Faroe Islands

Employer of Record in Faroe Islands

Only 499 EUR per employee per month

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Rivermate's Employer of Record (EOR) solution helps companies hire remote employees in Faroe Islands . We take care of global payroll, taxes, benefits, compliance and HR activities. So you can focus on growing your business. Our Employer of Record (EOR) solution is beneficial to companies that want to hire remote employees in a breeze. On this page you will find employment information for Faroe Islands.

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1. Grow your team in Faroe Islands with Rivermate as your Employer of Record (EOR) / PEO

Payroll, benefits, taxes, and compliance can be difficult to manage in Faroe Islands , particularly if you don't have established local relationships. You can hire employees in Faroe Islands effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global Employer of Record (EOR) solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

2. Summary

The Faroe Islands, often known as the Faroes or Faeroes, are a North Atlantic archipelago and island nation situated 320 kilometers (200 miles) north-northwest of Scotland, almost midway between Norway (580 kilometers (360 miles) and Iceland (430 kilometers (270 miles). It is a component nation of the Kingdom of Denmark, like Greenland. The islands cover around 1,400 square kilometers (540 square miles) and have a population of 53,882 as of April 2022.

The topography is rough, and the climate (Cfc) is windy, damp, overcast, and chilly. Temperatures for such a northerly environment are softened by the gulf stream, which keeps temperatures above freezing all year, averaging 12 °C (54 °F) in summer and 5 °C (41 °F) in winter. Because of the northern location, there is permanent civil darkness during summer evenings and relatively short winter days.

The Faroe Islands were part of the Kingdom of Norway between 1035 and 1814 and were in a personal union with Denmark since 1380. The Treaty of Kiel, signed in 1814, handed Norway to Sweden, while Denmark retained its Atlantic holdings, which comprised the Faroe Islands, Greenland, and Iceland.

The Faroe Islands, although part of the Kingdom of Denmark, have been self-governing since 1948, managing most sectors except military defense, police, justice, currency, and foreign affairs. Because the Faroe Islands are not part of the same customs zone as Denmark, they have their own trade policy and may enter into trade agreements with other countries. The Hoyvk Agreement is a comprehensive bilateral free trade agreement between the Faroe Islands and Iceland. They are represented in the Nordic Council as part of the Danish delegation. The Faroe Islands have their own national teams in certain sports. They did not join the European Economic Community in 1973, preferring to retain control over their own fishing waters.

Hiring talented employees in a short span is not an easy task. Partnering with an Employer of Record (EOR) like Rivermate in Faroe Islands is your best option, giving your organization enough time to focus on other aspects of international expansions like project management and inventory management. The EOR takes care of all the compliance and legal issues while helping you speed up hiring using their knowledge of domestic employment practices and virtual onboarding tools. Top EORs also have provisions for the e-signing of documents to enable faster onboarding.

3. Public holidays

4. Types of leave

There is no information about the types of leave for this country.

Paid time off

Public holidays

Sick days

Maternity leave

Paternity leave

Parental leave

Other leave

5. Employment termination

There is no information about employment information for this country.

Termination process

At any workplace, circumstances that result in dismissal can arise. A situation involving the employee could include a major breach of the employment contract. Employer/enterprise-specific conditions could include a necessary personnel reduction or reorganization. An employee cannot be terminated due to her pregnancy. If the employer cannot demonstrate that the termination was unconnected to the pregnancy, the termination is illegal. This is a requirement of the pregnancy law.

Notice period

The length of notice is proportional to the employee's seniority. The notice period for an hourly employee who has been employed for six months is at least seven working days. The notice period for a worker receiving regular monthly salaries who has worked for more than 6 months but less than 2 years is 2 months. The notice period for salaried employees who have worked for 6 months to 3 years (excluding temporary or probationary employment) is 3 months. All personal income earned by residents of the Faroe Islands is subject to taxation.

Probation period

There is no general legislation regarding probationary periods. However, a probationary period of up to three months may be agreed.

Severance pay

The Faroese labor rules make no provision for severance pay.

6. Working hours

There is no information about the working hours for this country.

General working schedule

In both the private and public sectors, normal working hours are around 40 hours per week.


Overtime compensation is paid for work performed outside of normal working hours.

7. Minimum wage

There is no information about the minimum wage for this country.

The minimum wage in the Faroe Islands is DKK83.72 per hour.

8. Employee benefits

There is no information about the employee benefits for this country.

