25% directly or indirectly, control more than 25% of the votes, or control the company another way, for example under the articles or a shareholder agreement.

Changes in ownership must be reported within two weeks. Skatturinn can impose daily fines of 10.000 kr. to 500.000 kr. a day if the information does not arrive, and administrative fines on a company of 500.000 kr. to 80 million kr.

What it costs to start an ehf

The fees come from the fee schedule of Skatturinn's company register and from the price list of Endurskoðun & ráðgjöf, on 5 November 2026.

The share capital is not a fee. It is the company's money and goes into the business. What leaves your pocket is 140.500 kr. at Skatturinn, plus what an accountant charges to confirm the share capital payment. That charge is not on the price lists shown here.

Example: two founders and 1.000.000 kr.

Let us assume two founders start an ehf for a contracting business with 1.000.000 kr. in share capital. One puts in 600.000 kr., the other 400.000 kr., and both sit on the board.

• Share capital. 1.000.000 kr. is paid to the company in cash and a chartered accountant confirms the payment. That is above the 500.000 kr. minimum.
• Board. Two on the board, so an alternate is not required. One is chair.
• Beneficial owners. 60% and 40%. Both are above 25% and both are registered. A third person with 20% and no other control would not be registered.
• Cost. 140.500 kr. with electronic founding. If the founders had an accountant draft the founding documents, that would add 60.000 kr. and 14.400 kr. VAT, for 214.900 kr. in total.
• VAT. Let us assume sales of 400.000 kr. a month excluding VAT. They reach 2.000.000 kr. in the fifth month, so the company registers for VAT at least 8 days before the first invoice goes out.

The first 30 days

The days follow Skatturinn's processing time for an electronic application. The bank and how quickly the founders sign decide the rest.

The VAT register and the employer register share one form. If the owner works for the company, they calculate a salary for themselves and the company withholds tax from it, so the employer register applies at once. More on the VAT number and on calculated remuneration.

The dates of the first year

For an ehf founded in November 2026, with the calendar year as its financial year and the standard two month VAT periods:

Withholding tax falls due on the 1st of the month after the pay month, with the final due date on the 15th. VAT is due on the 5th of the second month after the period ends. If VAT is not paid by the due date, a 1% surcharge on the unpaid amount is added for each day begun, at most 10%, and if it is not paid within a month of the due date, penalty interest is charged. Annual accounts are filed no later than a month after the annual general meeting and never later than eight months after the end of the financial year.

The duty to keep books from day one

An ehf must keep books under the Bookkeeping Act no. 145/1994 from the day it is founded. In practice that means three things:

• Every entry rests on a supporting document and is recorded as it happens, in date order.
• Sales invoices are numbered in advance and no number is used twice in the same year.
• Accounting records, electronic records included, are kept for at least 7 years from the end of the financial year.

The company files annual accounts with the annual accounts register under the Annual Accounts Act no. 3/2006, and a tax return every year. Money leaves the company for its owners as salary or as a dividend, not as a withdrawal. The article on share capital and dividends covers that.

The mistakes that hold most founders up

• On the VAT register too late. VAT-liable trading must be reported at least 8 days before it starts. The Director of Internal Revenue assigns the VAT number on registration.
• Name and purpose that do not match. The company register then asks for a correction and the registration is delayed.
• One board member and no alternate. The law requires an alternate when only one person sits on the board.
• Share capital unpaid or unconfirmed. A company is not registered until all of the share capital is paid and the payment confirmed.
• Forgetting the beneficial owners when a share is sold. The change is reported within two weeks, or daily fines can follow.
• Starting the books at year end. The law requires entries to be recorded as they happen, not all at once at year end.
• No zero return. A company on the VAT register files a VAT return for every period, even with no sales. Otherwise the Director of Internal Revenue estimates the VAT.

Kassify takes over from the first transaction

Once the kennitala arrives, the founding is done and the running of the business begins. Then come the jobs that return every month: bookkeeping, VAT returns, payroll, withholding tax, pension returns and the annual accounts. Kassify is a whole finance department for one fixed price, an accounting firm that uses AI, and it takes these jobs off your plate from day one.

• You give the company's kennitala and each bank is connected directly. Every transaction is read, categorised and matched without a single manual entry from you.
• Bills in your email find their own way into the books, and receipts arrive from Messenger and the app. Every entry has its supporting document from day one.
• VAT returns every two months, before the due date. Payroll, withholding tax and pension returns every month.
• Annual accounts reviewed by a chartered accountant and filed with the annual accounts register on time, together with the tax return.
• A bookkeeper replies within 24 hours, also when the question is whether to pay yourself a salary or a dividend.
• One fixed monthly price for bookkeeping, payroll, VAT, the app, the annual accounts and the tax return. You get the price in writing before you decide, 20% below a traditional accounting firm.

Certified bookkeepers and chartered accountants stand behind the work, including Gunnar Freyr Guðmundsson, owner of Endár ehf. If the business used to run on your own kennitala or in another system, Kassify moves the books in less than 7 days, included in the price. Kassify talks to your old bookkeeper and the history comes with you. More on Kassify's bookkeeping service.

Questions

The kennitala is here. The books start on day one.

Leave your email and Kassify goes through the new company with you. You get the price in writing before you decide.