Guide to Starting a Company in Norway

If you are planning on setting up a company in Norway, there are a few things you need to arrange. Especially since the requirements for foreigners who want to start up in Norway are somewhat different than those for residents or citizens of Norway.

Read more about the process below or request a free quote for company formation in Norway.

Process - Norwegian company formation

Starting up a new business sounds easy. In fact, Norway is one of the countries where it is easiest in the world to start a business. Making sure you have thought about absolutely everything when setting up something new can be a real challenge.

There are plenty of excellent public sources of information, but certain issues still require some personal advice. Find the most frequently asked questions about Norwegian company formation below:

5 Steps to Starting a Company in Norway

Basically anyone in the world can set up a Norwegian limited company (AS). However, establishing a company in Norway as a foreigner takes more administrative work than it does for a Norwegian resident or citizen. Check out the steps if you are interested to read what exactly the Norwegian company formation process entails.

Pricing of starting a business in Norway

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Requirements to starting a company in Norway

Legal entity and structure

Choose a structure: single AS or holding structure

The private limited AS can be set up as a single entity with you as shareholder (or one of the multiple shareholders). Alternatively you could set up a holding structure. In practice, this means setting up two AS companies, one "holding AS" that owns the shares in a "operating AS". Setting up a holding structure instead of a single AS company has two main advantages:

  • The risk is spread
  • Dividend payments (and gains from a share sale) from the operating AS to the holding AS are virtually tax-free

AS Holding structure

A common structure is to set up two AS companies: one operational AS company owned by a holding AS.

Why would you set up a holding AS and an operating AS?

  • Accumulated gains/profits in the holding are separated from the operating company in case of a bankrupcy of the operating company.
  • When you sell your operating company, the profit of the sale will flow virtually tax-free to the holding company. Without a holding AS, the entire profit of the sale will be taxed at once.
  • A holding provides an extra layer of security between you personally and the company's activity.
  • Dividends received by a Norwegian resident limited company from another Norwegian limited company or a limited company resident in the European Economic Area (EEA) are basically tax-free. This kind of dividend is 97% exempt from tax, with the remaining 3% taxed at the standard normal corporate tax rate of 22%.
  • Accumulated gains in the holding can be reinvested tax-free into another private limited.

In practice the main difference between owning the shares directly as a individual shareholder or through a private limited company (personal holding), is the timing when dividends and gains are taxed. By owning the shares through a holding company you may decide when you want to pay taxes and over which amount. Another large advantage is that a holding structure allows you to reinvest the untaxed funds back from the holding into any other company. This could give you a larger return in the long run.

In many cases it is advisable to own the shares in your operating company through a holding company. This gives you more flexibility, the opportunity to reinvest your profits and the freedom to decide when and how much you want to pay yourself.

Norwegian Branch of a Foreign Company (NUF)

In some cases it makes sense to set up a foreign branche (NUF) rather than a private limited company (AS) in Norway. A NUF can only be used if there is a controlling company abroad.

Registering a NUF

You do not need registered address in Norway. This will save you the cost for an office address in Norway. The fee for registration in the business registrar is lower than the registration fee for the AS. An additional advantage is that there is no share capital requirement.

Accounting and a NUF

The accounts of the Norwegian company needs to be integrated into the accounts of the main entity abroad. The setup work for the accounting will be somewhat higher but that is a one-off job.

The NUF and VAT

If you are planning on doing business in Norway with the NUF the company will be subject to taxes in Norway. Once your entity surpasses 50 000 NOK (about 5000 EUR) in revenue it has to be registered in the VAT registrar. However, it is possible to pre-register before the turnover of 50 000 NOK is reached. The requisite is that the company is expected to reach the turnover of 50 000 NOK in less than a month. The rule is that the turnover of 50 000 NOK has to be reached but in practice it has to be reached within 2 months. This is a policy of the VAT-register and not a legal requirement.

The NUF in short:

  • For companies with a foreign main entity abroad, without the need of incorporating a private limited company
  • A NUF will have its own company registration number
  • A NUF does not need a bank account in Norway
  • A NUF does not need an office address in Norway, but will use the address of the main entity as its address. The billing address will therefore be the main entity's address.

Opening a business bank account in Norway

The bank has a crucial task in the company formation process in Norway. You need to pass the bank's KYC (know-your-customer) and AML (anti-money laundering) checks before your company can be registered. This means that you will need to have a Norwegian bank account in order to open a company.

Office in Norway

In order to successfully set up a company in Norway, you will need at least a Norwegian business address. Like most other countries, Norway's office landscape has changed a lot over the last few years. This has resulted in many new work concepts, such as co-working spaces, incubators and virtual office solutions.

