Living in Iceland: the ultimate expat guide

Iceland's immigration system varies significantly based on nationality and purpose of stay. As a member of the European Economic Area (EEA) and European Free Trade Association (EFTA), Iceland offers straightforward entry for European nationals while requiring more documentation from non-European applicants. Recent legislative changes in October 2025 have substantially improved conditions for skilled workers and their families, making Iceland more accessible than ever.

EEA/EFTA nationals: Freedom of movement

If you hold citizenship from an EEA or EFTA country, you benefit from free movement rights throughout Iceland. No work permit is required to take up employment. Your only obligation for stays exceeding 3 months is registration with Registers Iceland, the civil registry authority. This process is free and can be completed online or in person at their offices. You'll receive a kennitala (personal identification number), essential for all administrative procedures including banking, healthcare enrollment, and rental contracts.

Non-EEA nationals: Work-based residence permits

Citizens from outside the EEA/EFTA area must secure a work-based residence permit before arrival. The process begins with obtaining a signed employment contract from an Icelandic employer, who must demonstrate that no suitable local candidate is available. Initial permits are granted for 1 year and are renewable. A major improvement as of October 2025: skilled worker permits now extend to 4 years instead of 2 years, significantly reducing administrative burden.

Permit costs run approximately ISK 20,000 (USD 140). Processing times average 8-10 months for first-time applications, reduced to 3 months for renewals. Applicants must meet minimum income thresholds: ISK 247,572 monthly (USD 1,735) for single applicants, or ISK 396,115 monthly (USD 2,775) for married applicants. These thresholds were adjusted in February 2025 to reflect actual living costs.

Digital nomad visa and alternative options

Iceland offers a Digital Nomad Visa for remote workers and freelancers, valid for 6-12 months. Applicants must demonstrate monthly income of at least ISK 1,000,000 (USD 7,000). Note that this visa does not authorize local employment with Icelandic companies.

For seasonal work, particularly in tourism, a temporary work permit is available with duration matching the contract length. University graduates from Icelandic institutions now benefit from an extended grace period: permits can be renewed for up to 3 years post-graduation (increased from 6 months in October 2025) to facilitate job searches.

Application process step-by-step

The residence permit application follows a structured sequence. After securing your signed employment contract, gather required documentation: valid passport, police certificate (background check), health insurance, and proof of sufficient income. Submit a combined residence and work application to the Directorate of Immigration (Útlendingastofnun). Standard processing takes 90 days, but can be expedited to 30 days for highly qualified professionals in shortage occupations.

Dependent rights: Major 2025 breakthrough

October 2025 marked a significant policy shift for expatriate families. Spouses and children of skilled foreign workers can now work automatically without applying for separate work permits. This measure substantially eases family relocation and promotes economic integration. It directly addresses previous criticisms about Iceland's immigration rigidity.

Iceland also adopted its first comprehensive immigration policy in 2025, covering 2025-2038, with a clear vision: building an inclusive, multicultural society. A 4-year action plan (2025-2028) aims to improve newcomer integration through free Icelandic language courses and enhanced administrative support. For those planning long-term settlement, these recent developments make Iceland more welcoming than ever before.

Iceland's labor market stands out for its vitality and attractive compensation packages, among Europe's highest. With unemployment ranging between 3.2% and 5.0% seasonally, qualified professionals find opportunities relatively accessible. The country employed 220,500 workers in Q1 2025, with an employment rate reaching 80.3% by July. Iceland's economy has diversified beyond fishing toward technology, tourism, and renewable energy, creating fresh opportunities for international talent.

Compensation and salary structure

Iceland has no statutory national minimum wage. Instead, collective bargaining agreements between unions and employers determine sector-specific minimums. As of April 2025, the VR union indicates a minimum of ISK 425,985 monthly (approximately USD 2,985). Depending on sector, collective agreements set minimums between ISK 454,977 and ISK 489,940 (USD 3,185 to USD 3,430).

The average gross salary stands at ISK 868,000 monthly (USD 6,080), translating to a net salary of ISK 552,554 (USD 3,870) after taxes. These figures significantly exceed those in many Western countries, though Iceland's high cost of living must factor into financial planning. Encouragingly, salaries are growing rapidly, with a 7.6% increase in Q1 2025 compared to the previous year.

A notable benefit of Iceland's employment system: employees receive two guaranteed annual bonuses, in May (approximately ISK 50,000 or USD 330) and December (approximately ISK 92,000 or USD 600). These supplements help manage seasonal expenses and represent a valued tradition in Icelandic workplace culture.

In-demand sectors and occupations

Several sectors show consistent demand for qualified personnel. Tourism, representing 33% of GDP, remains a major employer in hospitality, catering, and visitor services. Information technology is experiencing explosive growth, particularly in fintech, gaming, and cleantech. Iceland also emphasizes renewable energy, leveraging its geothermal and hydroelectric resources.

The most sought-after roles in 2025 include software developers, nurses and healthcare professionals, engineers (especially civil and mechanical), construction workers, teachers, and tourism professionals. If you work in these fields, securing employment quickly is highly feasible. English generally suffices in tech and tourism sectors, though Icelandic proficiency is valued for customer-facing positions.

Sources: Wage Centre, Remote People

Starting your own business

Iceland encourages entrepreneurship with a business-friendly environment. To establish a company, first obtain your kennitala, then select your legal structure. The most common form for small operations is Einstaklingsfyrirtæki (sole proprietorship), while larger ventures typically choose Einkahlutafélag (Ehf.), equivalent to a private limited company.

Registration occurs through the Company Register (Fyrirtækjaskrá), managed by Registers Iceland. Fees vary by structure: approximately ISK 5,000 (USD 35) for sole proprietorship, and ISK 52,000 (USD 365) for a limited liability company, which also requires minimum capital of ISK 500,000 (USD 3,500). Corporate tax remains attractive at 20% on profits.

Freelancers must register as self-employed and manage their own social contributions, approximately 6.35% of income. VAT registration becomes mandatory once annual turnover exceeds ISK 2,000,000 (USD 14,000) over 12 months, with a standard rate of 24%.

