On 8 July, amendments to the Icelandic Act on Foreign Nationals and the Foreign Nationals' Right to Work Act entered into force. The amendments, which were passed by Parliament on 18 June, transfer responsibility for processing work permit applications and issuing work permits from the Directorate of Labour to the Directorate of Immigration.

In recent weeks, additional amendments to the Regulation on Foreign Nationals have also taken effect. These concern short-term residence permits, as well as the prioritisation of applications and the use of risk assessments in the processing of residence permit applications.

The main changes are outlined below.

Transfer of work permit processing to the Directorate of Immigration

From now on, applications for work permits will be processed by the Directorate of Immigration.

For the time being, guidance and information for applicants and employers will continue to be available on the information pages Residence permits based on work and Apply for a work permit. These pages will be consolidated and updated over the coming weeks.

Satisfactory academic progress required for every permit renewal

Holders of student residence permits must now demonstrate satisfactory academic progress each time they renew their permit, rather than only at the first renewal. Satisfactory academic progress means completing at least 75% of a full-time course load during the academic year.

Employment without a work permit

Student residence permit holders may work in Iceland without a work permit for up to 60% of full-time employment while studying. The 60% limit applies to the student's total employment. If a student works for more than one employer, the combined workload may not exceed 60%.

When can students work more than 60%?

Students may work more than 60% if one of the following applies:

• The work takes place during scheduled breaks between academic terms in accordance with the institution's academic calendar.

• The individual has completed a university degree in Iceland and is residing in the country while seeking employment based on their specialist qualifications.

• The work forms part of a formal workplace training or internship programme.

Obligation to provide information on employment

When renewing a student residence permit, applicants must provide information about their employment to confirm that they have not exceeded the permitted working hours.

The Directorate of Immigration may also request employment information during the validity period of the residence permit and may obtain relevant information from other public authorities and employers. If the employment does not comply with the legal requirements, the Directorate may review or revoke the individual's right to work.

Extended stay after graduation

Foreign nationals who have completed a university degree in Iceland may now renew their student residence permit for up to 18 months after graduation to seek employment based on their qualifications. Previously, this was possible for up to three years.

To qualify, applicants must have completed a Bachelor's, Master's or Doctoral degree at an Icelandic university.

In addition, foreign nationals who have completed a doctoral degree in Iceland may renew a specialist residence permit for up to 12 months to seek employment based on their specialist expertise. A work permit is not required in order to obtain this residence permit.

Changes to family reunification rights for students

The right of student residence permit holders to family reunification with spouses and children is now limited to those undertaking full-time university studies leading to a Bachelor's, Master's or Doctoral degree.

Students enrolled in diploma programmes are no longer eligible for family reunification. The right to family reunification with parents has also been removed.

Prioritisation of applications and risk assessment

New provisions in the Regulation on Foreign Nationals provide the Directorate of Immigration with clearer authority to prioritise residence permit applications.

Complete applications based on employment may now be processed ahead of other applications. The Directorate may also temporarily prioritise complete applications where specific deadlines apply, such as:

• new student residence permit applications before the start of the academic year; and

• residence permit applications for athletes during official transfer windows.

The regulation also introduces provisions on document reliability and risk assessment. It explicitly states that the Directorate may not base a decision to grant a residence permit on documentation where there are reasonable grounds to doubt its authenticity or the credibility of its origin or content.

Short-term residence permits

A new chapter in the Regulation on Foreign Nationals sets out the legal basis and conditions for short-term residence permits.

These permits are intended for foreign nationals who wish to stay in Iceland for more than 90 days but no longer than 180 days, either to visit a close family member or to visit Iceland as an artist, scientist or athlete.