National Grants and Funding Agencies
Rannís – Technology Development Fund (TDF)
Grant categories and amounts – Rannís continues to offer multiple non‑dilutive grants, but the maximum award sizes and co‑financing requirements are sometimes misstated. The Fræ (Seed) grant is capped at ISK 2 million and requires no co‑financing; recipients must complete the project within 12 months. The Sproti (Sprout) grant provides up to ISK 20 million spread over two years (no more than ISK 10 million the first year) and normally does not require matching funds. The Vöxtur (Growth) grant can reach ISK 50 million over two years (max ISK 25 million per year) and does require co‑financing, though the percentage depends on the applicant’s size and project type. Markaðsstyrkir (Market Development/Expansion) grants are aimed at SMEs that already spend ≥10 % of turnover on R&D; they provide up to ISK 10 million and require at least 50 % matching funds. The Sprettur (Sprint) program (higher‑value grants to accelerate commercialization) has not been available in the autumn 2025 call and may only be offered in the spring. These corrections should replace vague or inaccurate figures in the original text (e.g., “1.5‑2 million” for Fræ or “no co‑financing required for Vöxtur”).

Success rates and programme mix – The spring 2025 allocation report shows 480 applications and 69 funded projects (≈14 % success rate) across categories such as Fræ, Sproti, Vöxtur, Sprettur and market‑oriented grants. Mentioning these numbers adds context on how competitive the fund is.
Lóu – Rural Innovation Fund
Funding limits and co‑financing – The Lóu fund is a regional program run by the Ministry of Higher Education, Science and Innovation. For 2025 it has ISK 100 million to distribute. Each project may receive up to 20 % of the annual allocation (≈ ISK 20 million) and must provide at least 30 % co‑financing. This fund specifically targets innovation outside the Reykjavík area; projects must be past the early‑idea stage and align with digital, health‑tech and sustainability goals. Including these caps clarifies the program’s scope.
Loans and Public Venture Capital
Byggðastofnun
The Icelandic Regional Development Institute offers several loan types and transportation‑equalization grants, but the earlier report lacked detail. The institute’s public website notes that it provides general loans, green loans, innovation loans, agricultural loans, and special loans for women’s entrepreneurship in rural areas; it also administers transportation‑equalization grants to support manufacturing industry costs. In June 2024 the European Investment Fund signed an InvestEU guarantee with Byggðastofnun enabling €21 million in new lending to at least 50 rural SMEs, targeting young farmers, remote communities and women‑led startups. These facts should be included.
Nopef and NEFCO
The Nordic Project Fund (Nopef), managed by NEFCO, offers interest‑free conditional loans up to €50 000, covering up to 50 % of feasibility‑study costs. If the project proceeds to implementation abroad, the loan converts to a grant; if not, 50 % may still be forgiven. Over 100 Icelandic companies have received funding from Nopef. The original report should highlight the convertible nature of this loan and the eligibility criteria (companies must have < 250 employees and turnover < €50 million).
NSA Ventures and Kría
NSA Ventures is a state‑owned VC fund. A Northstack article from 2015 explained that its typical first investment is around ISK 50 million, with capacity to invest up to ISK 200 million per company and a maximum around ISK 400 million. These figures are more accurate than the previously stated SEK 1‑10 million range. In late 2023 the government announced plans to merge NSA Ventures with Kría, the national fund‑of‑funds launched in 2021, to create a stronger hybrid fund. The overview should reflect this merger plan and clarify that Kría invests indirectly via private VC funds and accelerators.
Export credit guarantees
Iceland does not have a separate export‑credit agency akin to Sweden’s EKN/SEK. Export‑oriented SMEs can seek guarantees through the export‑credit arm of NSA Ventures or via European/EFTA programs. Clarifying this helps prevent confusion.
R&D Tax Credit and R&D Deduction
Reimbursement rate and caps – The R&D tax credit under Act 152/2009 reimburses 35% of eligible R&D costs for SMEs and 25% for larger companies. The annual cost cap is ISK 1.1 billion per company, with outsourced R&D capped at ISK 200 million. Companies apply through Rannís. This should replace any outdated ceiling figures or confusion about the reimbursement rate.

