Relocation intelligence
🇫🇴 Moving to Faroe Islands: tax, residency and cost of living
The Faroe Islands levy a progressive income tax (national plus municipal) rising to about 42%. The effective burden on an income worth roughly EUR 54,000 is around 39%. VAT is 25% and corporate tax 18%. As an autonomous part of the Danish realm, the Faroes sit outside the EU. The North Atlantic islands are prosperous and safe from fishing and aquaculture, with strong services, but a harsh climate and high costs.
Thinking of moving to Faroe Islands? Here is the tax, residency, property and quality-of-life picture in plain numbers, with sources.
Key facts
- Top income tax
- 42%
- Corporate tax
- 18%
- Capital gains
- 0%
- Wealth tax
- No
- Inheritance tax
- No
- Cost of living index
- 52
- Safety
- 9/10
- Internet quality
- 8/10
- Visa-free destinations
- 189
- Foreigners can own property
- Yes
- Residency in
- 6 months
- Citizenship in
- 5 years
Taxes
Progressive income tax (national plus municipal) up to about 42%, effectively around 39% at EUR 54,000. VAT 25%, corporate tax 18%.
Residency and visas
Residence and work run via Danish and Faroese frameworks, with a strong labor market in fishing, aquaculture and public service.
Property ownership
Foreigners can acquire property under conditions, though the market is small and prices in Torshavn are high.
Cost of living and quality of life
The Faroes are safe and prosperous with strong services, but have a harsh, windy climate, isolation and high costs.
Passport and mobility
Residents are Danish citizens and travel on a Danish passport, with visa-free access to about 189 destinations, though the Faroes are outside the EU.
Why people move to Faroe Islands
Prosperous and safe
Thanks to fishing and aquaculture the Faroes are prosperous and very safe, with strong public services.
Danish-supported institutions
As part of the Danish realm the Faroes benefit from strong Danish institutions and healthcare.
Honest trade-offs
- De Faröer kennen een streng, winderig klimaat, isolement en hoge kosten van levensonderhoud.
- De inkomstenbelasting loopt op tot circa 42% en de effectieve druk ligt rond de 39% bij een westers inkomen; de btw is 25%.
- De vastgoedmarkt is klein en de prijzen in de hoofdstad Torshavn zijn hoog.
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