Being part of the Kingdom of Denmark, the foreign relations of Faroe Islands are handled in cooperation with the Danish government and Government of Faroe Islands.

Unlike Denmark, Faroe Islands is not a part of the European Union, and Danish citizens who are residents of the islands are not citizens of the EU.

The Constitution of Denmark states that the Danish government handles in principle all foreign and security relations for the Kingdom.^[1] However, the Foreign Policy Act of 2005 allows the Islands to make agreements when they relate solely to matters within the powers of the Islands' government.^[2] The High Commission of Denmark in the Faroe Islands represents the Danish government on the Islands. The current Foreign Minister of the Faroe Islands is Høgni Hoydal.

As explicitly asserted by both Rome treaties, the Faroe Islands are not part of the European Union. This means that the free movement of goods, people, capital and services and other directives by the EU do not apply between it and the Faroe Islands.

A protocol to the treaty of accession of Denmark to the European Communities stipulates that Danish nationals residing in the Faroe Islands are not to be considered as Danish nationals within the meaning of the treaties. Hence, Danish people living in the Faroes are not citizens of the European Union (other EU nationals living there remain EU citizens)^{[citation needed]}.

The Faroe Islands are not part of the Schengen Area. However, persons travelling between the Faroe Islands and the Schengen Area are not subject to border controls,^[5] although there may be identity checks when checking in for flights^{[citation needed]}.

Charges for international services such as phone roaming and bank transfers are much higher than inside the EU^{[citation needed]}.

The Islands reached a fisheries agreement with the Soviet Union in the 1970s (one of the first western countries to do so during the Cold War), and Russia has remained a major export market in the post-Soviet era.^[9] The tensions between the EU and Russia following the 2014 Russo-Ukrainian War did not affect this trade, and in 2015 the Islands opened a diplomatic mission in Moscow, and signed a memorandum of cooperation with the Eurasian Economic Union in 2018.^[9] In 2022, the Faroese PM Bárður á Steig Nielsen condemned the 2022 Russian invasion of Ukraine.^[10] In late 2023, the Islands and Russia renewed their fisheries agreement for one year.^[11]

From 1 January 1997 until 30 December 2020, trade between Faroe Islands and the UK was governed by the Faroe Islands–European Union Trade Agreement, while the United Kingdom was a member of the European Union.^[12] Following the withdrawal of the United Kingdom from the European Union, the UK and the Faroe Islands signed a continuity trade agreement on 31 January 2019, based on the EU free trade agreement; the agreement entered into force on 3 May 2021.^[13][14] Trade value between the Faroe Islands and the United Kingdom was worth £1,923 million in 2022.^[15]

The Foreign Minister Jenis av Rana met US Secretary of State Mike Pompeo in Copenhagen on 22 July 2020.^[9] On 28 November the Islands signed a partnership declaration with the United States.^[9] The US ambassador to Denmark Carla Sands had previously exerted pressure on the Islands not to let Huawei supply its 5G network infrastructure.^[9] In October, the Commander of United States Naval Forces Europe-Africa, Robert P. Burke, had also met with the Foreign Minister.^[9]

• Faroese independence movement
• Politics of the Faroe Islands