Eligibility conditions – To receive the credit, a project must spend at least ISK 1 million on R&D over 12 months, and employees working on the project must have relevant training. Applications for new projects must be submitted to Rannís by 1 October 2025. These conditions should be emphasised.
Angel Investment (Share‑Purchase)
Tax Deduction
Company eligibility – The scheme applies to investments in a company with fewer than 25 employees and annual turnover and/or balance sheet under ISK 650 million. The company must not have been on the market for more than seven years and may not be listed. At least 30 % of the capital raised must be used for R&D if the business has not yet started trading, and a single capital increase cannot exceed ISK 2 billion. These limits replace the incorrect figures (<50 employees, turnover <80 M ISK) in the original report.

Deduction amount and timeframe – Individuals may deduct 50 % of their investment in a qualifying share‑capital increase from taxable income, but this deduction rises to 75 % for investments made between 2020 and 2024. The minimum investment to qualify is ISK 300 000, while the maximum investment for deduction is ISK 10 million (deduction up to ISK 5 million). For investments in 2020–2024 (claims filed 2021–2025) the maximum eligible investment increases to ISK 15 million and the maximum deduction to ISK 11.25 million. These numbers should replace the earlier “1.3 M SEK limit” and “50 % deduction” statements. Note that the scheme currently applies up to the 2024 tax year; it may end or be extended in 2025, so the overview should be explicit about the timeframe.

Holding requirements – Investors must buy shares in a newly issued share‑capital increase (not secondary purchases), and they must be listed on the company’s capital‑increase register. There is no longer an explicit requirement to hold the shares for three years; such conditions were removed in 2019.
Employee Share‑Option Scheme
New ESA‑approved scheme – In February 2024 the EFTA Surveillance Authority approved a special tax scheme for employees (including board members and service providers) of R&D start‑up entities. Under this scheme, share‑option profits are taxed as capital gains (22 %) instead of salary (31–46 %), provided the option is held for at least 18 months, has a maximum duration of eight years, and is non‑transferable.

Eligibility criteria – The start‑up must have fewer than 25 employees, turnover and/or balance sheet < ISK 650 million, and must spend more than 10 % of turnover on R&D. The entity must obtain a confirmation from Rannís showing that at least ISK 1 million will be spent on R&D over 12 months and that key employees possess relevant expertise. These details correct the original description, which mentioned <10 years old, ≤50 employees and turnover ≤ ISK 80 million.

Duration – The scheme runs for tax years 2024–2033. The overview should be updated to include this timeframe and emphasise that it only applies to R&D start‑ups meeting the above criteria.
Other Tax Incentives
Foreign expert tax relief – The overview correctly notes that foreign specialists can have 25 % of their salary tax‑free (i.e., 75 % taxable) for the first three years of employment. It may be useful to restate that applicants must not have lived in Iceland for the preceding five years and must possess expertise considered scarce.

Green investment depreciation – The green investment incentive, introduced in 2021 and valid until 2025, gives businesses an additional 5 % depreciation base on environmentally friendly movable assets (e.g., eco‑friendly machinery and vehicles). Eligible assets must fall under categories such as eco‑transport, renewable energy, sewage treatment, waste recycling or sustainable land use, or meet criteria like A+ energy efficiency or ≥85 % renewable‑energy use. This should be explained more clearly and connected to the 2025 sunset date.
Regional and Municipal Programs
Uppbyggingarsjóður (Regional Growth Funds) – Official allocation rules for the Northeast fund (representative of other regions) state that grants are competitive, usually announced annually, and cover no more than 50 % of eligible project costs. Grants are offered for cultural/community projects, business development and innovation, and start‑up/operating costs in culture. These funds do not finance investments in companies or purchase of land/housing. The report should specify that regional grants typically cover up to 50 % rather than 10–35 %.