Iceland Digital Nomad Visa

The long-term visa for remote workers no longer has a threshold to look up, because the long-term visa provision in the Foreign Nationals Act was repealed on 13 May 2026, at the same time as Visa Act No. 37/2026 entered into force.

The replacement is a short-term residence permit, and its threshold is a subsistence amount rather than a level of remote-work income: according to the Directorate of Immigration requirements page, measured on 30 September 2026, an applicant must show secure means of support of at least ISK 259,951 a month, or ISK 415,922 a month for a married couple, for as long as the permit is valid.

The bank statement used as evidence must be an original certified by the bank itself; a printout from online banking is not considered sufficient. Health and accident insurance valid in Iceland for the duration of the stay, with minimum coverage of ISK 2,000,000, is also required.

The ISK 259,951 figure is the reference amount the Directorate applies to residence permit applicants generally, and it applies to applications received from 18 May 2026.

The long-term visa was abolished on 13 May 2026, and the replacement route is not open to remote workers. The legal framework for the short-term residence permit is Regulation No. 725/2026 amending Regulation No. 540/2017 on Foreign Nationals, signed by the Ministry of Justice on 11 June 2026, published in the Official Gazette on 26 June 2026 and in force immediately; as of 30 September 2026 the Directorate of Immigration has published a requirements page and the paper application form D-111.

The regulation lists the cases in which this permit may be granted, and the list has only two: close family members, meaning a spouse, parent, child or sibling, making an extended visit; or artists, scientists and athletes whose stay does not require a work permit.

The two purpose conditions are cumulative, not alternatives: the applicant must fall within one of those two groups AND have a purpose of stay not covered by any other residence permit category. Remote work falls within neither group, so the absence of a dedicated permit category for it does not open this route; the Regulation also singles out the case where the purpose of the stay is one for which a residence and/or work permit should be sought on another legal basis.

Even for those who qualify, the route is a poor substitute for a digital nomad stay because of four limits: a continuous stay may not exceed 180 days, with time in another Schengen state counted as time in Iceland; the permit cannot be renewed and may be granted only once in any 12-month period; holders are not authorised to work, save for certain groups exempt from the work permit requirement for up to 90 days per calendar year; and the permit neither allows registration of legal domicile nor serves as a basis for permanent residence.

A decision on a new application can take up to six months. Those who need a visa may not apply while in Iceland. Those who do not may apply while in Iceland, provided their stay while applying is legal, meaning they have not stayed in the Schengen Area for more than 90 days within the past 180 days; they must however leave Iceland before their 90-day Schengen visa-free period expires, rather than stay on to await the decision.

The move from the old route to its replacement took place in three steps. First: on 13 May 2026 Visa Act No. 37/2026 entered into force, responsibility for issuing visas moved wholly from the Directorate of Immigration to the Ministry for Foreign Affairs, the long-term visa provision was repealed, and the new provision on short-term residence permits took effect at the same moment; the Directorate announced that the requirements and application process would be published as soon as available.

Second: Regulation No. 725/2026, signed on 11 June 2026 and published in the Official Gazette on 26 June 2026, set out the detailed conditions for the permit and entered into force immediately.

Third: on 8 July 2026 the Directorate reported that the amendments to the Regulation on Foreign Nationals concerning short-term residence permits had taken effect in the preceding weeks. Measured on 30 September 2026, the "Short-term residence permits" entry on the Directorate forms page links to the route's guidance page, whose apply button points to paper application form D-111.

On processing, the Directorate states that a decision on a new application can take up to six months. The permit is granted for a maximum of 180 days and cannot be renewed.

The residence conditions of the replacement route are now stated as a number of days. Under Regulation No. 725/2026, the short-term residence permit allows a stay in Iceland of up to 180 days; a continuous stay may not exceed 180 days, the permit's validity is set to that ceiling, and time spent in another Schengen state counts as time spent in Iceland.

