Moving to the Faroes for work

Rules regarding work permits in the Faroe Islands vary according to the applicant’s country of origin. The Danish Agency for International Recruitment and Integration reviews and administers work permit applications in cooperation with the Faroese Immigration Office. More information about the rules and regulations concerning Faroese residence and work permits are available at the New to Denmark website, or at the Faroese Immigration Office. 

Nordic citizens
If you are a citizen of Finland, Sweden, Norway, Denmark, Iceland or Greenland, you are free to work in the Faroe Islands. You do not need to apply for a work permit.

EU-citizens
If you are an non-Nordic EU citizen, you must apply for a work permit in order to work in the Faroe Islands. Application forms can be found on the website newtodenmark.dk. Find relevant application forms by searching for “Faroe Islands”. 

Citizens from other countries 
If you are a citizen of a country outside the European Union, you must also apply for a work permit in order to work in the Faroe Islands. Application forms can be found on the website newtodenmark.dk. Find relevant application forms by searching for “Faroe Islands”. 

If you only work in the Faroe Islands for a period of 180 days or less in a 12 month period and you do not move your permanent address to the Faroes, you are subject to limited tax liability in the Faroes. This means that you must pay a standard tax rate of 42% on all income earned in Faroes, but you remain tax liable in your country of residence. If you work onboard a FAS ship or a bareboat ship, the tax rate is 35%. When you have limited tax liability, you are not entitled to child tax credits or interest subsidy in the Faroe Islands.

If you are subject to limited tax liability in the Faroe Islands, you must apply for a temporary p-tal (Faroese civil registration number) in order to receive wages. Find the application form for temporary p-tal under Files.

If you either move your permanent residence to the Faroe Islands or work there for more than 180 days in a 12 month period, you are fully tax liable in the Faroes. Full tax liability means that all income, whether earned in the Faroes or abroad, is subject to taxation in the Faroes, effective from the first day there.

All individuals, aged 18 or over, and fully tax liable in the Faroe Islands, are required by law to contribute a certain percentage of their taxable income into a pension scheme. This also applies if you come to the Faroe Islands for fixed-term employment. 

Your employer pays the contribution into your pension account when your salary is paid. The contribution must be at least 12% of your salary.

How to join a pension scheme

You can start saving for a pension by joining a pension scheme with a pension provider in the Faroe Islands. The pension provider will give you an account number, which you should give to your employer. Your employer will then pay the pension contribution into your pension account.

You can find pension providers under Relevant links.

Pension schemes are often included in employment contracts 

As mentioned, you are welcome to join a pension scheme of your choice. However, pensions are often a built-in feature of employment contracts today.

Pension refund after fixed-term employment

If you come to the Faroe Islands for fixed-term employment, you can claim a refund of your pension contributions when you leave the Faroe Islands, as long as your stay has not lasted more than 60 months.

If you have already received a refund under this rule and return to the Faroe Islands for fixed-term employment, any new pension contributions cannot be refunded until 10 years after you leave the Faroe Islands again.

You can find the form “Request for a refund of pension contributions” under Files.

In the Faroe Islands, if you are a wage earner (i.e. paid by the hour), you have the right to a paid holiday. The system of holiday allowance, in Faroese Frítíðarløn, is set up for this purpose.

Every time you are paid wages, your employer is responsible for making a holiday allowance contribution to TAKS' holiday fund. The contribution corresponds to 12% of your wages. The holiday allowance then accumulates throughout the year until 2 May, every year, when the allowance is paid out to your account.

If you are leaving the Faroes, you should not cancel your Faroese bank account until after the holiday allowance has been credited.

More information about holiday allowance can be found under Relevant links. 

Below is a list of mandatory contributions that are usually withheld from your pay if you are fully tax liable in the Faroes. These include:

Kringvarpsgjald
Kringvarpsgjald is a broadcast receiver license that all individuals aged 24 or over and fully tax liable in the Faroes, pay to the public broadcasting network, Kringvarp Føroya. People aged 24-66, pay DKK 173 per month, and people aged 67 or over, pay DKK 71 per month.

Heilsutrygd
Heilsutrygd is the name of the national health insurance. Everyone with a registered residence in the Faroes is covered. Individuals aged 18 or over and covered by the insurance, are required to pay the insurance premium, which is DKK 175 per month + 0.7% of their income.

Barsilsgjald
Barsilsgjald is the contribution to the Parental Benefit Fund, Barsilsskipanin. All individuals, aged between 16 and 66 and fully tax liable in the Faroes, are required to pay 0.86% of their income to the fund. 

ALS-gjald
ALS-gjald is the unemployment insurance contribution. All individuals, aged between 16 and 66 and fully tax liable in the Faroes, are required to pay the insurance premium, which is 0.8% of their income.

AM-gjald
AM-gjald is the labour market supplemental pension contribution. All individuals under the age of 67, regardless of whether they are subject to full or limited tax liability in the Faroe Islands, are required to contribute 3% of their income to the AM-fund. Once reaching retirement age, individuals may receive pension from the AM-fund if they have lived in the Faroe Islands for a minimum of three years while between the ages of 15 and 67.

Eftirløn
Eftirløn is Faroese for pension. All individuals up to the Faroese state pension age, 67, and fully tax liable in the Faroes are required to save up for a pension. The minimum pension contribution for 2025 is 11%.

If you come to the Faroe Islands for reasons of fixed-term employment, and you are fully tax liable here, you may apply for becoming exempt from contributing to the unemployment insurance.

Conditions and application

To become exempt from paying the unemployment insurance premium, send an application to ALS, short for Arbeiðsloysisskipanin (the unemployment fund), and enclose a copy of your limited residence and work permit. The exemption may be granted for up to a year at a time. It is most convenient for everyone, if the exemption is granted before the first payment of wages is made.

For more information on how to apply and the conditions, contact ALS. Find the link to ALS under Relevant links.

Útlendingastovan, the Faroese Immigration Office, will be able to assist you. Visit their website for relevant information on the subject, available in both Faroese and English. See the link under Relevant links.

You will also find information about the rules and regulations concerning Faroese residence and work permits on the New to Denmark website.