Iceland Implements Significant Residence and Work Permit Reforms

Key Point  

• Iceland enacted major changes affecting international students, work permits, post‑study employment, short‑term residence permits and application processing under amendments effective July 2024. 

Iceland Introduces Wide‑Ranging Immigration Rule Changes 

Iceland implemented significant amendments to the Act on Foreign Nationals and the Foreign Nationals’ Right to Work Act, with additional regulatory changes affecting students, work authorization, family reunification, short‑term stays and application prioritization.  

The amendments took effect July 8, 2026, following parliamentary approval on June 18, 2026. 

Work Permit Processing Moves to the Directorate of Immigration 

Responsibility for processing work permit applications and issuing work permits has officially transferred from the Directorate of Labour to the Directorate of Immigration. 

• Existing guidance pages will remain active temporarily. 
• Updated, consolidated guidance will be published in the coming weeks. 

New Rules for International Students 

Students must now show 75% completion of a full‑time course load at every renewal, not just the first. 

Work Authorization Without a Permit 

Students may work up to 60% of full-time employment without obtaining a separate work permit.  

When Students May Work Over 60% 

Students may exceed 60% only if: 

• Work occurs during official academic breaks. 
• They have completed a university degree in Iceland and are seeking specialist employment. 
• The work is part of a formal internship or training program. 

Employment Information Required at Renewal

Students must provide employment details at renewal. The Directorate may request employment information at any time and may revoke work rights if rules are violated. 

Post‑Study Stay Rules Updated 

Extended Stay After Graduation 

Graduates may renew their student residence permit for up to 18 months to seek employment, reduced from the previous three-year period. 

• Eligible degrees: Bachelor’s, Master’s and Doctoral. 

Specialist Permit for PhD Graduates 

PhD graduates may renew a specialist residence permit for up to 12 months without needing a work permit. 

Family Reunification Changes for Students 

Family reunification is now limited to students enrolled in full‑time university programs leading to a Bachelor’s, Master’s, or Doctoral degree. 

• Diploma program students are no longer eligible. 
• Students are no longer eligible to sponsor parents under family reunification provisions. 

Application Prioritization & Risk Assessment 

Prioritization Authority 

The Directorate may prioritize complete applications, including: 

• New student permits before the academic year 
• Athlete permits during transfer windows 
• Complete employment‑based applications 

Document Reliability and Risk Assessment

The Directorate may not approve applications based on documents with questionable authenticity or credibility. 

Short‑Term Residence Permits 

A new regulatory chapter establishes short‑term residence permits for stays over 90 days but under 180 days for: 

• Visiting close family members 
• Artists 
• Scientists 
• Athletes 

These permits provide a legal pathway for medium‑length stays previously not covered by standard categories. 

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