Working in the Faroe Islands: Permit, Salaries, Tax and Contributions for a French National

Citizens of Denmark, Finland, Iceland, Norway and Sweden can settle and work freely in the Faroe Islands. All others, including EU citizens, need a residence and work permit before settling or taking a job, as EU free movement rules do not apply to the archipelago (Faroese government). For a stay of less than three months, a French national enters without a visa with a valid passport or national ID card; the application for a permit for a stay of more than three months goes through the Faroese immigration office (Útlendingastovan).

The scheme reserved for EU citizens (Swiss and EEA nationals are excluded) applies when Faroese unemployment is below 3.5% (6% for certain skilled building trades); it is suspended if the threshold is exceeded for three consecutive months, and the office indicates that the rate is currently below 3.5%. Conditions: an average working week of at least 30 hours and at least one of the following three situations: a Faroese collective agreement applies, the person is a researcher, teacher, specialist or senior executive, or the salary and conditions match Faroese standards. Healthcare professions require a Danish or Faroese authorisation.

• Pre-approved employer: employment can start as soon as the hiring is notified to the office; normal processing is one month (form AR8, part 2 completed by the employer).
• Non-pre-approved employer: the permit must be obtained before working, with normal processing of three months (form AR9); the employer generally provides anonymised contracts and two months of payslips for comparable positions, except for a collective agreement or a profile of researcher, teacher, specialist or senior executive.
• Duration: one year at most, or the length of the contract if shorter, to be renewed before expiry; work can continue while an application filed on time is examined.
• Restrictions: the permit is valid only for the employer and position named; a new job requires a new permit, except when moving from one pre-approved employer to another; ancillary activity requires a separate permit; a Faroese address must be maintained and prolonged absences avoided (time spent in Denmark or Greenland counts as time abroad).

The spouse or partner and children under 18 living in the household may be authorised to accompany the holder; the spouse or partner may work full-time (EURAXESS). After seven consecutive years on a work permit, a permanent residence permit can be applied for.

Pay is set by agreements negotiated between the employer and the union concerned, according to seniority and skills (EURAXESS). Most employees are union members and central wage agreements bind the unions and employers’ organisations. The statistical institute moreover measures the employment threshold from the minimum hourly wage under the collective agreement concluded between the Faroese Workers’ Union and the Employers’ Association: the minimum is therefore negotiated, and its amount can be obtained from the unions or the institute. No median salary scale could be read from an official source for this page, and it is therefore not given.

For the economy as a whole, Hagstova Føroya tracks the wage bill paid, which is rising steadily year on year. The normal working week is 39 hours, overtime being paid with a premium (EURAXESS).

The employment contract or job offer accompanies the permit application and must contain the information required by Faroese law. Notice periods and probationary period lengths do not appear in the official pages consulted: they should be checked in the applicable collective agreement and with the union.

• Public holidays: the official EURAXESS portal counts twelve, including Easter, Ascension, Whitsun and Christmas, with three half-days (5 June, the eve of St Olaf’s Day on 28 July, Christmas Eve).
• Paid leave: six weeks for university staff on contract; for all employees, the TAKS tax administration pays in May the holiday allowance (Frítíðarløn), equal to 12% of wages.
• Sickness: employees on a fixed monthly salary are paid during their absence; the employer may ask for a medical certificate, generally after the first week.
• Parental leave: 52 weeks of paid leave in total, including four weeks before and fourteen after the birth for the mother, four weeks for the father, the remaining 34 weeks being shareable between the parents (EURAXESS).
• Work accident: the employer must insure its employees against work-related accidents and illnesses.

The Faroese tax administration TAKS distinguishes two situations. A person who lives in the Faroe Islands for more than 180 days in twelve months is fully taxable on all their income, wherever it is received. A person who stays 180 days or less and registers no permanent address is under limited taxation: flat rate of 42% for an ordinary employee (35% on board certain ships), plus 3% contribution to the labour market pension fund, with no credit for dependent children; they remain taxable in their country of residence.

For full taxation (TAKS scale, revised every year), tax starts beyond an annual income threshold, progressive national tax beyond a higher threshold, and municipal tax is a single rate set by each municipality, from 16% to 23%; a church tax of 0.6% to 0.9% is added for members of the Lutheran Church. Income of an employee of a Faroese employer (A income) is withheld at source by TAKS; income of a self-employed person or of a foreign employer (B income) gives rise to a preliminary estimate at the start of the year and monthly notices. Everyone receives an annual tax assessment.

On the French side: France has no tax treaty with the Faroe Islands. The France-Denmark treaty of 4 February 2022 excludes the Faroe Islands from its scope (article 3), and the list of treaties in force published in BOFiP mentions none for the archipelago. The tie-breaker rules of a treaty are therefore not available. A non-resident remains taxable in France on income of French source, with a minimum rate of 20% up to a net taxable income threshold revised every year, and 30% beyond (impots.gouv.fr). Before leaving France, the tax residence situation should be clarified with the tax office.

For a fully taxable employee, TAKS publishes the following contributions on type A income: Heilsutrygd health insurance (fixed monthly part plus a low percentage of income), the parental benefits fund (0.86%), the labour market pension fund (3%) and unemployment insurance (ALS), whose rate should be checked with TAKS, the pages consulted not giving the same value. A broadcasting licence fee is added from age 24. A compulsory supplementary pension (“kravd eftirløn”) is provided for, the rate of which, raised gradually, should be checked with TAKS.

A temporarily settled worker can ask to be exempted from the pension contribution, or have it refunded on departure if their stay did not exceed 60 months (TAKS, EURAXESS). TAKS devotes a dedicated page to the taxation of pensions. For all these contributions, the amounts change every year and should be confirmed on the TAKS website.

The self-employed person falls under type B income: provisional payment, annual accounts and return. The permit categories published by the immigration office (work, family reunification, study, internship, au pair, permanent residence) describe no permit dedicated to self-employed activity, and the EU scheme targets an employment contract with a Faroese employer: a self-employed project should therefore be confirmed in writing with the office before any departure.

Remote work for a foreign employer has no specific permit among the categories published; TAKS classes income paid by a non-Faroese employer as B income. Here again, the immigration office and TAKS should be asked before settling. See also digital nomad insurance.

The seconded employee sent by a French employer to the Faroe Islands falls under secondment outside an agreement: continuation of the French scheme for three years, renewable once, contributions paid in France as if the employee were working there, and possible additional local contributions (CLEISS, the French centre for European and international social security liaison). Beyond that, the employee becomes an expatriate and falls only under the local scheme. See seconded or expatriate and the page healthcare reimbursement in the Faroe Islands.

The Faroese government describes a strongly industrial economy, based mainly on fishing and aquaculture, whose seafood products are exported to all six continents, and a standard of living it ranks among the highest in the world. Hagstova Føroya publishes series on foreign trade, fish catches, tourist accommodation and construction; it also indicates that the archipelago has one of the highest activity rates in Europe and tracks its research and development spending.

The currency is the Faroese krona, exchanged at par with the Danish krone; the coins are those of Denmark. As the European Union does not apply, the archipelago’s trade depends on agreements that the Faroese government negotiates itself. No official growth forecast by sector was read for this page: updated indicators appear in the “Economic benchmarks” block displayed on this page, and sector detail can be found on the statistical institute’s website.