Living in the Faroe Islands: the ultimate expat guide

Immigration to the Faroe Islands requires careful navigation of a unique system. The islands operate independently from both the EU and Schengen Area, meaning standard EU citizenship or Schengen visas provide no automatic entry or residence rights. This autonomy creates specific requirements that differ substantially from mainland Denmark, necessitating dedicated visa applications even for European nationals.

Short-term entry requirements

Nordic citizens (Denmark, Finland, Iceland, Norway, Sweden) enjoy unlimited stay without any visa requirements, benefiting from Nordic cooperation agreements. EU/EEA citizens and visa-exempt countries may stay up to 3 months without a visa for tourism or business purposes. All other nationalities must obtain a Faroe Islands-specific visa before arrival, as Schengen visas are not valid for the Faroese territory.

Work and residence permits

Employment in the Faroe Islands requires proper authorization regardless of your nationality. Nordic citizens remain exempt from work permit requirements and can settle freely. EU/EEA citizens and UK nationals must obtain both work and residence permits despite their European citizenship, reflecting the islands' non-EU status. Citizens of all other countries require a combined work and residence permit to work legally.

Application process

The process begins with securing a job offer from a Faroese employer, who typically plays an active role in the application process. Applications are submitted to the Danish Immigration Service. UK-based applicants can file through VFS Global Visa Application Centres in Edinburgh, London, or Manchester. Processing times vary based on nationality and permit type.

Tax implications of residency

Your stay duration determines your tax status. Residing more than 180 days within a 12-month period establishes full tax residency, with worldwide income subject to Faroese taxation. Stays under 180 days result in limited tax liability, with a flat 42% rate on employment income. This distinction significantly affects both tax burden and access to social benefits, including child tax credits and interest subsidies reserved for full tax residents.

For US citizens, note that worldwide income reporting requirements under FATCA still apply regardless of Faroese tax residency status. Consult the Faroese government website or Visit Faroe Islands for current requirements specific to your situation.

The Faroese labor market stands out globally with near-full employment and competitive compensation. This small but sophisticated economy, heavily concentrated in fishing and aquaculture, maintains remarkable stability while offering opportunities across growing sectors. Understanding the employment landscape and business environment proves essential for successful economic integration.

Labor market dynamics

The Faroe Islands maintain an unemployment rate of 1.0-1.2% (May-July 2025), among the world's lowest. Only 330 people were registered as job seekers in May 2025 across the entire archipelago. The employment rate remains exceptionally high, with 0.1% year-over-year growth. Average annual salary reaches DKK 320,500 (approximately USD 46,000), while the median salary stands at DKK 340,400. No national minimum wage exists, with sector-specific collective agreements establishing baseline compensation.

Key employment sectors

Fishing and aquaculture dominate the economy, generating roughly 90% of exports through modern, sustainable operations. Maritime services, including shipbuilding and marine engineering, provide opportunities for technical specialists. The tourism sector shows sustained growth, driven by the HEIM 2030 tourism strategy promoting sustainable visitor management.

Information technology and telecommunications represent emerging opportunities, while financial services continue gradual expansion. Public administration remains a significant employer, offering stable positions with comprehensive benefits.

Starting a business

The Faroese business environment offers several corporate structures. Since 2017, the Entrepreneurial company enables startup with minimal capital of DKK 1-49,999, requiring registration fees of DKK 2,500 plus 4% of invested capital. This flexible structure suits individual entrepreneurs or small partnerships.

A Private Limited Company requires DKK 50,000 minimum capital (since January 2017) with identical registration fees. Larger ventures may establish a Limited Company with DKK 500,000 capital and DKK 3,500 registration fee plus 4% of capital. Partnerships require minimum 2 partners (individuals or entities) with direct partner liability.

Registration occurs through Skráseting Føroya (Faroese Business Register) and TAKS (tax administration). Required documentation includes operating budgets and partnership agreements where applicable. VAT applies at 25% on goods and services sales, with exemption for annual revenues below DKK 50,000.

Sources: Trading Economics, World Salaries

Annual business obligations

Since 2016, all companies pay mandatory annual broadcasting fees scaled to payroll: DKK 2,000 for payroll exceeding DKK 100,000, up to DKK 12,000 for payroll above DKK 10,000,000. These fees fund the public broadcaster Kringvarp Føroya.

