Guide to Starting a Company in Norway
4 Steps to Starting a Company in Norway
Follow the steps below to open a company that is ready to trade in Norway.
Step 1: Determine structure and apply at bank
The business structure will depend, among other factors, on:
- where your main company is located,
- what the nature of your business in Norway is,
- if your business is temporary or permanent,
- if you are going to have a main office in Norway,
- whether your main activities will be in Norway or abroad,
- whether you will have a board of representatives,
- if you are going to have employees in Norway
Choosing the right legal entity and structure
The most common legal entities for entrepreneurs are a private limited company (AS), a sole proprietorship or a general partnership. A Norwegian branche of a foreign company (NUF) also exists, but is less common these days. For foreign entrepreneurs, the AS is the most common legal entity. Besides the type of legal entity, you should also consider which structure is most suited for your company.
Choose the right legal entity
In a sole proprietorship you are personally liable for the company's actions and liable for its losses. In many cases you will pay more taxes in a sole proprietorship than in a private limited company. A private limited pays the lower corporate income tax. On the other hand, the private limited AS company needs to meet more administrative requirements and is more costly to set up.
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
Once we have a clear picture of your needs in Norway we will produce the relevant legal documents prepare the forms for the financial institutions and the AML and KYC requirements that the banks will require in order to see that you are compliant to Norwegian regulations. The financial institutions bear the responsibility of checking that their clients are compliant to anti-money laundry regulations (AML). If the financial institution can not do satisfactory due diligence on the company they can not open a bank account. This is usually the main hurdle for clients who want to start up a company in Norway. Documentation has to be provided to complete the due diligence process. We have in-house experience establishing new companies from DNB, Norway's largest bank. We therefore know what the financial institution will require in each case so we can ease the process of bank account opening.
Select a trade name
At navnesøk.no, you can find out whether the name you want to use is available as a domain name, enterprise name and trademark in a single search. When you are about to register, we suggest you follow this sequence:
- Register the domain name
- Register the enterprise name
- Register any trademark
Registering an office address
The company must have a Norwegian business address (i.e. a Norwegian physical address which is stated in the format: street/road, house number, postcode and postal town. Postbox addresses will not be accepted). This address can be a private residential address, but also a real office space or a shared office space. The address should obviously somewhat match the purpose of the business. A large industrial company will most likely not be registered at a private residence, but a small consultancy firm can be.
Step 2: Bank account opening and share capital deposit
When the bank account is opened the share capital has to be transferred to the account. The required share capital in Norway is 30 000 NOK. When the capital is in the bank account the bank will issue a document to confirm that. This is the last document needed to apply for a an organization number at the company registry (Foretaksregisteret). We will provide, and fill out the necessary forms and fill them out before sending them for you by regular mail to the Business Registrar.
Step 3: Business registry application & D-number application
All of the individuals that are going to have any official roles in the company (director, board member, powers of procurement etc.), need to be registered in the citizen registry with an identification number. The identification number for foreign citizens is called a D-number. The D-number applications are sent together with the application for the organization number, to the Business Registry. The Business Registry first handles the application for the organization number, put the application on hold, then the case handler at the Business Registrar send the D-number applications to the Citizen Registry. Once the D-numbers applications are finalized, the Citizen Registry notify the business registry to finalize the registration of the company. The organization number will be available at www.brreg.no once the registration is finalized. The D-numbers are sent by mail to the registered address in the country in which the relevant individual resides.
Step 4: Access to bank account and online government portal Altinn, setting up administration
The last part is to inform the financial institution that the company is registered to get access to the bank account and online banking. The banks will need the D-number and the organization number to finalize their registration. Note that the organization number is not the same as the VAT number (in Norwegian: MVA). The MVA registration can not be started until the company has reached an annual turnover of 50 000 NOK (about 5000 EUR), unless your company can fulfill certain requirements beforehand. We will help you to get access to the online government portal Altinn, where you can communicate and send online applications to the different registrars, deliver your income statement, communicate with the tax authorities and so on.
