Starting any business in a foreign country takes a lot of time and energy. You should prepare for a roller coaster ride and make sure you have tightened the seat belt before you move. Please note that below I am sharing my journey with the Indian Food Box restaurant in Iceland. I have tried my level best to explain it in detail, but if you have any questions, please don't hesitate to contact us.
You can register your business in three forms:
Individual: Start the business your way. If the business is likely to make under 1 million ISK per annum, you can register this way. You need to fill in one form, and there will be a fee of up to 5.000 ISK. If your income goes over 2 million ISK per annum, you will need to make a VAT registration. Time process: 2 to 3 working days.
Partnership: More than one person is required here. The partnership firm costs 68.000 ISK to register. A partnership deed is created here. The partnership tax rate is 37.6%, and it changes every year. Time process: 7 working days.
Company: A single person or more than one person can register a company. 131.000 ISK is required to register a company. An accountant can charge 20-40.000 ISK for the registration process. A company then gets its ID number, known as a kennitala. You need to create an Article of Association, memorandum article, and fill the prescribed form at the Icelandic tax office. Time period: 7 working days.
A company is a legal entity
You can receive a salary.
You also need to decide who will be the Chairman and Managing Director of the company.
The initial tax rate is 20%. Every change in the act costs 3.500 ISK.
You need to make a big decision by deciding if you would be buying or renting premises. In Iceland, you need to pay two months in advance, and most of the restaurant or business rental contracts are issued for a minimum of five years if both parties agree.
Buying property is a challenging task, but if possible, we recommend that you go for that. Please remember that every building in Iceland has residential fees to pay every month.
(25% you have to pay)
You can check your loan credentials on creditinfo.is.
A1, A2, B1, B2, C1, C2, D1, and D2. (Anything after D is BAD). You are allowed to check your credit score free once per year.
We took a loan from Arionbanki, Borgartún 18, 101 Reykjavík.
They requested the following papers:
* Our experience and education
* 2 years’ future cashflow
The loan decision takes 2-3 weeks. We were requested to obtain extra insurance as in Iceland they differentiate between property value and insurance value.
We were charged 50.000 ISK for the property evaluation. Time period: 1 day. The bank did this and they sent their property inspector. Don't forget that you would be paying monthly insurance fees also.
We would advise you to open an account with the same bank from whom you acquired the loan. A company bank account takes only one day to open. You can even do it online. Two people would be required to sign the papers. A 4 digit pin option can be requested for the money transfer. It would help if you also decided on whether to obtain a bank card at this point.
Secret Tip: Ask the Bank to put the option of charging the bank account automatically for the loan every month. You can save 600 ISK every month. It's not a lot, but still, something is better than nothing.
It cost us 1.500 ISK to register our company at the Icelandic tax office. You will then receive a tax card number for your company. My advice would be to request your accountant to do it.
We went to every Indian restaurant and tried the food. This was done to check out the setup and see what we can do even better in our business. Always go and check the market before you start something.
You need to get a Company Board. If you are planning to open a restaurant business, you can get this money paid back to you by a soda company. You have to sell their products in your establishment in return. They would also provide you with refrigerators. They have a certain budget, and you can use it for the company promotion stuff/clothing/etc. Please remember that these boards are expensive; please check carefully before placing the final order.
I will create a special article on this subject, but would like to tell you now that you need to make a few decisions here. The food license costs 160,000 ISK, and it's for ten years.
Would you sell alcohol? (Different license)
Selling cigarettes (Different license)
Please have the following things ready(minimum):
Please buy the types of equipment that you need. In excitement, especially chefs, tend to buy more than is needed. The biggest problem you could have is space. Make sure your place has ample room for the guests.
A lot of ideas would be running in your head. Always remember you can't do everything alone. Make sure you find the right team to assist you along the journey. Don't try to make the business complicated, or it could finish before it starts. Always think, what if you are not there, can this business still run on AUTOPILOT mode.
Thanks a lot for reading the article, and guys, if you are looking to try Grandma's Style Indian Food, don't forget Indian Food Box and support my website.