All Icelandic nationals have automatic and permanent permission to live and work in any EEA (including EU) or EFTA country.
Individuals born to an unmarried Icelandic father are eligible to acquire citizenship by registration before age 18.
Foreign nationals may naturalise after meeting a minimum residence requirement (seven years), proving financial self-sufficiency, demonstrating proficiency in the Icelandic language, and passing a good character requirement with supporting testimonials from two Icelandic citizens.
The distinction between the meaning of the terms citizenship and nationality is not always clear in the English language and differs by country.
The Icelandic clans swore fealty to the Norwegian king in 1262–1264, and the island later fell under Danish rule when the entire Kingdom of Norway became part of the Kalmar Union in 1397.
The Danish–Icelandic Act of Union did not establish separate nationalities at the time of independence and lacked any specific provisions for determining which citizens would belong to which kingdom.
Liechtenstein later acceded to the EEA in 1995, while Switzerland concluded a separate free movement agreement with the EU that came into force in 2002.
[14] Foreign children with a long period of residence in the country may be eligible for a facilitated process of naturalisation.
Additionally, they may not have any outstanding tax obligations, have declared bankruptcy, or received state assistance during the preceding three years.
[17] Individuals wishing to become citizens but do not meet all of the naturalisation criteria may nevertheless petition the Althing for a direct grant of citizenship through statutory law.
This method of awarding citizenship is not bound by any specific criteria and is routinely considered by the legislature twice per year.
[19] Icelandic citizens may apply to be released from their citizenship by the Minister of Justice, provided that the applicant ordinarily resides overseas and already possesses or is in the process of obtaining another nationality.