After this is all set up your company is now operational. Next up is setting up your administration so you will comply with the regulations from the Norwegian tax authorities. We can help you set this up.
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.
Requirements to starting a company in Norway
Every legal entity in Norway has its own specific requirements. Below you will find the requirements for the most common entities.
Requirements to starting a private limited (AS) company:
- At least one shareholder
- Any role in the AS should be fulfilled by someone age 18 or over
- The company should have a Norwegian physicial address
- At least 50 % of the board members must reside in Norway or another EEA country. The founders / shareholders do not have to be Norwegian citizens/residents!
- If you are not a citizen of an EU/EEA country, and are planning to run a business in Norway, you need to have a residence permit that will allow you to work here. You can find information about the terms and requirements for resident permit on the Norwegian Directorate of Immigration's (UDI) website.
Requirements to starting a sole proprietorship
- You will need to be a resident in Norway. If you are not a citizen of an EU-/EEA country, and are planning to run a business in Norway, you need to have a residence permit that will allow you to work here. You can find information about the terms and requirements for resident permit on the Norwegian Directorate of Immigration's (UDI) website.
- You plan on conducting commercial activity, not a hobby. If the scope of your activity is limited and your expenses are about the same as your income, it may count in favour of you pursuing a hobby. Profits from hobbies are not taxable income.
- The sole proprietorship has to be registered at a physicial Norwegian address, not a postbox.
Checklist: Required and Recommended Services for your Norwegian AS
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|
|Company Incorporation||✔ Required||Advisor|
|Share capital deposit||✔ Required||Bank|
|Company registration||✔ Required|
|VAT/MVA registration||✔ Required (if revenue NOK50.000 > )||Tax advisor|
|Apply for D-number||✔ Required||Relocation specialist|
|Contracts & Compliance|
|Shareholders' agreement||★ Recommended (if more than 1 shareholder)||Lawyer|
|Current account agreement||Optional||Lawyer|
|GDPR agreements||★ Recommended||Lawyer|
|Tax & Accounting|
|VAT return filing||✔ Required (if subject to VAT/MVA)||Accountant|
|Corporate income tax filing||✔ Required||Accountant|
|Annual financial report||✔ Required||Accountant|
|Personal income tax return||Optional||Accountant|
|Address & office|
|Business address||✔ Required||Office provider|
|Physical office space||Optional||Office provider|
|Mail forwarding service||Optional||Office provider|
|Norwegian phone number||Optional||Phone/VoIP provider|
|Bank & Insurance|
|Bank account||✔ Required||Bank|
|Business Insurance||★ Recommended||Insurance company|
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.
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.
- 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.
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.:
- Change the website's language to English
- Choose the correct tax year, marital status and date of birth
- Select "Business" > "Positive personal income from farming, reindeer husbandry, slate quarrying and other business"
- Fill out the amount of income you expect to receive from the business (revenue minus expenses).
- 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.
Use the tax calculator of the Norwegian Tax Authorities (Skatteetaten) to find out how much you will have to pay.
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.
Administration & Tax filing
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.
1. Administration and tax
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.
2. 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.
The private limited company limits your personal liability. Additionally, you might want to consider business insurance. Contact us for more information and/or a quote.
Find an insurance agent
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.
Compliance & Legal Contracts
Make sure your company is legally watertight with our contracts and compliancy services.
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.
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.
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.
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.
Becoming a resident in Norway
You do not need to be a resident in Norway to own a company there. However, If you want to actually run your business from Norway, you should apply for a residence permit. A so-called D-number gives you temporary residence status. A national identity number (previously: P-number) is for those who plan to stay in Norway long-term.
Use the web tool on the website of the Norwegian directorate of Immigration to figure out what you need to do and what documentation is required in your situation. If you want help you can contact one of our advisors.
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.
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.
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 tech scene.
Useful Resources & Tools
The most useful websites and tools when you are starting up in Norway.
The Norwegian government institutes have plenty of useful information on their websites about starting up in Norway. Below are some of the most useful resources and tools:
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.