Foreign investment in air transport companies is limited to 49% of capital stock. Persons and legal entities resident in other EEA states or in the Faroe Islands are exempted.
"Article 4:
Investment by non-residents in business operations in Iceland is subject to the following restrictions: [...]
3.The combined holdings of non-residents in an Icelandic commercial company engaged in aviation operations in this country may not at any time exceed 49%. [Persons residing in another Member State of the Agreement on the European Economic Area or the Faroe Islands and legal entities resident in another Member State of the Agreement on the European Economic Area or the Faroe Islands shall, however, be exempt from the provisions of this paragraph. [...]
For the purposes of this Article, an Icelandic person refers to the state treasury and municipalities, as well as institutions, companies and funds in this country wholly owned by them, Icelandic citizens who are domiciled in this country and legal entities that are domiciled in this country and are wholly owned by owned by public entities in this country, Icelandic citizens who are domiciled in this country or other legal entities that are domiciled in this country and are wholly owned by Icelandic citizens who are domiciled in this country. For the purposes of this Article, an Icelandic legal entity refers to a legal entity domiciled in this country, regardless of the form of operation or ownership. A legal entity is considered to have a domicile in this country if it is registered in this country, if it considers its domicile in this country according to its articles of association or if its actual executive board is in this country.[...]" (Act on Investment by Non-residents in Business Enterprises (34/1991), last amended 24 December 2019, Article 4 [google translation])
Act on Investment by Non-residents in Business Enterprises (34/1991), last amended 24 December 2019, Article 4
[<a href="https://www.althingi.is/lagas/nuna/1991034.html">Act</a>]