As a member of the European Economic Area through the EEA agreement, the Icelandic government is under obligation to give workers from EU member states priority on the domestic job market and they do not need any work permit in Iceland
The following are member states of the European Economic Area:
Austria, Belgium, Bulgaria, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Great Britain, Holland, Hungary, Ireland, Iceland, Italy, Cyprus, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Norway, Portugal, Poland, Romania, Spain, Slovakia, Slovenia and Sweden.
Swiss citizens have the same rights in Iceland as citizens of EEA states.
Citizens of countries outside the European Economic Area
Citizens of countries outside the EEA must obtain a limited work permit before arriving to work in Iceland. If an individual is already in Iceland when applying for the first time for a limited work permit, s/he is normally required to leave the country. The Directorate of Labour is able to provide further information.
Applications for Limited Work Permits
The employer applies for a limited work permit, not the employee. The employer submits to the Directorate of Immigration her/his application for a limited work permit, along with the prospective employee's application for a residence permit. The Directorate of Immigration then sends the work permit application to the Directorate of Labour, which assesses whether every condition is fulfilled for issuing a limited work permit.