Success in Iceland's job market requires targeting growth sectors, highlighting specialized skills, and adapting to a work environment that values work-life balance. Union membership, very common in Iceland, can provide valuable support in salary negotiations and employer relations.

Iceland derives its identity from exceptional geography and capricious climate, two elements profoundly shaping residents' daily lives. This volcanic island positioned on the Mid-Atlantic Ridge, at the boundary between Eurasian and North American tectonic plates, offers landscapes of raw, wild beauty. Understanding Icelandic climate and geography helps you better prepare and fully appreciate your expatriation.

Geography: Land of fire and ice

Iceland spans 103,000 km², making it Europe's second-largest island after Great Britain. The island sits just south of the Arctic Circle, between Greenland and Norway. Its unique geological position, straddling two tectonic plates, explains its intense volcanic and geothermal activity.

The territory counts approximately 130 volcanoes, with about thirty active. Recent eruptions, like the Eyjafjallajökull volcano in 2010 that paralyzed European air traffic, or regular Fagradalsfjall eruptions since 2021, remind us that Iceland is living, constantly evolving land. This volcanic activity fuels numerous hot springs and geysers dotting the country.

Glaciers cover approximately 11% of territory, including Vatnajökull, Europe's largest glacier by volume. These millennia-old ice masses feed powerful glacial rivers sculpting spectacular valleys. The contrast between black volcanic zones and pristine glaciers creates strikingly beautiful landscapes, justifying the nickname "land of fire and ice."

The northwestern and eastern fjords, carved by glaciers during ice ages, offer protected bays and vertiginous mountain landscapes. The central Highlands, uninhabited and virtually inaccessible in winter, constitute a lunar volcanic desert crossed only by a few summer tracks.

Climate: Temperate yet unpredictable

Contrary to what its name suggests, Iceland benefits from a temperate oceanic climate, relatively mild thanks to the Gulf Stream bathing its shores. Temperatures remain moderate year-round, but weather changes constantly, sometimes multiple times daily. The Icelandic saying goes: "If you don't like the weather, wait five minutes."

In summer (June to August), temperatures range between 10°C and 15°C (50-59°F) on average, with peaks potentially reaching 20-25°C (68-77°F) on beautiful sunny days. The sun barely sets, creating the midnight sun phenomenon. This period is ideal for exploring the country, with passable roads and lush nature. However, even in summer, always carry warm, waterproof clothing: showers can occur anytime.

Winter (November to March) sees temperatures drop between -5°C and 5°C (23-41°F) on the south coast, slightly colder in the north. Coasts benefit from moderating ocean influence, while inland areas experience lower temperatures. Wind, ever-present, intensifies cold sensation. Days are short, with only 4-5 hours of daylight in December, but it's ideal season for observing Northern Lights.

Precipitation is frequent but generally modest. Reykjavik receives approximately 800 mm of rain annually, distributed over 150 days. The southeast is significantly wetter (up to 3,000 mm), while the north is drier. Snow falls regularly in winter across all territory but melts quickly on coasts.

Wind: The dominant element

Wind constitutes the most striking and sometimes most challenging climatic element of Icelandic life. Storms are frequent, particularly in winter and spring, with gusts potentially exceeding 100 km/h (62 mph). These violent winds can make driving dangerous, temporarily close roads, and complicate travel.

Icelanders have developed appropriate wardrobes and habits: windproof waterproof clothing, careful attention to weather forecasts, flexibility in plans. Always consult vedur.is (Icelandic Meteorological Office) before any travel. The mobile app offers real-time alerts on weather conditions and road closures.

Climate impact on daily life

Icelandic climate profoundly influences lifestyles. Winter darkness can affect some expatriates' morale, triggering a form of seasonal depression called Seasonal Affective Disorder (SAD). Icelanders compensate through light therapy lamps, active social life, and stimulating indoor activities. Geothermal pools open year-round also offer comforting refuge.

Conversely, summer midnight sun can disrupt sleep cycles. Invest in blackout curtains for your bedroom if you're light-sensitive. This period nevertheless enables full enjoyment of outdoor activities and discovering the country in all its splendor.

Winter storms can occasionally cause temporary power outages, though the grid is generally very reliable. Always keep candles, flashlight, and some provisions at home as safety measures. Icelanders are accustomed to these uncertainties and manage these situations pragmatically.

Vegetation and fauna

Iceland possesses relatively poor vegetation due to its climate, recent geological history, and historical deforestation. Trees are rare, except in some replanted birch forests. Mosses and lichens dominate volcanic landscapes, creating fragile green carpets requiring decades to regenerate once trampled.

Terrestrial fauna essentially limits itself to the Arctic fox, the only indigenous land mammal. Icelandic horses, small but sturdy, form an integral part of cultural heritage. Introduced by Vikings, they're protected by law prohibiting any equine imports to preserve breed purity.

Iceland excels particularly in exceptional avian fauna. Coastal cliffs host millions of seabirds, notably adorable puffins (lundi) nesting from May to August. Geese, swans, and numerous duck species populate wetlands and lakes.

Icelandic waters teem with marine life: whales (humpback whales, orcas, minke whales), dolphins, seals, and great fish variety. Whale watching excursions from Reykjavik, Akureyri, or Húsavík offer memorable encounters with these ocean giants.

Adapting to Icelandic climate

Successfully expatriating to Iceland requires good climate adaptation. Invest in quality clothing: waterproof windproof jacket, thermal underwear, good waterproof hiking boots, gloves, hats, and scarves. The three-layer system (breathable layer, insulating layer, protective layer) is essential.

Adopt the Icelandic philosophy: "Það er ekkert sem heitir slæmt veður, bara slæm föt" (There's no such thing as bad weather, only bad clothes). Icelanders don't let weather stop them and continue their activities regardless of conditions. With appropriate equipment and the right mindset, you'll learn to appreciate and even love the island's changing climate.

