That curfew goes all the way up to midnight in the island's long summer days.
While those rules may appear to be just the recipe for rebellion among the nation's young, those restrictive laws, together with the country's youth-targeted anti-drug abuse programme, have helped make Iceland a success story.
In the past two decades, Iceland has seen a dramatic decline in the abuse of drugs, alcohol and tobacco among teens, according to a January report by digital magazine Mosaic Science.
Since 1998, the percentage of 15- and 16-year-olds in Iceland who said they had ever used cannabis has fallen from 17 per cent to just 7 per cent last year, figures from the report showed.
Within the same age group, the percentage for those who had been drunk in the previous month has slipped from 42 per cent to 5 per cent, while those smoking cigarettes every day has dropped to just 3 per cent from 23 per cent.
In turn, its success has inspired countries such as Singapore to learn how it is keeping its young people away from drugs.
In a recent interview, Singapore's Home Affairs and Law Minister K. Shanmugam said Singapore is looking into the best practices of countries such as Iceland - as well as the efforts of others such as Finland - to curb the use of narcotics among young Singaporeans.
Iceland owes its success to a government-launched initiative called Youth in Iceland that aims to get teens off substances and instead, seek out natural highs, particularly through promoting sporting activities.
Launched in 1997, it includes state-sponsored sports and recreational programmes to help combat youth drug abuse.
According to a report by the Canadian broadcaster CBC, the government also gives parents vouchers to help them enrol their children in sports activities.
The government also promotes after-school programmes that are meant to enhance family ties and community bonds.
Following the launch of the programme, the country also changed its laws to support the programme's objectives.
The changes included imposing the curfews on young teens, making it illegal for those under the age of 18 to buy tobacco and prohibiting the sale of alcohol to anyone below 20.
Over in Finland, an anti-drug policy prioritising early intervention among young people has been a key part of its drug prevention efforts.
Under the policy, schools in Finland work with student welfare teams, parents, substance abuse services, social workers, youth services and the police to prevent drug use.
All schools also have a substance-abuse prevention strategy as part of their student welfare plan, according to the European Monitoring Centre for Drugs and Drug Addiction's country report for Finland.
In addition, substance education is also taught in schools as part of compulsory health education.
Thanks to those efforts, a report by Finland's National Institute for Health and Welfare last September found that the use of cannabis, as well as other drugs, was less common in Finland and the Nordic countries than other European countries.
The same report also found that, on average, younger Finns aged between 15 and 16 years old were drinking less than their European counterparts.