Checklist: Required and Recommended Services for your Norwegian AS

Let's start with a general overview of services that you should and could take out. This is by no means an exhaustive one, but simply a general overview for a simple private limited company in Norway. In case your business has a different or more complicated structure or if you are active in certain industries, other services and documents may be required.

Below you will find a checklist with the most important tasks you should complete in order to successfully set up your company in Norway.

 Private Limited Company (AS)Partner
Founding
Company Incorporation✔ RequiredAdvisor
Share capital deposit✔ RequiredBank
Registration
Company registration✔ Required
VAT/MVA registration✔ Required (if revenue NOK50.000 > )Tax advisor
Apply for D-number✔ RequiredRelocation specialist
Contracts & Compliance
Shareholders' agreement★ Recommended (if more than 1 shareholder)Lawyer
Current account agreementOptionalLawyer
Management agreementOptionalLawyer
Employment contractOptionalLawyer
GDPR agreements★ RecommendedLawyer
Tax & Accounting
VAT return filing✔ Required (if subject to VAT/MVA)Accountant
Corporate income tax filing✔ RequiredAccountant
Annual financial report✔ RequiredAccountant
Bookkeeping✔ RequiredAccountant
Personal income tax returnOptionalAccountant
Address & office
Business address✔ RequiredOffice provider
Physical office spaceOptionalOffice provider
Mail forwarding serviceOptionalOffice provider
Norwegian phone numberOptionalPhone/VoIP provider
Bank & Insurance
Bank account✔ RequiredBank
Business Insurance★ RecommendedInsurance company
Bank loanOptionalBank
InvestmentOptionalInvestor

Get your business in Norway started?

Get in touch with us to learn more about our company services. We want to help you move your business in Norway forward.

 

 

Taxes in Norway

Find out the amount of taxes you have to pay and which structure/entity works best for you.

How much tax does my company need to pay?

This depends in large part on the amount of profit you will make and which legal structure you choose.

How much tax do I pay in a sole proprietorship?

Income from a sole proprietorship (Enkeltpersonforetak / ENK) is taxed under the personal income tax regime. This income is calculated from your business' revenue minus your business' expenses.  This income will generally be taxed somewhere between 33,4-49,6%.

To get an estimate on the amount of tax you will pay over your income in your ENK, use the Tax Calculator.:

  1. Change the website's language to English
  2. Choose the correct tax year, marital status and date of birth
  3. Select "Business" > "Positive personal income from farming, reindeer husbandry, slate quarrying and other business"
  4. Fill out the amount of income you expect to receive from the business (revenue minus expenses).
  5. Calculate your tax

How much tax do I pay in a Private Limited Company AS company?

Both the AS company itself and shareholder/employee will pay taxes. A private limited "AS" company is generally subject to VAT (in Norwegian: MVA or "Moms"), employer's social security contribution (if you have employees, including yourself) and corporate income tax. You will have to pay VAT over sold goods or services. VAT you have paid over purchases for the company can usually be deducted from the VAT you have to pay.

Taxes the company has to pay

Profits generated by a private limited company are taxed at the rate of 22% in the 2020 income year. This tax is paid in two instalment in the year after the income year. Private limited companies can decide to pay dividends. Dividends to personal shareholders are taxed at the rate of 31.68% in the 2020 income year, while dividends to companies owning shares in another company are virtually tax-free.

Taxes the shareholder has to pay

Secondly, a shareholder can be taxed in one of two ways as regards income from a private limited company:

  • Tax on share dividends
  • Tax on salary from the company

Note: As a shareholder you do NOT have to be also an employee in your company.

You, personally, are the shareholder

If you decide to pay out a dividend to yourself from your AS company, this dividend will be taxed at 31,68%.

Another company is the shareholder (AS holding structure)

This is often the case if you have a personal holding AS that holds the shares in your operating AS. Let's say you have made a profit in the operating AS and you would like to pay out some of the profit to the holding as dividend. This inter-company dividend is for 97 percent exempt from tax. The remaining 3% will be taxed at 22%. This makes this kind of dividend virtually tax-free. This works for both Norwegian and other private limited companies in the EEA.

Dividends received by a Norwegian resident limited company from another Norwegian limited company or a limited company resident in the European Economic Area (EEA) are 97% exempt from tax, with the remaining 3% taxed at the standard normal corporate tax rate of 22%.

You are employed by your AS

When you as a shareholder work for the company and receive a salary, the company must pay employer's National Insurance contributions and make tax deductions for you in the same way as for any other employee. The amount that must be deducted in tax will be stated on your tax deduction card which your company retrieves in Altinn.

You must pay tax on any dividends you receive from the company. The tax must be calculated for the year in which the distribution of the dividend is approved by the general meeting. The tax basis is taxed at the rate of 22% for the 2019 income year.