Detailed guidance is available through TAKS or Visit Faroe Islands business resources.

The Faroese tax system combines progressive national taxation with municipal levies, creating a framework distinct from mainland Denmark. Understanding these mechanisms enables proper financial planning and ensures compliance with local obligations. The system funds comprehensive public services including universal healthcare and free education.

Full tax residency obligations

Residing more than 180 days within a 12-month period establishes full tax residency. Taxation begins on income exceeding DKK 30,000 annually. The progressive national tax applies to income above DKK 65,000, with a 20% rate on income up to DKK 500,000, then increasing fixed amounts on higher brackets.

Municipal tax ranges from 16% to 23% depending on your municipality of residence, applied as a flat rate on all taxable income. Members of the Evangelical Lutheran Church pay an additional church tax of 0.6% to 0.9%.

Mandatory social contributions

Full tax residents pay several obligatory contributions. Unemployment insurance (ALS) takes 1.25% of income for those aged 16-67.5 years. The parental leave fund (BAS) requires 0.71% for ages 16-66. The labor market contribution stands at 3% of income.

Public health insurance (Heilsutrygd) costs DKK 175 monthly plus 0.60-0.70% of taxable income. The public broadcasting fee (Kringvarp Føroya) amounts to DKK 150 monthly for individuals aged 24-66.

Limited tax liability for non-residents

Stays under 180 days trigger limited tax liability with a flat 42% rate for ordinary employees, reduced to 35% for FAS-registered or bareboat charter vessel crew. An additional 3% contribution to the labor market pension fund applies. This status excludes child tax credits and interest subsidies.

Value Added Tax

The standard VAT rate (locally termed MVG or Moms) is 25% on commercial sales of goods and services. Businesses with annual revenue below DKK 50,000 are exempt from VAT. Quarterly declarations are filed through the Vinnugluggin online portal.

Corporate taxation

The corporate tax rate stands at 18% on company profits. This relatively moderate taxation aims to maintain economic competitiveness while funding quality public services. A January 2025 tax reform revised the aquaculture taxation model, introducing new structures for salmon producers.

Current information is available through the TAKS tax authority or Info Norden Nordic tax information portal.

The Faroese healthcare system follows Nordic principles of universal access and public funding. Despite the small population, the archipelago maintains comprehensive medical services free at point of use for all residents. Quality care, accessible practitioners, and efficient emergency services characterize this system funded through mandatory contributions and taxation.

Public health insurance

The public health insurance (Heilsutrygd) covers all Faroese residents through a monthly contribution of DKK 175 plus 0.60-0.70% of taxable income. This insurance provides free access to general practitioners, hospital care, emergency services, and most necessary medical treatments. Landssjúkrahúsið (National Hospital) in Tórshavn serves as the primary hospital facility, equipped for emergencies and routine specialist care.

Wait times remain reasonable due to the small population. Highly specialized treatments unavailable locally are referred to Danish hospitals, with costs covered by the Faroese public system. Pharmacies are well-stocked and distributed across major towns.

Private health insurance supplements

While public coverage is extensive, some residents opt for private health insurance to access faster specialist appointments, broader practitioner choice, or enhanced hospital amenities like private rooms. Danish insurers typically extend coverage to the Faroe Islands.

Preventive care and specialized services

The system emphasizes preventive medicine through regular screening programs, free vaccinations, and systematic monitoring for children and pregnant women. Dental care is free for children and adolescents until age 18, but partially private for adults. Mental health and psychological services are available through the public system, though non-urgent appointments may experience longer wait times.

Access for new residents

Healthcare access begins upon obtaining your residence permit and local registration. Registering with a general practitioner who becomes your primary care coordinator is recommended. Emergency services are reached at 112, available 24/7 throughout the archipelago.

Temporary visitors and tourists require international travel insurance, as the Faroese public system covers residents only. Nationals from countries with bilateral agreements with Denmark may receive some coverage, but verification before travel is essential.

Additional information is available at Study in Faroe Islands or Info Norden.

The Faroese education system delivers free, high-quality instruction from kindergarten through university. However, a critical consideration for international families: all education is conducted in Faroese and Danish. No international schools exist in the Faroe Islands, presenting a significant challenge for families whose children don't speak these languages. Educational integration requires linguistic commitment, though young children typically adapt more rapidly than adolescents.