Living in Iceland means accepting submission to nature's whims while discovering a unique relationship with the elements. This immersion in a powerful, sometimes hostile environment forges character and offers unforgettable experiences that few places on Earth can match.

Iceland presents unique transportation characteristics that directly influence expatriate daily life. With vast territory and population concentrated primarily in the southwest, transport infrastructure adapts to this geographic reality. Cars remain the preferred means of transport for exploring the country and accessing rural areas, while public transport suffices for daily life in Reykjavik.

Public transport in Reykjavik

The Strætó bus network serves Reykjavik and its metropolitan area with approximately twenty lines. Buses generally operate from 7 AM to midnight on weekdays, with reduced weekend frequencies. A single journey costs ISK 550 (USD 3.85), payable only by bank card or mobile app. Paper tickets have been eliminated, streamlining travel but requiring a functional bank card.

For regular users, a rechargeable Klippikort card offers reduced rates: ISK 4,400 (USD 31) for 10 journeys. Monthly passes also exist, around ISK 9,600 (USD 67), allowing unlimited travel throughout the covered zone. Children under 6 travel free.

The Strætó network extends to Akranes, Borgarnes, and other suburban municipalities, but service frequency remains limited compared to major European cities. The Strætó mobile app enables trip planning, real-time schedule consultation, and direct ticket purchase from your smartphone.

Car ownership: Essential for exploration

Car ownership quickly becomes necessary if you wish to explore Iceland beyond Reykjavik or live outside the capital. Distances are significant, inter-city public transport virtually nonexistent, and many natural sites remain inaccessible without personal vehicle.

Buying a used car often represents the best value. Prices vary considerably by model, age, and vehicle condition: expect between ISK 800,000 and ISK 3,000,000 (USD 5,600 to USD 21,000) for reliable vehicles. SUVs and 4x4s are highly prized due to winter road conditions and summer Highland access. Sites like Bílasalan.is aggregate used car listings.

Gasoline costs approximately ISK 270 per liter (USD 1.90), comparable to major cities. Car insurance is mandatory, costing between ISK 80,000 and ISK 150,000 annually (USD 560 to USD 1,050) depending on vehicle and driving history. Registration requires your kennitala and costs approximately ISK 15,000 (USD 105) annually.

Parking in central Reykjavik is paid from 9 AM to 6 PM weekdays, with rates around ISK 200 per hour (USD 1.40). Public parking lots offer daily rates. Outside the capital, parking is generally free.

Driver's licenses: Recognition and conversion

EEA/EFTA license holders can use their national license without time limitation. For non-EEA residents (Americans, Canadians, Australians), you can drive with your national license accompanied by an International Driving Permit for 6 months. Beyond that, you must exchange your license for an Icelandic license through Samgöngustofa (Transport Authority).

The exchange procedure requires certified translation of your license into Icelandic or English, medical examination, and fees of approximately ISK 15,000 (USD 105). No driving test is required for recognized licenses. Winter driving conditions in Iceland are rigorous: snow, ice, violent winds, and darkness require caution and adaptation.

Road network and driving conditions

Iceland maintains approximately 13,000 km of roads, of which only 5,000 km are paved. Route 1 (Ring Road) circles the island over 1,332 km and remains passable year-round, though temporary closures occur during winter storms. F-roads traverse the Highlands and open only in summer, from approximately June to September, mandatorily requiring 4x4 vehicles.

In winter, winter tires or studded tires are mandatory from November 1 to April 15. Most vehicles sold in Iceland come pre-equipped. Always consult road.is before any journey to check road conditions and potential closures. Storms can render certain roads impassable within minutes.

Strictly observe speed limits: 50 km/h in towns, 80 km/h on unpaved roads, 90 km/h on paved roads. Automatic speed cameras are numerous and fines steep. Drunk driving is severely punished, with maximum blood alcohol content of 0.5 g/L.

Domestic air travel

Two airlines operate domestic flights: Icelandair and Eagle Air. The Reykjavik-Akureyri route is most frequent, with several daily flights in 45 minutes for approximately ISK 15,000 (USD 105) one-way. Other destinations include the Westman Islands, Ísafjörður, and Egilsstaðir. These flights prove practical for quick business travel or reaching isolated regions in winter.

Cycling and soft mobility

Cycling gains popularity in Reykjavik, with a developing bike lane network. Windy and rainy climate limits daily use, however. Bike rental services exist, and several shops sell models adapted to Icelandic climate. Electric scooters have recently appeared, with app-based rental services in central Reykjavik.

For long distances, bike touring attracts summer adventurers. Route 1 is bikeable, though wind and terrain make the journey demanding. Campgrounds dot the route, facilitating stages. Plan 2-3 weeks to complete the full island circuit by bike.

Getting around Iceland requires adaptation and preparation, particularly in winter. Cars offer freedom to explore this exceptional territory, while public transport suffices for urban daily life. Whatever your option, Iceland's transport infrastructure, though limited, is reliable and enables full enjoyment of your expatriation in this multifaceted country.

Iceland's tax system operates on a progressive structure that's relatively straightforward compared to many European countries. Tax residents are taxed on worldwide income, while non-residents pay only on Icelandic-source income. Tax residency is established after staying more than 183 days within any 12-month period in Iceland. Iceland maintains tax treaties with numerous countries to prevent double taxation, including agreements with the US, UK, Canada, and Australia.

Personal Income Tax structure

Iceland's Personal Income Tax combines state and municipal taxes. For 2025, the national schedule includes three brackets. Income up to ISK 464,102 monthly (USD 3,250) is taxed at 31.45%. The next bracket, between ISK 464,102 and ISK 1,284,276 monthly (USD 3,250 to USD 9,000), faces a rate of 37.95%. Income exceeding ISK 1,284,276 monthly is taxed at 46.25%.

These rates already incorporate municipal taxes, which vary slightly by municipality but typically range from 14.45% to 14.52%. Reykjavik's municipal rate stands at 14.52% for 2025. Taxpayers receive a personal tax credit of ISK 75,762 monthly (USD 530), effectively reducing the tax burden.

