Iceland is famous for its stunning glaciers, waterfalls, and vast lava fields. In winter, the Northern Lights dance across the skies, while in summer, daylight lingers well past midnight. However, moving to Iceland will treat you with more than just great views. The country has a rich culture and offers a high quality of life—with excellent healthcare, education, and social support.
It’s no wonder Iceland is becoming a hotspot for expats. According to 2025 figures, nearly 20% of Iceland’s population is made up of foreigners. If you’re thinking of joining the nearly 81,300 foreign nationals living in Iceland, check out this Remitly guide, where we’ll cover 2025 visa rules, best places to live, living costs, and what day-to-day life looks like in the country.
Getting started with visas and residence permits
Are you wondering how to move to Iceland in 2025? You’ll need a visa or a residence permit. The rules differ for European Economic Area (EEA) citizens and non-EEA nationals. If you’re a non-EEA citizen working remotely, you may also qualify for Iceland’s digital nomad visa.
EEA citizens
Citizens of countries in the EEA and the European Free Trade Association (EFTA), such as Liechtenstein and Norway, can live in Iceland visa-free. If you’re staying for over six months, register with Registers Iceland to get a Kennitala (national ID), needed for services like banking and healthcare.
To register, complete Application A-271 online before arrival. Upon arrival, visit Registers Iceland or a local police station with your passport and required documents, which may vary depending on your reason for staying. Approval usually takes five business days, and you’ll receive a registration certificate by email confirming your legal residence.
Non-EEA citizens
Non-EEA nationals, including US citizens, need to obtain a residence permit before moving to Iceland. The type of permit depends on the purpose of your stay:
- Work permit: Requires a confirmed job offer and employment contract from an Icelandic employer. Submit the contract with your application before arriving in Iceland.
- Student permit: Requires proof of enrollment at an Icelandic educational institution, sufficient funds, and health insurance.
Iceland residence permits can take up to 90 days to process, so apply early. Non-EEA citizens can qualify for permanent residency after living in Iceland for four continuous years with a valid permit.
Digital nomad visa
Iceland’s digital nomad visa allows non-EEA/EFTA nationals to work remotely in the country for up to 180 days.
- You’re from a non-EEA/EU/EFTA country
- You don’t need a visa to travel to the Schengen area
- You haven’t received an Iceland digital nomad visa in the past 12 months
- You’re engaged in remote work for employers operating outside Iceland
- You have no intention of settling in Iceland
- You can show proof of minimum monthly income: ISK 1,000,000 (about $7,100 or €6,700)
Required documents:
- The application form, filled out correctly
- Copy of passport (valid for at least 90 days beyond your stay)
- Passport photo (35×45 mm, taken within the last six months)
- Payment receipt (ISK 12,200)
- Proof of health insurance covering at least ISK 2,000,000
- Proof of purpose (letter from your employer)
- Proof of income (employment contracts, bank statements, or pay slips)
- Clean criminal record (if requested)
Application process:
- Fill out the application form online, print, and sign.
- Pay the fee via bank transfer and keep the receipt (including name and date of birth).
- Submit your application by mail to Dalvegur 18, 201 Kópavogur (if applying from abroad) or in person at the Directorate or a District Commissioner’s office (if already in Iceland).
Processing takes three to four weeks. Once you’re approved, travel to Iceland within 90 days and contact utl@utl.is to get your visa. The visa is non-renewable. When it expires, remote workers and freelancers should wait 12 months before reapplying.
Breaking down the cost of living in Iceland
Iceland is among the countries with a high cost of living, but it also boasts a high quality of life. March 2025 data shows that a single person in Iceland spends about 357,541 ISK ($2,828) monthly, including rent, while a family of four needs around 738,201 ISK ($5,680).
At the time of writing (May 2025), 1 USD = 127 ISK.
Housing costs
Urban (Reykjavík):
- One-bedroom apartment: 200,000 to 300,000 ISK ($1,544 to $2,316)/month
- Prices may be higher for newer buildings or locations with scenic views
Suburbs and rural areas:
- One-bedroom apartment: 150,000 to 250,000 ISK ($1,158 to $1,930). You may find lower prices in remote towns.
