It covers payment methods and information on, banking systems, foreign exchange controls, and U.S. and correspondent banking
Methods of Payment
Methods of Payment rom Iceland to a foreign entity can be made without formality or delay through commercial and savings banks. All normal methods of payment are used. Creditinfo offers credit reports on Icelandic companies, lists of defaulting debtors, and related information. Local collections agencies include Inkasso and Motus.
For more information about the methods of payment or other trade finance options, please read the Trade Finance Guide.
The Central Bank of Iceland is an independent institution owned by the Icelandic government that operates under the auspices of the Prime Minister. Its objective is to promote price stability, financial stability, and sound and secure financial activities. The bank also maintains international reserves and promotes a safe, effective financial system, including domestic and cross-border payment intermediation. For more information see the Central Bank of Iceland’s website.
The Icelandic banking sector is generally healthy. The Central Bank of Iceland has since the financial collapse of 2008 introduced stringent measures to ensure that the financial system remains “safe, stable, and effective.” There are three commercial banks in Iceland, Landsbankinn, Islandsbanki, and Arion Bank. The Government of Iceland took over operations of the banks during the financial collapse in September and October 2008. Landsbankinn (formerly known as Landsbanki Islands) is government owned, and the government is in the process of privatizing Islandsbanki (formerly known as Glitnir.) Arion Bank (formerly known as Kaupthing Bank) has been privatized and is listed on the Icelandic stock exchange Nasdaq Iceland. There is one investment bank in Iceland, Kvika, which is listed on Nasdaq Iceland. Icelandic pension funds offer loans and mortgages and are active investors in Icelandic companies. There are no foreign banks operating in Iceland.
All companies have access to regular commercial banking services in Iceland. Businesses have access to financing with the commercial banks. Establishing a bank account in Iceland requires a local personal identification number known as a “kennitala.” Foreign nationals should contact Registers Iceland for more information on how to register in Iceland.
Foreign Exchange Controls
The Act on Investment by Non-residents in Business Enterprises no. 34/1991 and no. 46/1996 states that “non-residents who invest in Icelandic enterprises shall have the right to convert into any currency, for which the Central Bank of Iceland maintains a regular exchange rate any dividends received or other profits and proceeds from sales of investments.” Capital controls imposed following the collapse of Iceland’s financial sector in 2008 were largely lifted in 2017.
The Central Bank of Iceland publishes the official exchange rate on its website. “The exchange rate of the Icelandic krona is determined in the foreign exchange market, which is open between 9:15hrs. and 16:00 hrs. on weekdays. Once a day, the Central Bank of Iceland fixes the official exchange rate of the krona against foreign currencies, for use as a reference in official agreements, court cases, and other contracts between parties that do not specify another reference exchange rate; cf. Article 19 of the Act on the Central Bank of Iceland, and it fixes the official exchange rate index at the same time.”
U.S. Banks and Local Correspondent Banks
There are no U.S. banks with operations in Iceland. Icelandic banks facilitate transfers between major international banks and Iceland.