Icelandic authorities approved a new immigration reform measure drafted by the Minister of Justice, creating tighter standards for permanent residency, residence permits, and family reunification for foreign citizens. Officials called this the nation's biggest residence permit system overhaul in ten years.

Permanent residency applicants will now face a residency minimum of six years instead of four years, alongside requirements for clear identity proof and zero outstanding public debt.

Family reunification standards also become stricter under the bill, raising the minimum cohabitation requirement from one year to two years. Both partners must reach an age of at least 24 years before permit issuance, and applicants must secure appropriate housing for relatives.

The legislation includes safeguards for foreign employees who suspect they face labour exploitation or human trafficking. Qualified persons may obtain temporary residence documents lasting up to 12 months to seek new jobs and assert legal rights, though au pair permits for individuals from outside the European Economic Area will be eliminated.

These changes seek to match Iceland's immigration policies with neighboring Nordic nations and bring better consistency to the permit process.