Social security contributions are relatively modest: employees pay approximately 4% for mandatory pension contributions and 0.55% for union insurance. Employers contribute an additional 11.5%. Overall, the tax pressure on wages remains lower than in many European countries, though higher than typical Anglo-Saxon jurisdictions.

Corporate Income Tax

Companies established in Iceland face Corporate Income Tax at a flat rate of 20% on net profits. This competitive rate positions Iceland attractively for entrepreneurs. Companies must file tax returns by May 31 annually for the preceding fiscal year. The fiscal year follows the calendar year unless an approved alternative is selected.

Value Added Tax (VAT)

Iceland's Value Added Tax applies at three rates. The standard rate is 24%, covering most goods and services. A reduced rate of 11% applies to certain products and services including books, newspapers, hotel accommodation, and car rentals. Some essential services, particularly healthcare, education, and financial services, are fully VAT-exempt.

Business owners must register for VAT once annual turnover exceeds ISK 2,000,000 (USD 14,000). VAT returns are filed monthly or bi-monthly depending on business volume.

Additional taxes and levies

Iceland imposes Capital Gains Tax at 22% on capital gains from securities and real estate. Dividends are taxed at 22% with withholding at source. Property owners pay Property Tax (municipal real estate tax) ranging from 0.15% to 0.50% of assessed value, depending on the municipality. Reykjavik applies a rate of 0.234% for 2025.

The Inheritance and Gift Tax applies to wealth transfers, with progressive rates from 5% to 10% depending on relationship and amount. Spouses and registered partners enjoy full exemption.

Filing and payment procedures

Income tax returns must be filed by March 31 annually for the preceding tax year. Iceland operates a pay-as-you-earn system: employers withhold taxes directly from monthly salaries and remit them to Skatturinn (the Icelandic tax authority). You'll receive an annual statement and must settle any discrepancies.

Iceland's tax administration is fully digitalized with English-language access available on the official website, greatly facilitating procedures for international residents. For complex income situations or self-employment, engaging a local accountant (endurskoðandi) is advisable, though the system remains generally transparent and manageable.

Iceland operates a universal healthcare system ranked among the world's best, holding 2nd place in the Healthcare Access and Quality Index. All legal residents, regardless of nationality, receive comprehensive medical coverage upon enrolling in the system. Healthcare management centralizes under Iceland Health (Sjúkratryggingar Íslands), which coordinates care access and reimbursements. Infrastructure quality, healthcare professional availability, and treatment access are excellent, though waiting times can occasionally be lengthy for certain specialties.

Public healthcare enrollment

Once registered with Registers Iceland and holding your kennitala, you're automatically covered by the public healthcare system. EEA/EFTA residents can use their European Health Insurance Card during the first six months, then must enroll in the Icelandic system.

Non-European nationals must maintain private health insurance during their first 6 months of residence before becoming eligible for public coverage. This requirement particularly affects citizens from the US, Canada, Australia, and other non-European countries. After this initial period with confirmed residence, you automatically transition to public coverage at no additional cost.

Accessing care and costs

Primary care is delivered through health centers (heilsugæslustöðvar) distributed nationwide. A general practitioner consultation costs approximately ISK 4,500 (USD 30), with partial reimbursement by Iceland Health. Children under 18 and seniors over 67 receive free consultations.

Prescription medications are partially reimbursed. You pay a deductible, then Iceland Health covers an increasing proportion of pharmaceutical expenses as annual costs accumulate. Generic medications are widely available and substantially cheaper than brand-name drugs.

Hospitalizations in the public system are free or require minimal co-payments. The country's main hospital, Landspítali University Hospital in Reykjavik, provides cutting-edge care across all specialties. Regional hospitals operate in Akureyri, Akranes, and other towns, ensuring healthcare coverage nationwide.

Private supplementary insurance

While the public system is excellent, some expatriates choose private supplementary insurance to reduce waiting times or access non-covered services. Several companies offer suitable plans, notably VÍS, Iceland's leading insurance provider. Monthly premiums range from ISK 8,000 to ISK 25,000 (USD 55 to USD 175) depending on coverage extent and age.

For US citizens, international health insurance plans designed for expatriates can complement Iceland's system. UK citizens post-Brexit should verify their coverage status and consider supplementary options if needed.

Dental and optical care

Dental care receives only partial public coverage and often represents significant expense. Adults receive reimbursement capped at approximately ISK 25,000 (USD 175) every two years. A dental consultation costs around ISK 8,000 (USD 55), with treatments like fillings or crowns escalating quickly. Private dental insurance is highly recommended.

For optical care, the public system provides a subsidy of ISK 12,000 (USD 85) every two years for glasses or contact lenses. Eye examinations are available at numerous optical shops nationwide, with prices comparable to those in major international cities.

Mental health and emergency services

Iceland prioritizes mental health, with psychology and psychiatry services accessible through the public system. Psychologist consultations cost approximately ISK 6,000 (USD 42), partially reimbursed. Winter darkness and geographic isolation can affect some expatriates' mental health; don't hesitate to seek help if experiencing depressive symptoms.

For medical emergencies, dial 112, the unified number for all emergency services. Emergency services are free and of exceptional quality. Reykjavik maintains 24/7 emergency service at Landspítali, and major towns have operational emergency facilities.

With its high-performing and accessible healthcare system, Iceland offers reassuring peace of mind for expatriates. The combination of robust public coverage and supplementary private options allows everyone to find coverage suited to their needs and budget.

Iceland delivers impressive educational outcomes through a system emphasizing equal opportunity and individual development. The country invests heavily in youth education, and expatriate families benefit from varied options spanning free public schooling to private international schools. Iceland's pedagogical approach prioritizes autonomy, creativity, and student wellbeing, creating a nurturing yet stimulating learning environment.