Refunds of withholding tax on share dividends

As a foreign shareholder, you have limited tax liability to Norway for share dividends you've received from Norwegian companies. As a rule, the Norwegian company must deduct 25 percent withholding tax on share dividends. The tax rate may be lower due to tax treaties or Norwegian tax regulations.

If you're entitled to a lower tax rate than the rate deducted on your dividend payment, you can apply for a refund of too much paid withholding tax. Only shareholders who are final dividend recipients can claim a refund of withholding tax.

Tax calculator

Use the tax calculator of the Norwegian Tax Authorities (Skatteetaten) to find out how much you will have to pay.

Administration & Tax filing in Norway

Get your administration and tax returns in order to run your Norwegian business as smooth as possible.

Below you will find the most common post-incorporation services that you have to consider.

Administration

In Norway, keeping a proper administration in order is not only advisable, but also mandatory. Find the process and required documents and data below.

Tax filings and returns in Norway

Your Norwegian company will most likely need to pay taxes in Norway. From VAT to corporate tax and income tax for employees. Find out more how to arrange this in Norway.

(Audited) Annual Accounts

Many companies must publish an annual financial report. If your company is obliged to submit audited annual accounts, you also need a public auditor. Whether or not you are subject to the audit obligation will partly depend on your organisational form and the size of the enterprise.

  • Sole proprietorships (ENK) have an audit obligation when the turnover is over NOK 5 million and the balance sheet contains assets worth over NOK 20 million, or the average number of employees is less than 20 full-time equivalents.
  • Private limited companies (AS) do not usually have a duty to perform an audit. AS companies can 'opt out' of auditing if the operating revenues are smaller than NOK 6 million, and balance sheets assets amount to less than NOK 23 million, and average number of employees is less than 10 full-time equivalents.

Employment

Permits and licenses

In certain industries, you must have a permit to run your own business. Examples of this are the catering/restaurant and cleaning services sectors.

Compliance and legal contracts

Make sure your company is legally watertight with our contracts and compliancy services.

GDPR Compliance

Norway is a part of the European Economic Area and therefore bound by the GDPR, the General Data Protection Regulation, which resulted in the adoption of a new Privacy Act and other legislative changes to comply with the new data protection rules. Most companies deal with personal data. Therefore you should make sure that you are 100% GDPR compliant. This new privacy law contains rules in the field of privacy protection. Customers and consumers get more rights; companies more obligations. If you do not comply with this, you risk hefty fines. These can amount to 4% of your annual turnover. Make your company GDPR-proof with our GDPR documents. Get in touch to find out more.

Legal contracts

Depending on your type of business, different types of legal documents are recommended. Some legal documents are recommended for almost every business. Examples are General Terms and Conditions and a Privacy Policy.

Shareholders' agreement

This agreement outlines the relationship between the shareholders. This agreement arranges among other things what happens when a shareholder wants to leave the company, non-competition issues etc.

Management agreement

This agreement is usually used between a holding and an operating AS company. As soon as a person or company is engaged to perform management tasks for a company, without the person joining as an employee, you need a management agreement. You use this agreement to make agreements between you and the contractor or client. An advantage of this agreement is that a number of statutory regulations do not apply, such as protection against dismissal, continued payment of sick pay and the right to vacation days. Another advantage is that no payroll taxes and social contributions have to be paid.

General Terms & Conditions

Other words for terms and conditions are terms and conditions, delivery conditions, service conditions, promotional conditions etc. So it makes little difference to the law how you call your conditions. The general terms and conditions for services are suitable for multiple use, which is useful, because you do not have to draw up new conditions for every agreement. To use the general terms and conditions, you only have to declare them applicable and hand them over (this can also be done by e-mail) to the person with whom you are entering into the agreement.

Employment contract

If you will be employing staff, you are obliged to have a written employment contract. This should state the rights and obligations of the employee and cannot be conflicting with Norwegian labour laws.

 

 

Where to start a business in Norway?

Norway has a rather clear distinction between city and countryside. The majority of Norwegians lives in the city and naturally this is where most business activity takes place. Oslo is considered the business capital of Norway. With over one million inhabitants in the greater Oslo region, this is the main city. Bergen is the second city and is big in shipping and tourism. Stavanger is considered the oil capital of Norway with many business in the petroleum business located there. Trondheim is home to Norway's largest tech university (NTNU), research institute (SINTEF) and a rapidly developing tech scene.

Extra services to consider

All other services that can help you and your business.

Financing and funding in Norway

Traditionally there are two main types of financing in Norway: investments or bank loans. Both come in many shapes and forms. Find out more about Norwegian funding, from a crowdfunded investment to a traditional bank loan. Read our guide about funding in Norway

Phone number / landline

A local phone number makes your company look much more trustworthy. People like to do business with local businesses, so make sure that you have a Norwegian phone number. Luckily this can be done all online these days. We can help you finding the right provider.

