Hoppa yfir valmynd
Ministry of Industries and Innovation

Industry - The Industrial Act No 42/1978

[Translation from Icelandic]
(Text as of 1 January 2007)
The Industrial Act
No. 42/1978 with Subsequent Amendments

Article 1

The present Act applies to the operation of any kind of industry for professional purposes. Industry includes both manual trades and manufacturing industry whichever materials or energy, machinery or other equipment are used and whichever goods or materials are produced. Domestic crafts shall be exempted from the provisions of the Act.

Article 2

            Nobody may operate industry for professional purposes in Iceland or within Icelandic territorial waters without having obtained permission to do so in accordance with the present Act.

            [The provisions of the present Act notwithstanding, citizens or legal parties of Member States of the Agreement on the European Economic Area are entitled to work in industry on the basis of Iceland's undertakings concerning recognition of work and vocational training in industry in another EEA State [and also citizens or legal parties of Member States of the Convention of the European Free Trade Association or Faroese or legal parties in the Faroe Islands.] 1) 2) The Minister can stipulate this right further in Regulations.] 3)

            [Chiefs of Police shall confirm the adequacy of documentation concerning work and vocational training after the Trade Union concerned, i.a. national federations of Masters and Journeymen, have been afforded an opportunity of expressing their opinion.  Chiefs of Police supervise the implementation of the present provisions.  A dispute concerning rights may be referred to the Minister and a decision by Courts of Law may furthermore be sought.] 4)

            1) Act No. 76/2002, Article 30.  2) Act No. 108/2006, Article 28.   3)  Reg. No. 495/2001.   4)  Act. No. 40/1997, Article 1. 

Article 3

Anyone can obtain a licence to operate an industry, manual trade and manufacturing industry if he meets the following conditions:

1.         [Is an Icelandic citizen.  A foreign citizen having legal domicile in this Country and having had this uninterrupted for at least a year shall, however, be exempted from the condition respecting Icelandic citizenship. As of the entry into force of the Act respecting the European Economic Area citizens of other Member States of the European Economic Area shall be exempted from the conditions respecting Icelandic citizenship and residence in this Country according to further provisions to be laid down by the Minister by means of Regulations.] 1)  [Citizens of Member States of the Convention of the European Free Trade Association and Faroese enjoy the same kind of right as specified in the third sentence. ]2)  3)   4)

2.         Is of legal age.

3.         Has control over his estate.

4.         Has not been convicted of  a punishable act as defined in Article 68 of the Penal Code No. 19/1940.

5.         Has business knowledge, such as knowledge of book-keeping, which is required upon leaving examination from a Technical School.

6.         Meets in other respects the conditions laid down in the present Act.

            [The Minister of Industry can grant exemptions from the condition of citizenship in sub-paragraph 1 and the provisions of sub-paragraphs 4 and 5.] 5)

1) Reg. 620/1995.  2) Act No. 108/2006, Article 29.   3) Act No. 76/2002, Article 31  4) Act No. 70/1993, Article 2.  5) Act No. 23/1991, Article 15.

Article 4

            [When a Company or other legal persons wish to operate an industry, such a legal person may obtain permission to do so, provided the Managers and Directors of the legal person and, in the case of a Company where all or some members are fully responsible for the Company's liabilities, those who do so, meet the conditions of sub-paragraphs 2 - 6 of Article 3.  In the case of a foreign party or an Icelandic legal person in whom a foreign party holds a share the conditions of the Act respecting Foreign Parties' Investment in Business Operations shall furthermore be met.] 1)

1)  Act No. 23/1991, Article 15.

Article 5

            A licence is forfeited if the licensee no longer meets some of the conditions stated in Articles 3 and 4 or the conditions which are alternatively laid down or may be laid down in order to maintain the right.  In case a Director or Manager of a Company forfeit such conditions, or if a Company or establishment loses Icelandic domicile, the party concerned shall have brought the matter into lawful order within 3 months as of the time the change occurred or else he has forfeited his licence.  The Minister can, however, extend the respite by 3 months in case of special circumstances.

Article 6

A licence is restricted to a name.  A spouse is entitled to continue the industry of his/her deceased spouse without a new licence, provided that the spouse meet statutory conditions.

            The estate of a licensed party may operate the industry to the extent to which those operations form part of its probate proceedings.  An heir who is 16 years of age or thereover may operate the industry of the bequeather without a new licence until he is competent to manage his finances if he does in other respects meet the conditions of Article 3.

Article 7

            An industrial licence shall specify which kind of manufacturing industry may be operated in accordance therewith and where this may be operated.  A licence does not grant authority to operate manufacturing industry of another kind than that stated in the licence.

            The selfsame party may be granted a licence to operate manufacturing industry in more than one branch as well as a licence to operate manufacturing industry in more than one place.