Icelandic public education system

The public system is completely free from preschool through university, including for legal resident expatriate children. Preschool (leikskóli) welcomes children from age 1 to 6, with pedagogy centered on play and exploration. Though not compulsory, nearly all families enroll their children. Parental costs vary by income and can reach ISK 40,000 monthly (USD 280) for higher-income families, but remain very accessible.

Compulsory education (grunnskóli) runs from ages 6 to 16, divided into two cycles: Prathom (primary) and Matthayom (lower secondary). Instruction occurs in Icelandic, with strong emphasis on early English learning from age 8. Programs also include Danish or Swedish as a third language. Expatriate children often receive support Icelandic classes (íslenska sem annað mál) to facilitate linguistic integration.

Upper secondary (framhaldsskóli) covers ages 16-20, offering different tracks: general academic (equivalent to high school diploma), vocational, or technical. Qualifications earned are internationally recognized and enable access to European and North American universities.

International schools for expatriate families

Families seeking continuity in their children's education can choose from several international schools operating in Iceland. The International School of Iceland (ISI), located in Garðabær near Reykjavik, is the most established. It offers International Baccalaureate (IB) programs in English from preschool through secondary. Tuition fees are substantial: approximately ISK 2,500,000 annually (USD 17,500) for secondary level, with progressive reductions for younger students.

Other options include bilingual schools teaching in both Icelandic and English, offering an interesting compromise between local integration and international openness. These establishments typically cost less than purely international schools.

Higher education: Universities and tuition fees

Iceland operates several quality universities, including the University of Iceland (Háskóli Íslands), the largest and oldest, founded in 1911. It enrolls approximately 12,000 students and offers programs across all academic fields. Registration fees stand at approximately ISK 75,000 annually (USD 525) for EEA/EFTA students, making it one of Europe's most affordable study destinations.

Reykjavik University, a private institution, is renowned for computer science, engineering, and business programs. Fees there are higher: approximately ISK 950,000 annually (USD 6,650) for bachelor's degrees. The Iceland University of the Arts attracts creative students, while Bifröst University and Akureyri University offer alternatives outside the capital.

Most master's and doctoral programs are free, including for international students. PhD candidates often receive competitive salaries, as Iceland seeks to attract research talent. Instruction primarily occurs in Icelandic at bachelor's level, but many master's and doctoral programs are offered in English.

Scholarships and financial assistance

Several organizations offer scholarships for international students. The Icelandic Ministry of Education provides scholarships for studying Icelandic language, literature, and history. Rannís (Icelandic Centre for Research) funds graduate and doctoral students. The Iceland Research Fund (IRF) supports doctoral research projects, while the Iceland Student Innovation Fund (ISIF) assists bachelor's and master's students conducting summer research projects.

For students from European universities, Erasmus+ program scholarships are available for partner institution exchanges. Academic exchanges between Iceland and international universities are encouraged and relatively frequent in certain disciplines.

Whether choosing the Icelandic public system, an international school, or university, education in Iceland offers an exceptional learning framework, preparing youth to become global citizens while transmitting values of respect, equality, and innovation.

Finding accommodation in Iceland, particularly in Reykjavik, represents one of the main challenges for newcomers. The housing market is tight, prices are high, and supply is limited. The capital concentrates two-thirds of the population, creating strong demand for a restricted housing stock. However, with patience and thorough preparation, securing suitable accommodation is entirely achievable, whether renting or buying.

Rental market: Understanding prices and practices

The average rent for a one-bedroom apartment in central Reykjavik runs around ISK 195,000 monthly (USD 1,370), while a three-bedroom reaches ISK 330,000 (USD 2,315). In suburban areas, prices drop slightly: expect approximately ISK 160,000 (USD 1,120) for one bedroom and ISK 260,000 (USD 1,825) for three bedrooms.

These rates rarely include utilities (rafmagn, hiti, vatn), which can add ISK 15,000 to ISK 25,000 (USD 105 to USD 175) monthly depending on season. Heating, though typically geothermal and economical, remains a significant expense during long winter months. Electricity is inexpensive thanks to renewable energy sources.

Landlords typically require a security deposit equivalent to 2-3 months' rent, plus first month's rent in advance. Residential leases (húsaleigusamningur) are standardized and provide good tenant protection. Minimum duration is often 12 months with automatic renewal. Terminate your lease with 3 months' notice to avoid penalties.

Where to search for housing

Several online platforms facilitate housing searches. The government website Húsnæðis- og mannvirkjastofnun offers verified listings. Facebook groups like "Leiga á Íslandi" or "Housing in Iceland" are very active and sometimes reveal opportunities quickly. Local real estate agencies can also assist, charging fees of approximately one month's rent.

Beware of scams, unfortunately common given housing shortages. Never transfer money before viewing the property and signing a proper contract. Prioritize listings with recent photos and verifiable landlord contacts.

Neighborhoods and residential areas in Reykjavik

Reykjavik comprises several distinct neighborhoods. The city center (101), with lively streets like Laugavegur and Skólavörðustígur, appeals to young professionals and expatriates for its nightlife and shops. Rents are highest in the city, but urban quality of life compensates for those seeking excitement.

Vesturbær, west of the center, offers a quiet residential setting with beautiful period houses and proximity to Nauthólsvík beach. It's a family-friendly neighborhood, slightly less expensive than 101. Laugardalur, northeast, concentrates sports facilities and the botanical garden, attracting active families.

In neighboring municipalities, Kópavogur and Hafnarfjörður provide more affordable alternatives while remaining within 15 minutes of Reykjavik. These satellite towns offer more green spaces and larger accommodations, ideal for families with children. Public transport (Strætó) efficiently serves these areas.

Buying property: Investing in Iceland

If considering purchase, know that average price per square meter in Reykjavik sits around ISK 650,000 (USD 4,550), with significant variations by neighborhood. An 80 m² central apartment thus costs approximately ISK 52,000,000 (USD 365,000). In suburbs or mid-sized towns like Akureyri, prices drop 30-40%.

Mortgages are accessible to permanent residents, including expatriates. Banks typically require a minimum 20% down payment. Interest rates range from 6% to 8% depending on borrower profile and loan duration. Standard terms run 25-40 years.