According to Numbeo’s comparison tool, here’s how the cost of living in Iceland compares with the US and other European nations:
| 2025 cost comparison | Iceland | US | Germany | France |
| Meal (mid-range for two) | 18,000 ISK ($141.01) | $75 | €65 | €60 |
| Eggs (12) | 803.95 ISK ($6.30) | $4.29 | €3.33 | €3.77 |
| Potatoes (1kg) | 447.32 ISK ($3.50) | $2.94 | €1.37 | €2.06 |
| Red table wine (1 bottle) | 2,950 ISK ($23.11) | $15 | €5 | €7 |
| Utilities (85² apartment) | 11,183.22 ISK ($87.61) | $208.44 | €302.71 | €185.24 |
| Internet (60 Mbps) | 10,783.47 ISK ($84.48) | $71.63 | €44.70 | €30.05 |
| Transport (monthly pass) | 10,450 ISK ($81.86) | $65 | €55 | €62 |
| Jeans (Levi’s) | 17,222.35 ISK ($134.92) | $52.18 | €80.80 | €90.32 |
Note: These are research estimates. Actual cost can vary, so budget 10% extra.
These comparisons can help you estimate your monthly budget and determine if living in Iceland aligns with your financial goals.
While the cost of living in Iceland is higher compared to the US and many European countries, there are practical ways to manage your expenses while living or visiting Iceland.
Tips for managing expenses in Iceland
- Buy local produce to cut down on imported food costs.
- Cook at home, as restaurants can be pricey, especially for tourists and expats.
- Use geothermal heating and energy-efficient appliances to lower utility bills.
- Take the bus or buy a monthly transport pass instead of driving everywhere.
- Shop second-hand for clothes, home goods, and furniture via online marketplaces or local thrift stores.
Best places to live in Iceland for expats
Reykjavik: the vibrant capital
As Iceland’s capital and largest city, Reykjavik is the cultural and economic heart of the country. It offers a vibrant art scene, diverse dining options, and various amenities.
Neighborhoods like Vesturbær provide a peaceful, residential atmosphere close to the city center, perfect for families and those seeking calm. Meanwhile, Laugardalur is known for its parks and sports arenas, making it popular with active residents.
Akureyri: the capital of the north
Located in Northern Iceland, Akureyri is known for its friendly community and slower pace of life. Residents enjoy city conveniences like schools, healthcare, and cultural spots, all surrounded by beautiful fjords and mountains. It’s an ideal location for those seeking a quiet urban lifestyle close to nature.
Selfoss: gateway to natural wonders
Selfoss is a growing town in Southern Iceland with a welcoming community. It’s a good location for outdoor lovers, with easy access to geysers, waterfalls, and hiking trails. The town offers amenities like schools, shops, restaurants, and healthcare. Its central location also makes it ideal for exploring the southern coast.
Kópavogur: suburban comfort
Located just south of Reykjavik, Kópavogur offers a mix of urban and suburban living. It’s another ideal location for families seeking a quiet environment with easy access to city amenities like shopping, schools, and recreational areas.
Hafnarfjörður: rich history and community
Hafnarfjörður, just southwest of Reykjavik, is famous for its Viking history and lively culture. This town hosts many festivals and has a friendly community. It’s a great location for people who enjoy Icelandic traditions and a welcoming atmosphere.
Essential tips for moving to Iceland
Before moving to Iceland, knowing what to expect in daily life can help you settle in smoothly:
Languages: Icelandic and English
Icelandic is the official language, but English is widely spoken, especially in Reykjavik and other cities. Most Icelanders speak fluent English, making it easy for newcomers to communicate.
Opening a bank account
To open a bank account in Iceland, you’ll need:
- A kennitala (your Icelandic ID)
- Passport
- Proof of residence
Major banks include Landsbankinn, Arion Bank, and Islandbanki. After getting your kennitala, you can apply for an electronic ID to open an account online.
Health insurance
Iceland has universal healthcare. After living in the country legally for six months, you’re covered by Iceland’s public health insurance. Non-EEA citizens need private insurance for the first six months.
Driving and public transport
You can drive in Iceland with a valid US driver’s license, as well as licenses from Canada and EEA countries.
Speed limits:
- Maximum speed limit: 90 km/h (about 60 mph)
- Urban areas: 50 km/h (31 mph)
- Gravel roads: 80 km/h (50 mph)
Stay within posted speed limits to avoid hefty fines.