Structure of the local system

Compulsory education begins at age 7 and continues through 16, covering primary and lower secondary levels. Fólkaskúli (primary and lower secondary school) provides these 9 years with standardized national curriculum taught entirely in Faroese, introducing Danish as a foreign language in early grades.

After age 16, students may continue to upper secondary education at Framhaldsskúli, equivalent to high school. Multiple tracks are available: academic (university preparation), technical, commercial, or vocational. Duration varies from 2-4 years depending on the chosen path. Upper secondary education remains completely free.

Higher education and specialized training

University of the Faroe Islands (Setur) in Tórshavn offers Bachelor's, Master's, and PhD programs in Nordic languages and literature, natural sciences, teacher training, and nursing. University education is free for all residents. Courses are primarily taught in Faroese and Danish, with some Master's and PhD programs available in English.

Specialized institutions include the Maritime and Engineering Study Centre offering 3-year programs, Klaksvík Maritime School providing 1.5-year captain training, and the Business School covering commerce and management. All these programs are free and recognized throughout the Nordic countries.

Challenges for international families

The absence of international schools represents the primary obstacle for expatriate families. Children must integrate into the local system in Faroese and Danish, potentially creating temporary difficulties, particularly for teenagers. However, the educational system provides language support for non-native speakers, facilitating gradual integration.

Young children (kindergarten and primary) typically adapt more easily, quickly acquiring basic language skills. Adolescents arriving mid-secondary education may face more complex adaptation. Some families arrange private Faroese tutoring before arrival or during initial months, accelerating school integration.

Schools in Tórshavn and major towns

In Tórshavn, several primary and lower secondary schools serve students, including Hoyvíksskúlin and Vesturbýarskúlin, both recognized for educational quality. At the secondary level, Studentaskúlin is a leading academic high school, while Tekniska skúli focuses on technical tracks.

Other major towns like Klaksvík, Runavík, and Tvøroyri maintain quality primary and secondary schools, ensuring equitable educational access across the territory. Many Faroese students pursue higher education in Denmark, particularly Copenhagen or Aarhus, utilizing Nordic mobility and educational agreements between the Faroe Islands and Denmark.

Further details are available through the Faroese government or University of the Faroe Islands.

Securing housing in the Faroe Islands ranks among the primary challenges for newcomers. The property market is constrained by small population size and challenging geography. Rental costs and purchase prices reflect Nordic living standards, with availability particularly limited in the capital. Early planning and flexibility prove essential for successful housing searches.

Available housing types

Faroese housing divides primarily between detached houses and apartments. Traditional Faroese houses, often featuring distinctive grass roofs, form an important part of the architectural heritage. These structures provide excellent natural insulation against the damp, windy climate. Modern apartments concentrate mainly in Tórshavn and major towns.

Rental remains the preferred option for initial settlement, allowing familiarization with different neighborhoods before potential purchase. Furnished rentals are rare, with most properties offered unfurnished. Lease agreements are generally flexible, typically one-year terms with renewal options.

Rental and purchase costs in Tórshavn

In Tórshavn, monthly rent for a one-bedroom apartment in the city center ranges from DKK 8,000-10,000. A three-bedroom city center apartment costs DKK 12,000-15,000 monthly. Suburban areas offer slightly lower rents, with one-bedroom apartments around DKK 6,500-8,000.

For purchases, average price per square meter in central Tórshavn reaches approximately DKK 25,000, while suburban areas drop to around DKK 18,000. These prices align with major Scandinavian cities. Mortgage access is generally straightforward for residents with stable employment, with interest rates following Danish trends.

Other towns and residential areas

Outside Tórshavn, towns like Klaksvík (second-largest city), Runavík, Fuglafjørður, and Tvøroyri offer more affordable options. Rents run 20-30% lower than the capital, with less competitive markets. These towns provide essential services (schools, shops, medical facilities) while offering more rural settings and nature access.

Smaller villages sometimes feature very attractive pricing, but consider distance from services and absolute vehicle necessity. Roads are excellent, but distances and weather conditions can complicate daily commutes.