Notary fees (stamp duty) represent approximately 1.5% of purchase price. Annual property tax varies between 0.15% and 0.50% of assessed value, depending on municipality. In Reykjavik, it stands at 0.234% for 2025.

Flatsharing and temporary alternatives

To facilitate initial settlement, flatsharing remains an economical and social option. A room in shared accommodation in Reykjavik costs between ISK 70,000 and ISK 100,000 monthly (USD 490 to USD 700), often with utilities included. It's an opportunity to meet other expatriates and share initial adjustment months.

Student housing (if pursuing studies) also offers affordable temporary solutions. Several university residences rent studios or shared apartments to international students with capped rents.

Finally, for initial days or weeks, prioritize Airbnb or guesthouses rather than hotels, often prohibitively expensive. This gives you time to visit neighborhoods, understand the market, and make informed choices. Finding housing in Iceland requires anticipation and flexibility, but with proper resources and persistence, you'll find accommodation matching your needs and budget.

Relocating to Iceland requires meticulous organization, especially when crossing the Atlantic with your belongings. Between administrative formalities, transporting possessions, and initial settlement days, every step matters. This detailed checklist guides your preparation to avoid unpleasant surprises and smooth your transition into Icelandic life.

Before departure: 2-3 months ahead

1. Secure official documents: Verify passport validity (at least 6 months beyond arrival date), obtain certified copies of birth certificates, marriage certificates, and diplomas. Have important documents translated into English or Icelandic by a certified translator, particularly university degrees and professional certificates.
2. Obtain your residence permit: If you're a non-European citizen, initiate your residence permit application immediately upon receiving your employment contract. Processing times can reach 8-10 months for first applications, so plan well ahead.
3. Arrange temporary health insurance: Non-EEA nationals must maintain private insurance for the first 6 months. Compare international coverage options and select insurance appropriate for Icelandic healthcare costs.
4. Organize shipping: Contact several international moving companies to compare rates. Sea freight takes 4-6 weeks from mainland Europe or North America. Prioritize air freight for essentials if your budget allows.
5. Cancel contracts: Electricity, gas, internet, phone subscriptions, local insurance, housing lease... Respect notice periods to avoid penalties. Request cancellation certificates for your records.
6. Prepare finances: Inform your bank about your expatriation to prevent card blocking. Check international transaction fees and consider opening a multi-currency account to facilitate money transfers between your home currency and Icelandic króna.

Just before departure: 1 month ahead

1. Complete comprehensive health check: See your physician, dentist, and optometrist. Obtain a supply of medications if following chronic treatment, with translated prescription. Medications are expensive in Iceland; better to arrive with sufficient stock for initial months.
2. Arrange vaccinations: While Iceland requires no mandatory vaccinations, ensure standard immunizations are current (tetanus, diphtheria, polio). International vaccination records may be requested.
3. Book temporary accommodation: If you haven't secured permanent rental, book Airbnb, guesthouse, or hotel for at least the first two weeks. This allows time to view apartments on-site.
4. Organize belongings: Sort between what you'll carry as accompanied baggage and what you'll ship in containers. Warm, waterproof clothing and hiking boots are essential. Plan generously for winter clothing, as Iceland experiences harsh weather conditions.
5. Notify authorities: Register with your country's consulate or embassy in Iceland. This facilitates administrative procedures and maintains voting rights.

Upon arrival: First weeks

1. Obtain your kennitala: Visit Registers Iceland immediately to register and receive your personal identification number. This is key to all future procedures: banking, healthcare, employment, taxes.
2. Open a bank account: Major Icelandic banks (Íslandsbanki, Arion Bank, Landsbankinn) welcome expatriates. Bring your passport, kennitala, and employment contract. You'll receive a Visa or Mastercard within days.
3. Enroll in healthcare: With your kennitala, you're automatically covered by Iceland Health. Receive your social insurance card and identify your nearest health center (heilsugæslustöð).
4. Arrange home insurance: Companies like VÍS offer policies for renters and owners. This is strongly recommended, sometimes required by landlords.
5. Set up internet and phone: Main operators (Síminn, Vodafone, Nova) offer combined internet-phone packages. Installation is quick, typically within one week. Mobile plans with unlimited data cost approximately ISK 5,000-8,000 monthly.
6. Enroll children in school: Contact educational institutions quickly to secure places, especially if targeting an international school. Places are limited and waiting lists sometimes lengthy.
7. Learn the transport system: Download the Strætó app for Reykjavik buses and purchase a rechargeable card. If considering buying a car, research import or local purchase procedures. Vehicle registration requires your kennitala.
8. Join the expat community: Facebook groups like "Expats in Iceland" or "Foreigners in Iceland" are excellent resources for asking questions, finding recommendations, and building your social network. Attending events organized by these communities greatly facilitates integration.

Relocating to Iceland is an exciting adventure requiring rigor and anticipation. By following this checklist and maintaining flexible attitude toward unexpected developments, you'll maximize your chances of successful settlement and fully enjoying your new life on this extraordinary island.

Iceland offers a unique lifestyle where omnipresent nature blends with a dynamic cultural scene and varied leisure activities. Despite its small population, the country buzzes with artistic creativity, cultural events, and sports opportunities. Whether you're a hiking enthusiast, music lover, history buff, or simply seeking relaxation in hot springs, Iceland delivers on all fronts.

Nature and outdoor activities

Living in Iceland without enjoying its spectacular landscapes would be unthinkable. Hiking constitutes residents' favorite activity, with trails suited to all levels. Routes around Reykjavik, like Mount Esja, offer panoramic views accessible within an hour's walk. For the more adventurous, multi-day treks through the Highlands, notably the famous Laugavegur Trail between Landmannalaugar and Þórsmörk, promise unforgettable experiences from June through September.

