Workers from third countries - Work permits

Foreign nationals who are not citizens of Member states of the European Economic Area (EEA) and who come to Iceland for the purpose of engaging in employment are required to hold work permits. Work permits are normally only issued in those occupational sectors in which there is a shortage of labour and it is not considered likely that domestic labour will be found to fill the positions. An employer wishing to employ a third country national has to assure the Directorate of Labour that no suitable resident labour is available for the vacancy in order to obtain a work permit. Once admitted into the labour market, equal treatment applies in labour law and taxation. 

Work permits may be put into three categories:
 Temporary work permit: A temporary permit granted to an employer, allowing him to employ a foreign national, usually for a period of 12 months.
 Permanent work permit: A permit with no time restriction, granted to a foreign national and allowing him to work in Iceland.
 Specialist work permit: A temporary permit granted to a foreign national in connection with specialized tasks.

Foreign spouses of Icelandic citizens, and their children aged up to 18 are exempt from requirements regarding work permits.

Temporary work permits

Temporary work permits are issued by the Directorate of Labour on the basis of an application by an employer seeking to employ a non-EEA national. 

The main conditions for granting a temporary work permit are as follows:
 that qualified persons cannot be found in Iceland, that occupational sectors in the country lack workers, or that there are other special reasons for granting such permits. 
 the employer must submit an application to the regional employment office for workers, except where it is a foregone conclusion, in the opinion of the Directorate of Labour, that such an application will prove unsuccessful.
 the local trade union or the appropriate national federation, has made its comment on the application from the employer. The Union must submit its comments within 14 days of receiving the application from the employer. However, this condition may be waived in special cases where there is no trade union or national federation in the relevant occupation.

Further requirements 
 Employment contract. This document must be prepared and signed by both parties covering a specific period of employment or task and guaranteeing the worker wages and other terms of employment equal to those enjoyed by local residents. See Act No. 55/1980.
 Health insurance. Employers hiring non-EEA personnel must take out health insurance covering the first 6 months of their stay in Iceland. After 6 months non-EEA personnel enjoy equal treatment within the social security system.
 Expatriation. The employer is responsible for sending the worker back to his home country at the end of his employment in Iceland, if the worker becomes incapable of working for a long period due to illness or accident and in the event of the termination of employment for which the worker is not responsible. 
 Health certificate. Satisfactory health certificate for the worker must be submitted to the Directorate of Labour. 
 Regulated professions. If the worker is engaged to provide services within occupational sectors which require certain professional qualifications the applicant employer must provide the Directorate of Labour with evidence that his professional qualifications have been recognized by the relevant authorities in Iceland.

Permanent work permits

Non-EEA nationals who hold unlimited work permits are in the same position on the labour market as Icelandic citizens. They are no longer tied to a specific employer, as is the case in the case of temporary work permits and are therefore free to change their occupation. 

The main conditions for granting an unlimited work permit are as follows:
 the foreign national has been legally domiciled in Iceland, and has lived there, for three consecutive years,
 the foreign national has acquired a residence permit in Iceland under the Act on Foreigners,
 a temporary work permit has previously been issued to him.

These conditions may be waived in cases where an Icelandic citizen divorces, or terminates cohabitation with a foreign spouse or partner. The marriage, registered partnership or registered cohabitation must have lasted for at least two years, and the foreign spouse or partner must have been legally domiciled in Iceland for at least the same length of time on a continuous basis. Furthermore, it may be permitted to waive these conditions in the case of a foreign spouse or partner in the event of the death of an Icelandic spouse or partner or in a case involving the spouse or partner of a foreign national who holds an unlimited work permit, or his or her children aged 18 or older.

The same applies in the case of a foreign national who has taken a course of studies in Iceland lasting at least three years, and has completed it.

Specialist work permit

In special circumstances, a temporary work permit may be granted to a non-EEA worker whom it is planned to send to Iceland in the service of a company that does not have a branch in Iceland.  Such permits are not normally granted for periods longer than six months on the basis of the same service contract. A service contract must have been made with a company in Iceland that includes a statement to the effect that a condition for the transaction under the contract is that a worker of the foreign company is to provide the service here in Iceland.

Four weeks exemption

Non-EEA workers who fall into the following categories are exempt from the requirements regarding work permits for periods of up to four weeks each year:

 Scientists, scholars and lecturers, as regards teaching or comparable activities.
 Artists, with the exception of instrumental performers who enter into employment in catering establishments. The exemption under this item does not apply to dancers who appear in nightclubs.
 Athletics coaches.
 Representatives on business visit for companies that do not have branches in Iceland.
 Drivers of passenger coaches registered in foreign countries, providing that the vehicles are carrying foreign tourists to Iceland.
 Journalists and reporters from foreign news media who are in the service of companies that are not established in Iceland.
 Workers, consultants and instructors working on the assembly, installation, supervision or repair of equipment.