Capital Controls in Iceland
As a part of temporary emergency measures after the 2008 financial crisis the Icelandic Government, in cooperation with the International Monetary Fund, authorised the Central Bank to initiate Capital Control measures. The Capital Controls are currently being lifted in accordance with an approved plan for removal of capital controls.
Cross border movement of capital is regulated with specific guide lines as to how and when it may occur but new direct investment in Iceland is exempt as explained below.
New foreign Investments
The new investment program established by the Central Bank of Iceland is considered the first step in the liberalisation of the capital controls.
A new investment in Iceland is based on the new inflow of foreign currency that is converted to domestic currency at a financial corporation in Iceland.
Investors that are interested in utilising this concession must submit a notice of investment to the Central Bank which is prepared by a domestic bank. A new investment must be announced to the Central Bank within two weeks before the new inflow of foreign currency is converted to domestic currency.
Similarly, if the new investment is liquidated, the investor must obtain the assistance of a domestic financial corporation, which will prepare a request of an exit permit that is sent to the Central Bank of Iceland. Once the Central Bank has confirmed the request for an exit permit, the foreign exchange transactions is exempt from the statutory restrictions on foreign exchange transactions and cross-border movement of capital.
The Central Bank of Iceland offers companies and investor other opportunities to move foreign currency to and from Iceland.