Geothermal hot springs punctuate the territory and constitute an important social ritual. Beyond the very touristy Blue Lagoon, explore local baths like Laugardalslaug in Reykjavik, Mývatn Nature Baths in the north, or numerous free natural springs scattered throughout the countryside. Icelanders regularly frequent these public pools (sundlaug), genuine community gathering places combining swimming, sauna, and conversation.

In winter, Northern Lights watching becomes a fascinating pastime. From September to April, these dancing lights illuminate the sky on clear nights. Distance yourself from urban lights to maximize your chances of witnessing the spectacle. In summer, enjoy the midnight sun to hike at any hour and explore the most remote regions.

Cultural life and events

Reykjavik, despite its modest size, pulses with an effervescent cultural scene. Harpa Concert Hall, with its futuristic architecture, hosts the Iceland Symphony Orchestra and international concerts year-round. The national theater, Þjóðleikhúsið, presents classical plays and contemporary creations, primarily in Icelandic but sometimes with English subtitles.

Festivals punctuate the Icelandic calendar. Iceland Airwaves in November transforms Reykjavik into the world capital of alternative music, attracting thousands of music fans. The Reykjavik Arts Festival in May celebrates visual and performing arts. In summer, the Secret Solstice Festival leverages the midnight sun for electronic and rock concerts in a unique atmosphere.

Museums also merit visits. The National Museum of Iceland traces Viking history and local culture, while the Reykjavik Art Museum exhibits contemporary Icelandic art. Don't miss the fascinating Perlan Museum, dedicated to glaciers and natural phenomena, offering a 360° view of the city from its glass dome.

Gastronomy and nightlife

Iceland's gastronomic scene has evolved considerably in recent years. Reykjavik boasts several Michelin-starred restaurants like Dill, Iceland's first restaurant to receive a Michelin star. Local cuisine showcases regional products: fish (cod, salmon, langoustine), free-range lamb, and dairy products (notably skyr, thick, protein-rich yogurt). Restaurants also feature traditional specialties like plokkfiskur (fish stew) or hangikjöt (smoked lamb).

Reykjavik's nightlife surprises with its intensity, concentrated on a few downtown streets, particularly Laugavegur. Bars and clubs open late with festivities extending into early morning on weekends. Alcohol remains very expensive due to high taxes: expect ISK 1,500 (USD 10) for a draft beer. Many Icelanders prefer gathering at home before going out to limit expenses.

Sports and fitness

Icelanders are very athletic and facilities reflect this. Municipal pools, present in every neighborhood, offer Olympic pools, slides, hot tubs, and saunas for approximately ISK 1,000 (USD 7) entry. Gyms like World Class or Hress provide modern equipment and group classes, with monthly memberships around ISK 12,000 (USD 85).

Football (soccer) is the national sport, with numerous amateur clubs and a passionately followed professional league. Joining a local team is an excellent way to integrate and build connections. In winter, handball takes over, with Iceland regularly excelling in international competitions.

For adventure seekers, Iceland offers infinite possibilities: snorkeling in the Silfra fissure, glacier climbing, sea kayaking, horseback riding on sturdy Icelandic horses, ski touring in northern peninsulas... Each season reveals new facets of this multifaceted island.

Living in Iceland means adopting a lifestyle where harmony with nature and cultural richness perfectly complement each other. Weekends divide between escapades into lunar landscapes, concert evenings, and relaxation moments in hot baths, creating a unique balance between adventure and conviviality.

Understanding Icelandic culture greatly facilitates integration and fulfillment in your new life. Icelanders cultivate strong values of equality, independence, and nature respect while maintaining deep connections to Viking traditions and singular history. Icelandic society is modern, progressive, and open, yet preserves certain cultural particularities worth knowing to avoid missteps and build authentic relationships.

Icelandic mentality and values

Icelanders are renowned for pronounced egalitarianism. Social hierarchy is minimal, and everyone uses first names, including with the Prime Minister. This horizontal structure reflects in informal, direct professional relationships. Don't expect rigid protocols or honorific titles: competence and good work trump status.

Independence and resilience are cardinal values, forged through centuries of survival in hostile environment. Icelanders value resourcefulness, courage facing adversity, and adaptability. This mentality also explains certain pragmatism and direct problem approach, without unnecessary detours.

Respect for nature is quasi-religious. Iceland having built its identity around volcanic landscapes and natural resources, residents are highly sensitive to environmental preservation. Never venture off marked trails, don't pick protected plants, and follow guidelines in natural areas. Mass tourism has sometimes created tensions, and residents appreciate visitors and expatriates who behave respectfully.

Language: Icelandic as identity guardian

Icelandic (íslenska) is a North Germanic language that has evolved minimally since Viking saga times. Icelanders are extremely proud of it and fiercely protect it against foreign influences. While virtually the entire population speaks fluent English, learning Icelandic is strongly encouraged and valued.

For initial months, English suffices largely in urban professional environments, shops, and administration. However, to access certain qualified public-facing jobs, obtain citizenship, or simply integrate fully into society, Icelandic learning becomes essential. Free or subsidized courses are offered to legal residents under integration policies.

Icelanders greatly appreciate foreigners who make the effort to learn their language, even imperfectly. A few simple words or phrases in Icelandic will open doors and smiles. Start with basics: Halló (hello), Takk fyrir (thank you), Góðan daginn (good day), Bless (goodbye).

Social life and interpersonal relations

Icelanders may seem reserved initially, especially compared to more expansive cultures. They don't open up easily and favor close friend circles, often established since childhood. However, once the ice breaks, they prove warm, generous, and loyal.

Punctuality is highly valued. Arriving late to professional or social appointments without notice is considered disrespectful. Always plan generously for weather conditions that can delay travel.

Icelanders appreciate frank, direct discussions. They say what they think without excessive sugar-coating, which can surprise initially. This frankness isn't rudeness but reflects their culture of honesty and efficiency. Similarly, don't hesitate to express your opinions or needs clearly; indirect communication or hints may be misunderstood.

