Now that you have decided to visit Iceland, you should learn what kind of documentation is required and whether you need to apply for a visa beforehand.
Iceland is not a member of the European Union (EU) but it is a Schengen Area Member State, which means it's a zone that allows unrestricted movement without passport checks and border controls for those living in any of the member states. If you are visiting from outside of the EU or the Schengen Area, you will only go through passport control at your first point of entry.
Do You Need a Passport?
You will only need a passport to enter Iceland if you are not a citizen of a country that is a party to the Schengen Agreement, which includes all EU countries, Norway, Iceland, and Switzerland. If you already passed Passport Control entering one of those countries, you won't need a second check in Iceland. Your passport should be valid for three months past your planned date of departure from the Schengen area. Because it's assumed that all visitors will stay for 90 days, it's best if your passport is valid for six months beyond your date of entry into the Schengen area.
Do You Need a Visa?
Citizens of many countries will not need a tourist or business visa for stays of less than 90 days in Iceland. There is a list of countries on their Directorate of Immigration site of those who do need a visa and those who don't.
Do You Need a Return Ticket?
It is unlikely you will be asked to show a return ticket, but it is possible.
The U.S. State Department website says that you need to have sufficient funds and a return airline ticket.
Where Do You Apply for a Visa?
If you are a citizen of a country that is not listed here or you are unsure about your visa situation, you may need to apply for a visa. Icelandic consulates do not issue visas except for those in Beijing or Moscow.
The visa applications are taken at different embassies depending on the nation. See the list provided by the Directorate of Immigration.
Applications cannot be made by post and appointments must be made in advance. You can contact them by phone or mail. The requirements include the application form, a passport-sized photo, travel document, proof of financial support, documentation showing your ties to your home country, medical insurance, and documentation confirming the purpose of the travel. Most decisions are made within two weeks of application.
If you're visiting just one Schengen country, you should apply to the designated consulate of that country. However, if you're visiting more than one Schengen country, you should apply to the consulate of the country chosen as the main destination or the country you will enter first (if you have no main destination).
The information shown here does not constitute legal advice in any way, and you are strongly advised to contact an immigration attorney for binding advice on visas.