Iceland shortage-of-employment work permit

Deep coverageReviewed 2026-09-06

Iceland grants temporary work permits for a shortage of employees only in exceptional circumstances, to respond to temporary fluctuations in the Icelandic labour market. The employer must first look for someone who already has unrestricted access to the Icelandic labour market, and must give specific detailed reasoning for why workers from outside the EEA, the EFTA states and the Faroe Islands are needed. A first permit runs up to one year and may be renewed for up to two years.

Core requirements

labourSearchRequired

The assistance of the Directorate of Labour must have been requested to find an employee in Iceland and within the EEA, the EFTA states or the Faroe Islands.

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employerReasoningRequired

The employer must provide specific detailed reasoning regarding the necessity of hiring foreign employees from outside the EEA, the EFTA states or the Faroe Islands, including why their employment is important to the business operations.

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exceptionalOnlyRequired

Permits of this kind are granted only in exceptional circumstances and are intended only to respond to temporary fluctuations in the Icelandic labour market. Before applying — and also when applying for an extension — the employer must search for an employee who already has unrestricted access to the Icelandic labour market.

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durationRequired

A shortage permit granted for the first time for a specific job may be granted for up to one year at a time. Where the shortage is due to seasonal fluctuations in the domestic labour market or seasonal projects such as the slaughter season, permits can be granted for that period. Such permits can be renewed for up to two years.

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jobAdvertisementConditional

The Directorate may consider it necessary to advertise the job through the Directorate of Labour and its EURES employment service, sending applicants a deadline and instructions for registering the advertisement. An advertisement should be actively advertised for at least three weeks, and the requirements may not be tailored to the individual applied for, but must take the form of what may generally be required of people doing similar work.

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regulatedTradesConditional

Where the job is a regulated trade, a licence must be obtained first: under regulation No. 940/1999 and Article 2 of Industrial Law No. 42/1978, only licence holders may do such work. Information on recognition of qualifications and licensing is available from ENIC/NARIC; once a formal assessment exists, a copy of the authorisation issued by the District Commissioner of East Iceland and the ENIC/NARIC assessment letter must be submitted to the Directorate of Labour.

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healthProfessionsConditional

Where the job is a licensed health profession, a licence must be obtained first: under Article 2(1) of Act No. 34/2012 on healthcare workers, only those granted a licence may do such work in Iceland. Information on recognition and licensing is available from the Directorate of Health, and a summary of other regulated professions is published by the Ministry of Higher Education, Science and Innovation.

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noWorkBeforeGrantRequired

An employee may not start working until the work permit is granted. All work permits are limited to a specific employer and do not transfer to a new employer; someone working for more than one employer must apply for a work permit from each.

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extensionRequired

An extension must satisfy all the same conditions as the first grant, so the employer may have to advertise the job again unless the Directorate of Labour grants an exemption, and must have paid the tax and insurance premium for the work. The extension application must be submitted to the Directorate of Immigration four weeks before the previous permit expires; work with the same employer is generally allowed while it is processed.

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newEmployerRequired

Changing job requires a work permit application from the new employer, and work may not start before it is granted. The process is the same as for a first shortage permit, so the employer must generally advertise the job again unless the Directorate of Labour grants an exemption.

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jobLossConditional

Someone on a shortage work permit who loses their job can apply to the Directorate of Immigration for a six-month residence permit to seek a different job. If the employee leaves before the permit expires, applicants must inform the Directorate of Immigration, and notifying by e-mail to work@utl.is is sufficient. The general rules of the relevant collective agreement apply to termination, as employees working on a work permit enjoy the same rights as domestic employees.

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Official sources

General educational information only, not personalized immigration or legal advice. Requirements can change; confirm them with the responsible government authority before acting. Next scheduled review: 2026-12-06.