Sp/f, private company (limited liability company)Faroe Islands
What it takes to form, own and run a private limited company in Faroe Islands, and how its profit is taxed. Each figure links to the page it was read from.
This company type
At a glance
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Eitt kapitalfelag kann verða stovnað av einum ella fleiri stovnarum.
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Like an entrepreneurial company, a private company can have a board, as well as one or several directors
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as from 1 January 2017 the demand was lowered to DKK 50.000
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The charge for registering a public limited company is DKK 3,500, and for a limited liability company the charge is DKK 2,500.
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Partafeløg, smápartafeløg, kommanditfeløg, sparikassar og lutafeløg, sum hava partapening, inngoldnan innskotspening, ábyrgdarpening ella lutapening, ið er kr. 50.000 ella meiri, umframt vinnurekandi grunnar og tryggingarfeløg og íverksetarafeløg, gjalda av uppgjørdu inntøkunum 18% í skatti.
Form it
Who registers it
- Registry
- Formed without visiting
- Not stated
The registry’s and the law’s own pages do not mention it.
- Formed online
- No
What it takes to form
- A notary
- Not required
- A resident director
- Not required
- Paying up the capital
- Proof of paid-in share capital must be submitted before the company can be registered, in cash or other assets.
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It is important that proof of paid-in share capital is submitted before the company can be registered, either in cash or other assets.
Own it
Who may own and run it
- Directors
- At least 1 · individuals only
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Like an entrepreneurial company, a private company can have a board, as well as one or several directors
- Shareholders
- At least 1 · a company may be one
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Eitt kapitalfelag kann verða stovnað av einum ella fleiri stovnarum.
- Members
- At least 1 · one person may form it alone
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Eitt kapitalfelag kann verða stovnað av einum ella fleiri stovnarum.
- A local company secretary
- Not required
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Eitt kapitalfelag kann velja millum hesar leiðslubygnaðir: 1) Ein leiðslubygnað, har leiðslan í kapitalfelagnum er ein nevnd, sum stendur fyri yvirskipaðu og strategisku leiðsluni.
- A local registered agent
- Not stated
The registry’s and the law’s own pages do not mention it.
Each year, at the registry
- Annual registry fee
- DKK 700 (about €94)
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Ársgjaldið fyri partafeløg er í løtuni 1200 kr. og fyri smápartafeløg og íverksetarafeløg 700 kr.
- Accounts on the public record
- Yes
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Skjølini eru alment atkomulig, sbr. tó § 186.
- Audit for a small company
- Not required
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companies can submit annual accounts that have not been audited
- 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.
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companies can submit annual accounts that have not been audited
Important dates
When each obligation falls due, as the authority states it.
- Submit the annual accounts for the financial year
- 6 months after the end of the accounting period
With Skraseting Foroya
No later than 6 months after the end of the financial year. For a calendar-year company the registry states the deadline as before 1 July.
- Notify changes of board and management
- Not in our records
With Skraseting Foroya
Not stated on skraseting.fo/en/companies/notification-of-changes when checked
What is public
- Directors
- Public
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Stjórnar-, nevndar- og eftirlitsráðslimir, og møguligur grannskoðari, í einum felag skulu skrásetast í kt-skipan Skráseting Føroya.
- Shareholders
- Public
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Stjórnar-, nevndar- og eftirlitsráðslimir, og møguligur grannskoðari, í einum felag skulu skrásetast í kt-skipan Skráseting Føroya.
- Beneficial owners
- Public
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Stjórnar-, nevndar- og eftirlitsráðslimir, og møguligur grannskoðari, í einum felag skulu skrásetast í kt-skipan Skráseting Føroya.
Tax
Tax on profit
How this company type is taxed, which can differ from its place’s headline rate.
Flat · 18%+1 regime
Partafelagsskattur: 18% of taxable income, split 30% municipal and 70% national tax, for companies with share capital of DKK 50,000 or more.
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Partafeløg, smápartafeløg, kommanditfeløg, sparikassar og lutafeløg, sum hava partapening, inngoldnan innskotspening, ábyrgdarpening ella lutapening, ið er kr. 50.000 ella meiri, umframt vinnurekandi grunnar og tryggingarfeløg og íverksetarafeløg, gjalda av uppgjørdu inntøkunum 18% í skatti.
Work it out on a profit figure: the company’s tax, the owner’s, and what is left.
Special regimes that may apply
- Tonsaskattalógin (Løgtingslóg um skatt av reiðarívirksemi) tonnage
Limited companies (partafeløg) and small companies taxable under § 1 no. 8 of the Skattalógin that carry on shipping business of the kind named in § 4 jfr. § 5 of the Act Løgtingslóg nr. 51 frá 9. mai 2005 um skatt av reiðarívirksemi (Tonsaskattalógin), § 1 og § 12; seinast broytt við løgtingslóg nr. 33 frá 26. mars 2021
Whether a company qualifies depends on its activity and conditions set in each statute.
- CFC rules in Faroe Islands
- Not in our records
Close it
Closing it
The other end, which most guides leave out.
- Route
- Closed by a notification of closure registered with Skraseting Foroya.
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If a company closes it has to be registered by Skráseting Føroya
- Statutory fee
- Not in our records
Every business in Faroe Islands
VAT
- 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
Payment and banking services
None of the services whose lists we hold names Faroe Islands. Each provider, and what a listing means.
Reference
Its name and code
- Kind
- Private limited companyDerived our grouping, the same words in every country
- Name in law
- Sp/f, private company (limited liability company)
- Identifier
- FO-PRIVATE-LIMITEDA form ISO 20275 does not list.