Mandatory benefits postulated by law include a probationary period, pay on annual leaves, public holidays, sick leaves, maternity leave, paternity leave, and overtime pay. Statutory benefits also include social security benefits.

9. Taxes

There is no information about the taxes for this country.

Corporate tax

A Faroese company that distributes dividends is required to withhold 18% tax on dividends, regardless of whether the receiver is a resident or a non-resident. The requirement to withhold tax, however, does not apply to any portion of the total dividend paid to a parent company based in the Faroe Islands.

Royalties received from the Faroe Islands to a receiver outside the country are subject to a 25% withholding tax. However, the Faroe Islands has renounced the authority to tax royalties from sources inside the Faroe Islands under double taxation treaties.

Commercial royalties and licenses are subject to the royalty tax, while artistic royalties and leasing payments are exempt. Interest is not subject to withholding tax.

Individual income tax

Individuals residing in the Faroe Islands are required to pay tax on their personal income. Wages, interest, donations, and inheritance are all sources of personal income. Personal income tax is paid to the government, the municipality, and, in the majority of instances, the church.

The entire amount of government and local taxes paid on normal taxable income cannot exceed 50%. Individuals with full tax responsibility in the Faroe Islands begin paying income taxes when they earn more than DKK 30,000 per year. The national tax system is progressive, which means that the tax rate increases as the amount subject to taxes rises.

The first DKK 65,000 of taxable income is tax-free. On the remaining revenue, a set sum and a tax rate ranging from 15% to 30% are levied. A person earning between DKK 330,000 and DKK 800,000 pays DKK 44,500 of the first DKK 330,000 and 25% of the remainder of the income.

The municipality receives local tax. The rate of municipal taxation is not progressive. Each municipality determines its own tax rate, which ranges from 16 to 22%.

VAT, GST and sales tax

Value added tax (VAT) is a sales tax that is imposed anytime goods and services are sold along the distribution chain. VAT is also imposed on products imported into the country. Most products and services are taxed at a flat rate of 25%. VAT is not levied on some products and services. Certain cultural and sporting activities, personal transportation, financial and insurance transactions, and literary, composing, and other creative pursuits are among them.

10. VISA and work permits

There is no information about VISA and work permits for this country.

The Faroe Islands are part of Denmark's Kingdom, however Denmark does not have jurisdiction over their internal affairs, therefore you may need to apply for a visa. While Denmark is a member of the Schengen Area, the Faroe Islands are not, hence a Schengen visa will not be valid for admission into the Faroe Islands.

Fortunately, the Faroe Islands government maintains open borders for Schengen Area passengers, so if you are from the EU or an Annex II country, you just need a passport or an ID card. If you are not from the Schengen Area, you must apply for a visa. You may do so at the closest Danish embassy.

Aside from Christmas, the best season to visit the Faroe Islands is from May through August. It's worth noting that this is also peak tourist season, and unlike many other sites, there isn't much of a shoulder season. When the cafés shut, the boat stops operating, and all the pubs go into hibernation, you'll know the season is gone.

11. Employer Of Record service terms

There is no information about the Employer of Record (EoR) service terms for this country.

Employment contracts

If it is a temporary contract, the employment contract must include both parties' addresses, pay, workplace location, employee benefits, work hours, start date, notice period, and termination date.

Employees must be at least 18 years old to sign an employment contract, and students who work have the same rights as full-time employees.

Employers must get the employee's agreement before requesting a criminal history background check. They may also get a health certificate if they operate in a dangerous setting. Any background investigation must adhere to data privacy rules.

With Rivermate being your Employer of Record (EoR) in Faroe Islands, you do not have to worry about the employment contracts, as we take care of that.

Minimum assignment length

A full-time employment contract must provide a start date as well as a work week of 37 hours, while a part-time contract must include less hours. A temporary employment contract must be for a particular purpose, and it expires after the task is completed. Both of these contracts must be written, and they must be at least a month in length.

Payment currency

Danish Krone (DKK)

Faroese króna (FOK)

13.Opening a subsidiary in Faroe Islands

There is no information about the working hours for this country.

How to set up a subsidiary

Subsidiary laws

13. Why choose Rivermate as your Employer of Record / PEO in Faroe Islands

Establishing an entity in Faroe Islands to hire a team takes time, money, and effort. The labor law in Faroe Islands has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into Faroe Islands simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record (EOR) solutions in Faroe Islands give you peace of mind so you can focus on running your business. Please contact us if you'd like to learn more about how Rivermate can help you hire employees in Faroe Islands via our Employer of Record (EOR) / PEO solution.

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