Once the permit expires the holder may not remain in Iceland. The regulation and the Directorate's rights and obligations page both state one exception: a visa-exempt foreign national may remain within the Schengen Area for up to 90 days after the permit has expired.

The applicant must not intend to settle in Iceland, must have a purpose of stay not covered by any residence permit category, must not have been issued a short-term permit in the past 12 months, and must not be younger than 18 unless the application is submitted in connection with that of a parent or legal guardian.

The permit does not allow registration of legal domicile and cannot serve as a basis for permanent residence. Competence is also split from 13 May 2026: visas, visa extensions and seafarer visas sit with the Ministry for Foreign Affairs, while the short-term residence permit sits with the Directorate of Immigration.

The replacement route confers no right to family reunification. The Directorate of Immigration rights and obligations page, measured on 30 September 2026, states that the short-term residence permit does not confer the right to family reunification.

Regulation No. 725/2026 allows a person under 18 to be issued the permit where the application is submitted in connection with a short-term residence permit application by a parent or legal guardian.

On finances, the applicant need not show independent means of support if the applicant's spouse has sufficient financial means and that spouse is either also applying for a short-term residence permit or already residing in Iceland; the same exception applies to a minor applicant supported by a parent. The reference amount for a married couple is ISK 415,922 a month.

The status this programme grants, whether a visa or a residence permit, does not replace the holder's passport. The holder still travels on the passport of their own country, so the figure below belongs to the Iceland passport and becomes the holder's only once they are issued a Iceland passport.

According to the Passport Index of Prosperous Intelligence, on data dated 30 September 2026, the Iceland passport reaches 194 destinations without applying for a consular visa in advance. The figure combines three forms of entry and does not count an e-Visa that must be obtained beforehand:

It is therefore a measure of how easily the holder travels, not a count of visa-free countries in the narrow sense.

For comparison, on the same source and the same method of counting, the Vietnamese passport reaches 44 destinations. The two lists of destinations do not nest inside one another, so the difference is an indication rather than a list of places newly opened.

Prosperous Intelligence dates its data and advises checking with the destination’s official authorities before travelling.

This route has no special tax regime, and the tax question is answered by Iceland Revenue and Customs according to months of presence. A person staying in Iceland for less than six months in a twelve-month period has limited tax liability, paying tax only on income arising from Icelandic sources.

A stay of six months or more in twelve months makes the person a resident with unlimited tax liability on worldwide income, from the day of arrival. Former residents remain subject to unlimited liability for three years after leaving, unless they prove they have become taxable in another country.

For remote workers, the sentence to read is on the general guidance page: all individual personal services carried out by foreign parties in Iceland are liable to taxation, and a payment is taxable whether made by a domestic or a foreign party.

Withholding tax for 2026 has three brackets: 31.49 per cent on income up to ISK 498,122, 37.99 per cent up to ISK 1,398,450, and 46.29 per cent above that. The personal tax credit is ISK 72,492 a month.

Limits of this cell: the tax authority's pages do not mention the short-term residence permit or remote workers specifically, nor which tax treaty applies. Those points should be put directly to the tax authority before moving.

The short-term residence permit is priced at ISK 12,200 on the Directorate of Immigration fee table — and that figure is worth reading next to the other lines of the same table, because it is markedly cheaper: a permit based on work is ISK 80,000, for students ISK 70,000, on special ties and on grounds of legitimate and special purpose ISK 40,000, for a spouse ISK 110,000, for an au pair ISK 120,000.

The fee is not refunded once the application has been submitted, including where the applicant cancels it. This route is filed on paper only, in original form, sent by mail to the Directorate of Immigration or delivered to the drop box in the Directorate's reception at Dalvegur 18, Kópavogur; the fee must be paid beforehand, and unpaid applications are returned.

Two further costs are mandatory: health and accident insurance valid in Iceland for the duration of the stay with minimum coverage of ISK 2,000,000, and a return ticket or proof of the means to pay for the return when the stay ends.