Website and marketing

A website is the business card of your company. Without traffic and attention means nothing. We can help you to set up a website, webshop or online platform. Additionally we have the expertise to set up marketing channels specifically for the Nordic market.

EORI

If you are a Norwegian company and you are dealing (import/export) with custom authorities in any EU country, you will most likely need an EORI number. You will receive such a number by applying to the customs authorities in the relevant EU country. Check the validity of an EORI number here.

Company insurance

The private limited company limits your personal liability. Additionally, you might want to consider taking out company insurance.

Most insurances are voluntarily and a few are obligatory. An employer is required to take out insurance for occupational injuries of its employees.

The AS private limited already limits your personal liability to a large extent. In certain situation it can be useful to insure yourself anyway.

We can put you in touch with insurance professionals to give you an personalized offer.

8 Steps to get your Norwegian startup ready

Preparation: build solid business case/model.

Perhaps the most important task you should perform is to make a solid business case. Importantly, a business idea is something else than a business model. You should make a proper business plan, not just for others, but mostly for yourself. This does not have to be a formal and static document, but rather a few key statements that can be easily adjusted and fit on one A4 paper. A really great concept to get started with is the so-called Business Model Canvas. This is an extremely easy to use and dynamic document where you can create and test your business plan in no-time.

More than anything else, this type of 'business plan' cuts out all the nonsense, and confronts you with what really matters and what you have not really thought through sufficiently.

Create your business case: Who will be your customer? Can this realistically become successful in Norway? What do you need to make this happen? This business plan is just as important for yourself as it will be to potential investors or lenders.

Test your business case

Conduct a short market research and / or make a very simple prototype of your product or service. Most importantly: do not focus on the details in this stage. You should usually only use a few weeks to get through this stage. The only thing you want it to find out whether there is a market for your product or service in Norway! Get a quick idea of whether your product or service can generate traction.

Choose the right company type

Determine how to structure your company, which legal entity you should use. Make the company future-proof but make it flexible so it can adapt to change (for example, if you expect to bring investors on board in the near future, you should probably set up a AS private limited company and not a sole proprietorship).

Usually this choice will be between a sole proprietorship (ENK) or a private limited company (AS). Other types of legal entities are also available but less frequently used. If you choose the AS, it is important whether you hold the shares directly or using a holding company. We can give you advice on what will be best for you.

Put it on paper

Arrange all of your paperwork well, once and for all. Set up a shareholders' agreement to avoid conflict with partners. Make sure your are compliant with all privacy regulations with GDPR documents. Create terms & conditions that will protect you and your customers properly.

Make sure you arrange legal paperwork and administration correctly from day 1. If financially possible, we recommend you to outsource your legal paperwork and administration. Put all your collaborations with partners on paper (for example a shareholders' agreement).

Arrange your administration

You will need to file vat tax returns, corporate income tax,  submit annual accounts and arrange paperwork for employees.
 
If you want to spend your time on other things than your administration, we recommend you to outsource it.

Cover your risks

Take out the right insurance and do not wait for it until problems occur. Certain insurances are mandatory, others are voluntarily. Be aware if any mandatory insurance applies to your business and insure additional risks where suited.

Make the company ready for scale

Ask yourself this question: What would happen if my company grew by 1000% overnight? Make sure your systems and processes (accounting, sales, customer service etc.) can handle growth.

Funding

Think well whether you need funding or whether you should build your business gradually with your own savings. Most business will need funding at one point. Think well about the consequences, advantages and disadvantages of a loan, investment or other type of funding.

Useful Resources & Tools

The Norwegian government institutes have plenty of useful information on their websites about starting up in Norway. Below are some of the most useful websites and tools when you are starting up in Norway.

  • A good start is to look at the total overview of all the tax rates in Norway. This page is in Norwegian, but can easily be translated into English.
  • Further, the Norwegian Tax Authorities (Skatteetaten) have made a very extensive online tax calculator. It is standard in Norwegian, but you can change the language to English.
  • On the Altinn website there are several handy calculators and formulas you can use. For example, calculate how much an employee will cost you in Norway.
  • To find out all about other companies, it can be useful to use the Proff business registry. On this website you can lookup a lot of public data on other AS companies in Norway.
  • The best website to compare all sorts of financial products is the website of Finansportalen. This website is made for individuals/consumers but has useful information for business owners as well.
  • If you are looking into becoming a resident or citizen in Norway, use the online portal of the Immigration services (UDI) to find out what documents and process is required in your situation.

Downloads & Reports on Doing Business in Norway

World Bank 2020 Report - Doing Business in Norway

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