Starting business in Norway

Norway has a strong and stable economy. Foreign capital, knowledge and technology have always played a significant part in Norway's trade and industries. International relationships have had an important impact upon Norway's growth and development in the context of an ever-increasing global economy. Norway is not a member of the EU but despite this, both Norwegian and foreign-owned companies have unrestricted access to the EU market, through the European Economic Area (EEA) agreement.Businesses are easy and fast to establish and costs are low. The public sector is organised as such that running a business in Norway is simple and straightforward. Norway is also a leading shipping nation, and it is one of the world's largest oil exporters. Today it has a competitive world economy, and is one of the global leaders in industries such as aquaculture, maritime industries, hydropower, the environment, energy, technology and telecommunications. According to the Global Enterprise Monitor (GEM), Norway is a global leader in business and the forecasts for the future are very impressive.

Before entering Norway you will have to decide on what company structure that is most suitable for your needs. In general, there are two formations we recommend. Either an AS (LLC) or a NUF (NRFC). Finding the right one is essencial.

• NUF: A NUF is a Norwegian Registered Foreign Company (NRFC) and is considered a branch of a foreign company. This means that it is a part of an already existing company. This is relevant if you want to extend the existing company to Norway
• AS:An AS is a Limited Liability Company (LLC) and is an independent company owned by its shareholders. The risk is limited to this company only., and is generally perceived as a more serious company thant that to a NUF. In terms of operating this is normally a better choice if you want a permanent establishment in Norway. This is the most popular and respected company type amongst financial institutions, suppliers and customers. The minimum share capital is NOK 30 000. You will need minimum of one director with an norwegian D-number or socialsecurity number. You will also need a fysical adress i Norway. The registration process can be done witin 1 week.

For more information please see this guide

VAT is calculated at all stages of the supply chain, import of goods and services from abroad. The final customer, who is not registered for VAT, is the acutal absorber of VAT as a part of the purchase price. This means that the VAT is not actually an expense in itself for a company. Output VAT is added to sales invoices, while as input tax is deducted from purchase invoices. The net amount of output VAT and input VAT is the payable/receivable VAT amount. This is normally calculated on a two-month basis in Norway. Every company that exceeds revenues liable to VAT of NOK 50 000 within a year, is obligated to register in the VAT register. This includes Norwegian as well as foreign companies. The company is then required to add, deduct, calculate and pay/receive VAT. VAT registration is done when already operating in Norway.In Norway, the VAT percentages are:

• 25 % – Standard rate on most products and services
• 15 % – Foodstuffs, nutrition, restaurants
• 8 % - Passenger transport, hotels

A company that operates in Norway without a permanent establishment (not taxable) also need a VAT representative to add, deduct and calculate the VAT. A company that incurs costs from Norway with VAT, without having a Norwegian entity, may apply for VAT refund.

In principle, we have full freedom of establishment in Norway. You can attempt to sell whatever goods or services you like; it is up to the market to decide whether anyone is interested in what you have to offer. However, many rules exist to uncover production and marketing of products/services that may be directly harmful, or that society wishes to regulate for other reasons. It is important to look into applicable rules and regulations in advance. Before start up, do you have to ask permission

NAV's AA Register (the employer/employee register) must be notified of all employment relationships with a duration of at least seven days and at least four hours of work per week. Once you have established contact with NAV's employer/employee register, you must send notification each time an employment relationship is established or terminated and when permanent changes are made to the registered information about working hours, job title (occupation code) and workplace (department). The deadline for submitting notification is Friday of the week following the week in which the employment relationship began/ended or the change was made.

Nearly all businesses have a bookkeeping obligation and a duty to register and document their income and expenses, including for tax purposes. They must also prepare annual accounts. You are not required to use external help to prepare the accounts, as long as the results are correct. It is your responsibility, regardless of who prepares the accounts. However, most people, will find that they save a lot of time by outsourcing this work to someone with the appropriate experience and technology. If the accounts are to be kept by a person who is not an employee of the enterprise, the person in question must be authorised and you must have a written contract with the accountant. The Financial Supervisory Authority of Norway supervises authorised accountants and sets out requirements for how such assignments are to be carried out. Remember to notify the Central Coordinating Register for Legal Entities about who your accountant is at all times. The accountant must confirm that he/she has accepted the assignment.

Some limited companies can choose not to audit their annual accounts provided that certain conditions are met:

• Operating revenues are less than NOK 5 million
• The balance sheet total is less than NOK 20 million
• The average number of employees does not exceed ten full-time equivalent years

For more information please see this guide

Limited companies and non-personal taxpayers are separate taxable persons and pay tax in the course of the year following the income year. The enterprise's profit is taxed as general income at a flat tax rate of 28%. General income is defined as total income minus all expenses arising from the business activities, including tax depreciation. Tax payment forms are sent to the enterprises twice during the first six months following the income year. As a rule, each tax instalment is equal to half the tax assessed in the previous tax assessment, increased or decreased as applicable by a percentage rate stipulated by the Ministry of Finance. When the tax is assessed, any underpaid tax is equal to the difference between the tax assessed and the advance tax levied. A new payment form will be issued for any underpaid tax.

Different rules apply to the deregistration and closures of different types of entities and enterprises, but all deregistrations and closures shall be notified using the Coordinated Register Notification form. A formal, orderly winding-up process provides security for owners, employees, customers and suppliers. Special rules apply to closure and deregistration as a consequence of bankruptcy. For more informations please see this guide