Search process and administrative requirements

Housing searches utilize primarily online local listings, word-of-mouth, and Facebook groups dedicated to Faroese real estate. Real estate agencies exist but remain limited. Employers often assist with searches and landlord connections.

Once housing is secured, registering your address with local authorities is mandatory. This registration enables access to public services (healthcare, taxes, social security). Most rentals include heating in charges, a significant advantage given the climate. Electricity and water bills are separate, paid monthly.

Practical settlement advice

The Faroese climate imposes specific requirements: prioritize well-insulated properties with double glazing and effective heating systems. Proximity to bus stops or main roads significantly facilitates daily transportation. In Tórshavn, the Hoyvík and Argir neighborhoods combine accessibility and services while remaining close to the center.

Allow several weeks to months for your search, especially targeting Tórshavn. Summer sees slight availability increases but also higher demand from tourism. Additional information is available through Info Norden housing resources.

Relocating to the Faroe Islands demands thorough preparation due to geographic isolation and specific logistics for maritime and air transport. Anticipating each step, from administrative formalities to shipping personal belongings, enables a smooth transition. This comprehensive checklist covers essential tasks before departure and upon arrival.

Pre-departure essentials

1. Secure your work and residence permit: priority task to complete months before departure, coordinating with your future employer
2. Arrange temporary health insurance: cover the transition period before enrolling in the Faroese public system
3. Organize children's schooling: contact schools in your destination town, enroll children, arrange preliminary Faroese language instruction if possible
4. Plan shipping of belongings: compare maritime shipping quotes, allow 4-8 weeks for sea freight delivery
5. Cancel local contracts: lease, subscriptions, banking services, while maintaining an account in your home country for the transition
6. Gather official documents: passport, international driving permit, translated diplomas, medical certificates, recent bank statements
7. Budget for initial costs: plan minimum USD 4,000-7,000 to cover first months (housing deposit, equipment, local transport)

Immediate arrival tasks

1. Register with municipality: declare your residence address within the first days to activate social rights
2. Obtain your Faroese personal number: equivalent to social security number, essential for all administrative and banking procedures
3. Open a local bank account: main banks are Betri Banki, BankNordik, and Norðoya Sparikassi, prioritize banks with English-language services
4. Enroll in public health insurance: automatic registration once residence is recorded, monthly contributions begin
5. Find a general practitioner: select your primary care physician to access public healthcare
6. Exchange or validate your driving license: EU and Nordic licenses generally accepted, verify requirements for your nationality
7. Arrange home insurance: mandatory for renters and owners, covers climate-related damage

Essential equipment for Faroese climate

1. Waterproof and windproof clothing: necessary year-round, prepare multiple technical layers for rapid weather changes
2. Sturdy hiking boots: the hilly, wet terrain requires quality waterproof footwear
3. Lighting equipment for winter: very short winter days (few hours of daylight) require good domestic lighting and headlamps for outdoors
4. Purchase or import a vehicle: nearly essential outside Tórshavn, as public transport is limited beyond the capital

Cultural and linguistic integration

1. Enroll in Faroese language courses: free or subsidized courses are offered to new residents, language learning significantly facilitates integration
2. Participate in community events: traditional festivals, village celebrations, national holidays provide excellent opportunities to meet locals
3. Join local associations: sports clubs, choirs, hiking groups foster connections and social integration

Adapting to the Faroe Islands requires time and genuine commitment to integration. Geographic isolation, demanding climate, and language barriers may surprise during initial months, but quality of life, exceptional safety, and natural beauty amply compensate for these early challenges.

Life in the Faroe Islands centers fundamentally on intimate connection with nature. The archipelago offers some of Europe's most dramatic landscapes, with outdoor activities accessible year-round. While urban cultural infrastructure remains modest given the small population, Faroese compensate through rich community life and vibrant traditions. Recreation here revolves around hiking, maritime activities, and local cultural events.

Hiking and natural exploration

Hiking dominates island activities. Marked trails traverse all islands, offering spectacular views of fjords, cliffs, and waterfalls. Lake Sørvágsvatn, famous for its optical illusion appearing to float above the ocean, ranks among must-see sites. The Vestmanna bird cliffs enable observation of seabird colonies in vertiginous settings.

