Iceland Work Permits & Visas: Processes for Employers

Navigating the work permit and visa process in Iceland can be complex for employers, particularly when relocating or hiring international employees. Whether you are bringing foreign talent into your organization or hiring from abroad, understanding the different work permit options and the specific visa processes will ensure a smooth transition. This guide outlines the essential steps, requirements, and types of work permits and visas that employers need to know when bringing international workers into Iceland.

Who Needs a Work Permit in Iceland

In Iceland, citizens from the European Economic Area (EEA), European Free Trade Association (EFTA), and Faroe Islands do not require a work permit. However, nationals from outside these regions must obtain a work permit to work legally. Employers hiring non-EEA/EFTA nationals must secure the appropriate permits before the employment begins.

Types of Work Visas in Iceland

Iceland offers various work permits tailored to different employment needs.

Requirements for a Work Permit in Iceland

Employers must meet specific criteria to obtain a work permit for their foreign employees.

• Employment Contract: A signed agreement outlining job responsibilities and terms.
• Proof of Qualifications: Evidence of relevant expertise and credentials.
• Labor Market Test: Demonstrate the inability to find suitable EEA/EFTA candidates.
• Valid Passport: The applicant's passport must be valid for at least three months beyond the intended stay.
• Health Insurance: Proof of comprehensive coverage in Iceland.
• Clean Criminal Record: Police clearance from the applicant’s home country.

Iceland Work Permit Application Process

• Step 1: Secure a job offer from an Icelandic employer.
• Step 2: The employer submits the application to the Directorate of Immigration with all necessary documentation.
• Step 3: The application is assessed by the Directorate of Labour.
• Step 4: Await decision; processing times can vary based on completeness.
• Step 5: Apply for a residence permit after work permit approval.

Process for Visa Sponsorship in Iceland

Employers in Iceland are responsible for sponsoring work permits for non-EEA/EFTA nationals. This includes demonstrating the position cannot be filled locally, submitting complete applications, and ensuring compliance with labor laws.

What Are the Fees for a Work Permit or Visa in Iceland

Fees vary based on the permit type and applicant circumstances.

Processing Time for a Work Permit or Visa in Iceland

First-time applications typically take 8–10 months, while renewals are processed within three months. Delays may occur for incomplete submissions.

Work Permit Renewal Periods in Iceland

Temporary permits are issued for specific durations. Employers must apply for renewals at least four weeks before expiration, fulfilling all original permit requirements.

Visa Requirements for Digital Nomads in Iceland

Iceland’s long-term remote work visa allows non-residents to stay up to six months while working for foreign employers.

• Proof of foreign employment or self-employment.
• Meet minimum income thresholds.
• Comprehensive health insurance.
• Clean criminal record.

Common Challenges and Tips for Employers Hiring in Iceland

Employers may face challenges such as labor law compliance, integration issues, and delays. Early preparation and expert consultation are recommended.

Hire Global employees without hassle with an EOR solution

Expanding your workforce across international borders is an exciting step, but it can be a logistical nightmare to hire and pay employees in different countries. That’s the advantage of using a trusted Employer of Record like Playroll. They can:

• Handle your international payroll: An EOR will act as your payroll provider, paying your employees on your behalf in the local currency. The company will also have in-depth knowledge of local tax codes, regulatory practices, and everything else that goes into managing global payroll.
• Alleviate compliance concerns: Different countries each have their own federal and local laws governing employee payments. An EOR helps ensure that you are compliant with the unique set of laws for any country in which your company operates. This is extremely important since a compliance slip-up can result in heavy fines or even a lawsuit.
• Hire and pay international contractors: Sometimes a particular project or role doesn’t require hiring a full-time employee. An EOR gives employers the flexibility to also hire contractors as needed, and avoid the potential for misclassification under local labor law.