Traditions and celebrations

The Icelandic calendar features unique celebrations. Þorrablót in February celebrates midwinter with traditional foods often bewildering to foreign palates: fermented shark (hákarl), sheep's head, ram's testicles. It's an opportunity to discover Viking culinary roots in festive atmosphere.

The summer solstice (June 21) occasions celebrations nationwide, with the famous midnight sun enabling extended festivities. Conversely, the winter solstice (December 21) marks the progressive return of light after months of darkness and is also celebrated.

Christmas (Jól) holds particular importance, with specific traditions like the 13 Yule Lads (Jólasveinar), mischievous elves who visit children during the 13 nights before Christmas. Each child places a shoe on the window ledge and receives either a small gift if well-behaved or a rotten potato if naughty.

New Year's (Áramót) is THE celebration of the year in Iceland. Reykjavik blazes with fireworks launched by individuals in an impressive spontaneous pyrotechnic display. Families gather, streets fill, and the atmosphere is electric.

Religion and beliefs

Though the Lutheran Church remains the state church, Iceland is a largely secularized society. About 65% of Icelanders claim Lutheran Church membership, but regular religious practice remains minority. Religion plays a role primarily during life transitions: baptisms, confirmations, weddings, and funerals.

A fascinating aspect of Icelandic culture is persistent belief in elves (álfar) and trolls (tröll). Approximately 50% of the population doesn't deny their existence, and construction projects are sometimes modified not to disturb rocks supposedly housing invisible creatures. This folklore tradition, blending superstition and nature respect, forms an integral part of Icelandic cultural identity.

Work-life balance

Icelanders place paramount importance on work-life balance. The standard work week is 40 hours, and overtime is rare in most sectors. Employers largely respect employees' personal time, and contacting colleagues outside work hours except for emergencies is frowned upon.

Parental leave is generous and equitably shared between both parents: each parent gets 3 non-transferable months, plus 3 months to divide freely. This policy promotes gender equality and enables fathers to fully engage in child-rearing from birth.

The education system reflects this philosophy with short school days and little homework, prioritizing children's wellbeing and development. Extracurricular activities (sports, music, arts) are well-developed and allow youth to develop talents while socializing.

Cuisine and gastronomy

Traditional Icelandic cuisine relies on local resources: fish (cod, salmon, langoustine), free-range lamb, and dairy products (notably skyr, thick, protein-rich yogurt). Ancestral preservation methods like smoking, drying, and fermentation remain prized.

Modern restaurants have transformed these simple ingredients into refined, creative New Nordic cuisine. Don't miss kjötsúpa (lamb soup), plokkfiskur (fish stew), rúgbrauð (geothermally-baked rye bread), and of course skyr consumed at breakfast or dessert.

Icelanders love coffee and consume it enormously. Cafés (kaffi) are important socializing places where people can spend hours discussing over cups. To-go coffee culture isn't as developed as in the US; people prefer sitting and enjoying the moment.

Integrating in Iceland requires patience, open-mindedness, and willingness to understand a culture both modern and deeply rooted in traditions. By respecting local values, making the effort to learn the language, and actively participating in community life, you'll discover a welcoming society that will make room for you. Iceland doesn't just serve as a place to live: it becomes a genuine personal transformation experience for those who settle with open hearts.

Iceland ranks among Europe's most expensive countries, if not the world, for daily living costs. This reality stems from several factors: island location necessitating product imports, small population, high salaries, and significant taxation. However, Icelandic salaries largely offset these high expenses, enabling residents to maintain a good standard of living. Understanding expense categories precisely helps establish realistic budgets before relocating.

Monthly budget for a single person

Numbeo data for August 2025 enables estimating monthly expenses for a single person living in Iceland. The following table details main budget categories, excluding rent, providing clear visibility into daily costs.

Sources: Numbeo Iceland (August 2025)

Monthly budget for a family of four

A family of four (2 adults, 2 children) will logically see expenses increase significantly, particularly for food, housing, and activities. Here's a realistic estimate of main budget categories.

Sources: Numbeo Iceland (August 2025)

Retail prices: Practical benchmarks

To better visualize living costs, here are average prices for common products and services in Reykjavik: a meal at a mid-range restaurant costs ISK 3,000-4,000 (USD 21-28), coffee ISK 600 (USD 4.20), a local beer in a bar ISK 1,500 (USD 10.50), fast-food meal ISK 2,000 (USD 14).

At the supermarket, expect to pay approximately ISK 300 (USD 2.10) for a liter of milk, ISK 400 (USD 2.80) for white bread, ISK 600 (USD 4.20) for a dozen eggs, ISK 2,000 (USD 14) for a kilogram of chicken, and ISK 400 (USD 2.80) for a kilo of potatoes. Fresh imported fruits and vegetables can reach staggering prices in winter.

Gasoline costs approximately ISK 270 per liter (USD 1.90), comparable to major international cities. A cinema ticket runs ISK 2,000 (USD 14), a monthly gym membership ISK 12,000 (USD 85), and entry to a public pool ISK 1,000 (USD 7).

Strategies to reduce expenses

Several tactics help limit spending without sacrificing quality of life. Favor discount supermarkets like Bónus (recognizable by its pink pig) and Krónan, where prices run 20-30% below premium chains. Cook at home rather than dining out daily, as restaurant meals are very expensive.

Take advantage of free natural hot springs scattered across the country rather than paying entry to expensive tourist sites. Municipal pools offer excellent value for relaxation and socializing. Use public transport or cycling rather than car ownership if living in Reykjavik, as maintenance and parking costs are high.

Purchase winter clothing and sports equipment during sales or from secondhand shops. Iceland has numerous fatamarkaður (flea markets) where bargains abound. Finally, enjoy free or low-cost activities: hiking, natural hot spring bathing, free concerts, and community festivals.

With an average net salary of ISK 552,554 (USD 3,870), most expatriates manage to live comfortably despite high living costs. The key is anticipating these expenses in your budget and adapting consumption habits to Icelandic realities. The quality of life-to-cost ratio remains very favorable, especially when factoring in social benefits, safety, and the exceptional beauty of the living environment.