The Directorate of Labor offers the project Initiative to unemployed entrepreneurs. Its main objective is to support jobseekers in creating their own employment opportunity. If you have a business idea, whether it is an innovation and /or development project, a production, or a service, the program allows you to receive guidance and assistance to develop your idea. Participants will assess the market’s demand for their product and/or service and create a business plan to determine the efficiency of their project and whether it can meet the requirements to create employment. 

Attention! Last application deadline of the year is on the 15th of December.

Requirements to participate in the Initiative program:

  • Participants must have an approved unemployment benefit entitlement and have at least six months remaining of their benefit entitlement period. 
  • The business idea is considered likely to create future employment for the jobseeker.
  • The jobseeker is prepared to familiarize themselves with the operation and establishment of companies.
  • The jobseeker cannot have an open registration on the Wage Payer’s Registry or have an ID number for calculated remuneration with tax office before applying for the program.
  • Participants commit themselves to work full time on their business idea.
  • Participants must participate in educational workshops during the contract period and be willing to receive guidance in the development of their idea.

Participants must submit a business plan or equivalent documents to The Directorate of Labor within six months of the commencement of the program. 

 All applications for this program are reviewed by a committee from The Directorate of Labor. 

Duration of the program

Initiative is a 6-month program.

If the business idea has an innovative aspect and a long development process, it is possible to apply for an extension (see application form) from 1-6 months. 

Temporary provision (until 2022)

  1. A company has been established but has not commenced operations:

 A 3-month agreement is made with a possibility of extending it for up to 3 further months.

  1. A company that has been operational but has closed, or a company that has just been purchased and has commenced operations:

A 3-month agreement is made without the possibility of an extension.


Training and mentoring

The duration of the training is 3 months, and participants will be provided with closed access to a web-based training program about business plans. Furthermore, they will receive mentoring and once a week from a mentor and counsellors from the Initiative program.   

The training on the internet is in Icelandic but has English subtitles.

Participants commit to attending mentoring sessions once a week, be active in their participation, work on their business plans and take part in introductions about their business ideas when required. 

Participants must turn in their business plans to The Directorate of Labour after 3 months. They will then be called into a meeting to review the plan, the status of the project and next steps. 

The end of the project

Participants who receive a 6-month contract are required to turn in a final report and attend a final meeting with their Initiative counsellors. 

Also, they will have to confirm the following options:

They deregister from the unemployment registry and work full time at their companies (ehf)

They work part time at their companies (ehf)

They will stop working on their idea and return to seeking employment full time. 

In the last scenario, participants must sign a confirmation that they will not start running their business without first notifying The Directorate of Labour.


Application procedure

Applications are accessible on The Directorate of Labour’s website.  They are received electronically from 1st of each month to the 30/31st. The applications are evaluated and processed before the 15th of next month. All applicants receive an e-mail regarding the evaluation and the results.

Usually, the training will start in the coming month. i.e., the applications that are submitted in September are processed in October and the training starts in November.

Important: Participants are required to confirm their job search as usual but are exempt from actively seeking employment while they are working on their business idea.

Application form

For further inquiries please contact the Initiative program’s counsellors  at


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