Article 8

            [Branches of industry which are operated as manual trades and which have been authorized in Regulations1) by the Minister of Industry shall at all times be operated under the management of a Master.  As it pertains to authorization the Minister of Culture and Education and the National Federations of Masters and Journeymen shall be consulted] 2).

            A Master shall be responsible for all work being properly and well discharged.

            The right to engage in industrial work in such branches of industry belongs to Masters, Journeymen and apprentices in the trade. Specialized associations, Journeymen's and Masters' guilds in the selfsame trade are authorized to conclude a mutual agreement permitting the engagement of unskilled labourers for industrial work under the management of a qualified tradesman for a specific brief period at a time when special circumstances apply and there is an urgent need for added manpower in the trade.  Anyone can also discharge industrial work for himself and his home and furthermore for an official establishment or concern with which he works in case of minor maintenance of the property of these parties.

            In the country, small market towns and villages having less than 100 inhabitants unskilled people may engage in industrial work.

            1) Reg. No. 940/1999.    2)Act. No. 133/1999, Art. 1.

Article 9

The right to connect one's title to an authorized branch of industry belongs exclusively to those holding Journeymen's or Masters' certificates in the trade.


Article 10

            [Anyone can obtain a Master's Certificate if he meets the conditions stated in Article 3, has completed a Journeyman's examination, has since been working  under the management of a Master in his trade for no less than a year and has also completed Master's examination in the trade from a Masters' School. In case a Journeyman does not have the choice of work under the management of a Master in his new trade during the first five years following upon the authorization thereof his two years' work in the trade is considered to be the equivalent of work with a Master, but a Chief of Police shall afford the association of tradesmen concerned, i.a. the  National Federations of Masters and Journeymen, an opportunity of expressing their opinion as to whether there be a choice of such work.  The same applies in trades in which no Master is working or where a Journeyman does for other reasons verifiably have no choice of working under a Master] 1).

            A Master's Certificate grants a Master permission to operate the branch of industry to which his Master's Certificate applies.

            1) Act No. 133/1999, Art. 2.

Article 11

            A person who no longer meets some of the conditions which must be met to obtain a Master's Certificate has forfeited his Master's Certificate.

Article 12

A Chief of Police where a party has legal domicile delivers Master Certificates and Industrial Licences 1).

            In case a Chief of Police refuses to issue a Master's Certificate or an Industrial Licence, or if a dispute arises as to whether a party has forfeited its right, the party is entitled to refer the matter to the Minister of Industry.  He may furthermore seek a decision from Courts of Law.

            [The Minister of Industry issues Journeymen's Certificates.  He can charge others with issuing the Licences after meeting the conditions of Laws 1).

            A charge in accordance with the Act respecting the Treasury's Supplementary Revenue shall be paid for Industrial Licences, Masters´ Certificates and Journeymen's Certificates] 2).

            1) Act. No. 7/2002, Article 1.  2)Act. No. 133/1999, Art. 3.

Article 13

            A register shall be kept of industrial licences and Masters' Certificates granted under the present Act.

            Licensees shall at all times notify the Chief of Police of the address of their business station and branches and of all changes occurring thereto.  The Chief of Police will thereafter forward these notifications to the register which is being kept.

            The Minister lays down further instructions regarding these matters.

Article 14


            1)  Act No. 7/2002, Article 2..

Article 15

            The following is subject to fines:

1.         If a person operates an industry without having obtained a licence or permits others to operate an industry under his licence.

2.         If a person undertakes the work of a Master without having obtained a Master's Certificate.

3.         If a person operates an authorized branch of industry without having a Master as Manager.

4.         If a person uses the name of an authorized branch of industry without being entitled to do so according to Article 9.

5.         If a person or a firm takes apprentices for practical training although he be not entitled to do so or takes apprentices for studying another trade than the one in which he is Master or keeps apprentices without a lawful contract.

6.         [If a citizen or a legal party of a Member State of the Agreement on the European Economic Area or the Convention of the European Free Trade Association or a Faroese or a legal party in the Faroe Islands operates here without confirmation under paragraph 3 of Article 2 being at hand.] 1)  2)  3)

Fines accrue to the State Treasury.


1) Act No. 108/2006, Article 30.   2) Act No. 76/2002, Article 32.  3) Act. No. 40/1997, Article 2.  4) Act No. 19/1991, Article 194.

Article 16

A person who repeatedly violates the present Act may be ordered to forfeit an Industrial Licence, a Master's Certificate and a Journeyman's Certificate1)  temporarily or even for life in case of a very serious violation.

            1) Act. No. 133/1999, Article 4.

Article 17

            The professional rights of persons who have obtained these in accordance with the provisions of previous Acts shall remain unabridged.


Disclaimer: This section of the site details available translations on legislation relating to the Government Offices in Iceland. In case of any discrepancies between the translations and the original text in Icelandic, the original text as published in the Icelandic Legal Gazette prevails.

Contact us

Tip / Query
Please answer in numerics

This website uses cookies to ensure you get the best experience on our website. Read more