Using density functional theory and semi-classical Boltzmann transport theory, we have studied structural, electronic and transport properties of a van der Waals vertical heterostructure of $$\hbox {BiI}_3$$ and $$\hbox {ZrS}_2$$ . The elastic constant of the heterostructure is larger than the individual monolayers. Further it has a direct band gap that is smaller than the monolayers. The interaction between the layers results in subtle changes in the electronic properties of the heterostructure such that its transport properties are also affected. In particular, we find that the relaxation time of electrons is significantly increased in the heterostructure such that its power factor is about ten and one hundred times larger than that of a monolayer of $$\hbox {ZrS}_2$$ and $$\hbox {BiI}_3$$ , respectively, indicating that the maximum power output from a thermoelectric device made of an n-doped heterostructure is larger than that obtained from the individual components. Our results suggest that this novel heterostructure is a possible candidate for n-type thermoelectrics.