Faroe Islands
Faroe Islands: 4 company types, its taxes, banking and business environment.
Forming a company
Company types in the Faroe Islands
The 4 forms a founder can choose here, each with its own figures. Open one for its sources.
Doing business here
Business accounts
Providers whose own published list of countries names Faroe Islands. A listing means a company formed here may apply, not that it will be accepted.
Not in our records No provider's country list has been read for Faroe Islands.
EU listings
Two lists a bank checks when it opens an account for a company or its owner.
- EU high-risk third countries (AML)
- Not listed
- EU non-cooperative jurisdictions for tax purposes
- Not listedOfficial EUR-Lex, 52026XG01465, Annex I as of 2026-02-17
Official sites
The authorities’ own sites for Faroe Islands: where to register, file and check.
Blocs and agreements
The trade arrangements Faroe Islands belongs to, as each arrangement’s own texts state them: since when, and what each covers. What a membership means for a business is for you to judge.
Faroe Islands’s own position
- Customs territory
- Its own
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Unless the goods are exempt by law, customs duty is levied on all imports to the Faroe Islands.
- VAT territory
- Its own
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When the value of the order is more than DKK 300, you always have to pay VAT, in Faroese MVG
- European Union: internal market and customs union
- Outside
The Treaties do not apply to the Faroe Islands (TFEU art. 355(5)(a)); Reg. 952/2013 art. 4(1) carves the Faroe Islands out of the Danish part of the Union customs territory; the Faroese Government states the islands are regarded as a third country in the context of the EU. Trade with the EU runs under the 1996 EU-Faroe Islands free trade agreement (in force 1 Jan 1997 per its art. 40(3)), not through membership.
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the territory of the Kingdom of Denmark, except the Faroe Islands and Greenland
- European Union: VAT territory
- Outside
Danish VAT law does not apply to the Faroe Islands and the Danish tax authority lists the Faroes among territories outside the EU; the Faroes levy their own VAT (MVG) under a Faroese VAT Act administered by TAKS.
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Momsloven gælder ikke for Færøerne og Grønland. Færøerne og Grønland er ikke medlem af EU.
- Agreements in force
- The authority’s own list read 27 Oct 2026
Regional and customs arrangements only, 36 of them; bilateral trade agreements are not yet in our records.
Tax
Company tax
Tax, and what the company owes the registry each year.
- Corporate income tax
- 18%
- Distributions
- Not in our records
- Audit
- Under the Annual Financial Statements Act no. 206 of 12 Dec 2025 (in force for financial years from 1 Jan 2026), § 156 stk. 2: a class B company may omit the audit if on two successive balance sheet dates it does not exceed two of: balance sheet DKK 1.25 million, net sales DKK 2.5 million, average 12 full-time employees. The registry's exemption page still cites § 135 of the former act with DKK 1 million / 2 million / 12.Official The registry or ministry page as of 2026-10-10
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companies can submit annual accounts that have not been audited
- Small-company relief
- Not in our records
- Annual obligations
- Not in our records
- Annual registry fee
- DKK 700Official The registry or ministry page as of 2026-10-14
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Ársgjaldið fyri partafeløg er í løtuni 1200 kr. og fyri smápartafeløg og íverksetarafeløg 700 kr.
VAT
The tax on what the company sells in Faroe Islands, and when it must register, as the tax authority states it.
- Standard rate
- 25%
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The VAT rate is 25% and is payable when sales of goods and taxable services are taking place at all stages in the chain of distribution within the Faroe Islands.
- Other rates
- 0% Exports of goods and services
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The VAT is not payable, however, if the goods or services are exported.
- Registration threshold
- DKK 50,000 · about €6,689
annual sale of goods and/or services (total sales before expenses); annual
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If your annual sale of goods and/or services amounts to less than DKK 50.000, you are not required to pay VAT to the Treasury.
- A foreign company
- The same threshold applies; needs a local tax representative
A foreign business with VAT-liable activity in the Faroe Islands registers once its sales there exceed DKK 50,000 during a 12-month period, and must have a registered representative in the islands if it has no place of business or residence there.
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Foreign businesses which have established VAT liable activity in the Faroe Islands, must register in Vinnuskráin, if their sales of goods or services on the Faroese VAT territory exceeds DKK 50,000 during a 12 month period.
- Returns filed
- Quarterly
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Companies are required to settle their VAT four times a year.
- Tax authority
- Registration page read 2026-10-22
Tax calendar
When the main returns and payments fall due in Faroe Islands, tax year 2025, as the tax authority states it.
- Corporate tax return
- 1 July · each year
The company return and accounts for 2025 are due 1 July 2026, filed through the Vinnugluggi.
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Sjálvuppgáva Skal altíð latast inn Skal tastast inn á Vinnuglugganum Freistin er 1. juli 2026
- Corporate tax, final payment
- Not in our records
taks.fo/fo/vinna/skattur/partafelagsskattur inaccessible when checked
- Corporate tax, instalments
- 20 October · each year
Corporate tax falls due in three instalments, 1 October, 1 November and 1 December, each payable by the 20th of the month (20 October, 20 November, 20 December). The rule records the first; the other two follow monthly. Frequency is recorded as annual because the three payments settle one year's tax.
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Skatturin hjá partafeløgum, feløgum o.ø. fellur til gjaldingar í trimum gjøldum, 1. oktober, 1. november og 1. desember við gjaldfreist til 20. í mánaðinum.
- Personal income-tax return
- 4 May · each year
The personal return for 2025 is due 4 May 2026. It is filed through the Borgaragluggi.
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Hevur TAKS sent tær bræv um, at tú skalt lata inn sjálvuppgávu fyri 2025? Freistin er 4. mai 2026
- Personal income tax, final payment
- Not in our records
taks.fo/fo/borgari/sjalvuppgava-2025/freistir-og-mannagongdir inaccessible when checked
- Personal income tax, instalments
- Not in our records
taks.fo/fo/vinna/skattur/fyribilsskattaskraseting inaccessible when checked
- VAT return
- Day 10 of the following month · each quarter
Quarterly return: the deadline is the 10th of the second month after the quarter, i.e. 10 May, 10 August, 10 November and 10 February; the second quarter is the exception, due 24 August. The Faroese text adds that a deadline falling on a weekend or public holiday moves to the next working day ('Fellur á vikuskifti ella halgidag, er freistin fyrstkomandi gerandisdag').
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Innlatingarfreistir Freistirnar at lata inn mvg-uppgerðir eru hesar: Fyri 1. ársfjórðing (januar-februar-mars) er freistin 10. mai Fyri 2. ársfjórðing (apríl-mai-juni) er freistin 24. august Fyri 3. ársfjórðing (juli-august-september) er freistin 10. november
- Payroll withholding
- Not in our records
taks.fo/fo/borgari/skattur/p-tal-og-loenarutgjald inaccessible when checked
Running the company
Running a company here
Not in our records The authorities’ pages on running a company have not been read for Faroe Islands yet.
Economy and trade
What it exports
Goods Faroe Islands exported, by product, as a share of its goods exports each year. Exports include goods passing through for re-export. A share describes Faroe Islands’s own trade; it does not compare places.
Not in our records The trade data we use (CEPII BACI, January 2026 release) does not report Faroe Islands separately.