Public transport:
Reykjavik has a reliable bus system called Strætó that covers the city and nearby suburbs. However, public transport is limited outside the capital, so most people choose to drive.
If you’re moving to Iceland, understanding local customs and social life can help you feel at home.
Gender equality and inclusivity
Iceland’s commitment to gender equality has made it a global leader in progressive policies. Companies with more than 25 employees are required to get equal pay certification to show they pay men and women equally. Gender quotas are also mandated for boards of directors in medium and large companies.
Cultural life
The Icelandic cultural scene is vibrant and diverse:
- Museums and galleries: Reykjavik has many institutions, such as the National Museum and the Reykjavik Art Museum, that display Iceland’s history and art.
- Festivals: Every August, Reykjavik Culture Night fills the city with performances and exhibitions. In November, the Icelandic Airwaves music festival brings international artists and visitors.
- Local celebrations: Town festivals like Hamingjudagar (Happiness Days) in Holmavik and Irskir dagar (Irish Days) in Akranes showcase authentic Icelandic community life.
Nature’s wonders
Iceland‘s natural scenery is integral to its cultural identity:
- Northern lights: From late September to early April, the aurora borealis lights up the sky, and the best views are found away from city lights.
- Waterfalls: Iconic sites like Gullfoss and Skogafoss offer stunning views and are easily accessible to visitors.
- Geothermal hot springs: The Blue Lagoon, near Reykjavik, provides a relaxing experience in mineral-rich waters, surrounded by volcanic views.
Day-to-day life in Iceland
If you want to settle in Iceland smoothly, it’s important to learn about the education system, safety, work culture, and how to get involved with the community:
Education
Iceland has a robust education system with preschool (ages 1-6), compulsory (ages 6-16), upper secondary (optional for ages 16-20), and higher education. Most educational institutions are publicly funded and free for residents. The University of Iceland offers programs taught in English, such as International Studies in Education, for international students.
Safety
Iceland is widely recognized as one of the safest countries in the world, ranking at the top of the 2024 Global Peace Index (GPI). Factors contributing to this include low crime rates, a high standard of living, and a strong sense of unity. The country’s small population and effective law enforcement further enhance its safety profile.
Work-life balance
Iceland values work-life balance. The typical workweek is about 36 hours, and many jobs offer flexible hours. This helps workers feel happier and less stressed. The country also supports families with long parental leave and affordable childcare.
Social integration
Expats in Iceland can fit in by joining local clubs, going to cultural events, and taking language classes. Groups like InterNations also hold events just for expats to help build connections. Getting involved in these activities will make settling in easier and more enjoyable.
Financial prep: budgeting for the big move
Careful financial planning is key to moving to Iceland. Here are a few things to keep in mind:
Save in advance
Start saving money early to pay for housing deposits, transportation, and daily expenses during your first weeks. Since Iceland’s cost of living is high, having extra money saved up is helpful.
Secure money transfers
Use trusted money transfer services like Remitly to move funds safely and at better exchange rates. Avoid carrying large amounts of cash to minimize risks.
Learn how Iceland’s tax system and social security work, especially if you’ll be working there. Knowing this early helps you avoid surprises and stay compliant.
Final takeaway
Iceland combines stunning nature, progressive values, and a high quality of life, making it a top choice for expats. Its stunning scenery and welcoming culture create an inspiring environment.
To make your move successfully, plan carefully, manage your finances wisely, and embrace Icelandic culture fully. For a smooth transition, explore secure money transfer options like Remitly to safely send funds abroad.
Your Iceland adventure awaits!
FAQs about moving to Iceland
Is it difficult to immigrate to Iceland?
It depends on your nationality and reason for moving. EU/EEA citizens have an easier process, while others may need visas or work permits.
Can US citizens move to Iceland?
Yes, US citizens need to apply for the appropriate visa or residence permit before moving, usually for work, study, or family reasons.
How do I find housing in Iceland?
Start by searching online rental sites and local listings. It’s helpful to connect with local agencies and prepare for deposits and paperwork.
What are the downsides of living in Iceland?
High cost of living, long winters with limited daylight, and some isolation from larger cities can be challenging for newcomers.