The village of Gásadalur and its Múlafossur waterfall plunging directly into the ocean attract hikers and photographers worldwide. Mykines Island, accessible by boat or helicopter, hosts thousands of puffins from May to August, an exceptional natural spectacle. Saksun, with its lagoon surrounded by mountains, offers an almost surreal setting for walks.

Maritime activities and wildlife observation

Boat excursions explore rugged coastlines and observe whales, dolphins, and seals in natural habitats. Tours from Vestmanna or Tórshavn combine sea caves, rock arches, and bird colonies. Sea fishing remains popular, accessible to beginners and experienced anglers, with opportunities to bring home fish and crabs for consumption.

For thrill-seekers, sea kayaking provides unique perspectives on cliffs and caves inaccessible by land. Multiple operators offer guided outings suited to all levels. Surfing and bodyboarding are also developing, utilizing North Atlantic swells, though water temperature requires thick wetsuits.

Cultural life and traditional events

Despite small size, Tórshavn hosts several cultural institutions. Listasavn Føroya (National Art Museum) exhibits works by Faroese and Nordic artists, while Tjóðsavnið (National History Museum) traces the archipelago's history. Nordic House serves as a major cultural center, hosting concerts, exhibitions, lectures, and film screenings.

Festivals punctuate the Faroese year. G! Festival in July at Gøta is the premier music event, attracting local and international artists in a unique natural setting. Summarfestivalurin in August celebrates Faroese music, dance, and culture. Ólavsøka, the national holiday in July, commemorates Saint Olaf with traditional festivities: rowing competitions, chain dancing in national costumes, concerts, and sporting events.

Sports and recreational activities

Football occupies a central position in Faroese sporting life. Despite tiny population, the archipelago maintains its own national league and international team, creating genuine local fervor. Swimming is encouraged from young ages, with several heated public pools accessible free or at minimal cost.

Fitness and weight training are practiced in modern gyms in Tórshavn and major towns. Cycling attracts growing numbers, though steep terrain and constant wind make it demanding. Hiking clubs regularly organize group outings, excellent opportunities to discover lesser-known trails and build social connections.

Nightlife and dining

Nightlife remains modest but convivial. Tórshavn features several bars and pubs, including Sirkus Føroyar and Mikkeller, offering local beers and relaxed atmosphere. Restaurants showcase local products: fresh fish, Faroese lamb, farm produce. KOKS, a two-Michelin-starred restaurant until 2024, placed Faroese gastronomy on the world map, though it departed the archipelago in 2024.

Cafés serve as informal meeting places where residents and visitors mingle over coffee and local pastries. Faroese appreciate convivial moments, particularly during long summer evenings when the sun barely sets.

Living in the Faroe Islands involves high costs comparable to other Nordic countries like Norway or Iceland. Geographic isolation, necessity of importing most consumer goods, and relatively high wages contribute to this price level. However, average incomes generally compensate for this expense, provided lifestyle adapts to local context. The following data comes from Numbeo (July 2025) and reflects average prices observed primarily in Tórshavn.

Monthly budget for a single person

A single person living in the Faroe Islands needs a substantial budget to cover all regular expenses. The table below details average monthly expense categories for a single person residing in Tórshavn.

Sources: Numbeo (July 2025)

Monthly budget for a family of four

A family comprising two adults and two children will see expenses increase significantly, particularly for housing, food, and school-related costs (though school is free, ancillary expenses exist).

Sources: Numbeo (July 2025)

Daily price references

Sample prices for better understanding daily costs: a meal at an inexpensive restaurant costs approximately DKK 150 (USD 21), a cappuccino DKK 45 (USD 6), a bottle of wine at the supermarket DKK 80 (USD 11). A liter of gasoline runs around DKK 12 (USD 1.70). A cinema ticket costs approximately DKK 100 (USD 14), a beer at a bar DKK 70 (USD 10).

Imported products are significantly more expensive than local products. Prioritizing fresh fish, Faroese lamb, and local dairy reduces food bills while supporting the local economy. Main supermarkets are Bonus, SMS, and Miklagarður, offering comprehensive product ranges.

Budget management strategies

To optimize expenses, cook at home rather than eating out frequently. Take advantage of free or low-cost activities: hiking, public pools, local festivals. If you own a vehicle, carpooling is common and well-accepted in Faroese culture. Joining collective purchasing groups and local associations sometimes provides access to preferential rates on certain products or services.