With affluent consumers and productive workforce Norway is a natural location to expand or start a new business. Here are some reasons to establish a business.

  • Setting up and running a business is easy
  • Norway has some world leading industries
  • A productive high skill work force
  • The midnight sun

MAIN TYPES OF NORWEGIAN BUSINESS ENTITIES

  • Limited Liability Companies (AS/ASA)Read more

The most common way of doing business in Norway is through a limited liability companies, abbreviated as AS (aksjeselskap) and ASA (almennaksjeselskap). The main difference between the two entities is that only ASAs are allowed to invite the public to subscribe to shares. An AS or ASA is a limited company owned by shareholders (individuals or other legal entities) and run by directors. The company needs to be registered at the Register of Business Enterprises.

To set up a limited company you need to:

  • Have a name and address for the company
  • Register with the Register of Business Enterprises
  • Have at least 1/3 director(s) (an individual) for AS/ASA
  • Have at least 1 shareholder
  • Have a minimum share capital of NOK 30,000/NOK1,000,000 for AS/ASA
  • Have articles of association (agreed rules about running the company)
  • Register for VAT (if applicable)

Partnerships Read more

Partnerships are established by a partnerships agreement. Although they are regulated by the Partnership act of 1985, partnerships are more flexible than limited liability companies. There are the main types of partnerships in Norway, depending on the legal liability of the partners. Firstly, the partners might each have unlimited liability, abbreviated ANS. Secondly, the partners might have a pro rata liability for the partnerships debt, abbreviated DA. Thirdly, all partners - barred one – might have limited liability, abbreviated KS.

Sole Traders Read more

The easiest way to start a business in the Norway is to become a ‘sole trader’. This means that only you own the business and you can work alone or employ other people.

AND REGULATORY ENVIRONMENT AUDIT

Requirement to keep accounting records Read more

Norwegian law requires all companies to keep adequate accounting records and to file tax return.

All limited liability companies, and branches of foreign limited liability companies, are required to prepare accounts for each financial year which have to be filed at the Register of Companies Accounts. Other types of entities are also required to file financial statements, although some exceptions are made for very small entities.

Accounting standards Read more

Financial statements can be prepared under Norwegian Accounting Standards (NGAAP) or IFRS. Small companies can choose to prepare theirs financial statements under a simplified set of rules. A company qualifies as small if it meets two of the following three criteria.

  • Turnover of less than MNOK 70
  • total assets of less than MNOK 35, and
  • on average less than 50 FTE (full-time equivalent) staff employed.

Audit requirements Read more

All public limited liability companies (ASA) are required to have their financial statements audited. Other companies are required to have their financial statements audited if they satisfy one or more of the following three criteria:

  • Turnover of more than MNOK 5,
  • total assets of more than MNOK 20, and
  • on average more than 10 FTE staff employed.

Financial Supervisory Authority of Norway (Finanstilsynet) Read more

Certain industries, such as financial services and the accounting profession is under the supervision of the Financial Supervisory Authority of Norway (Finanstilsynet) (please refer to http://www.finanstilsynet.no/en/ for more information)

Money Laundering Regulations Read more

The Money Laundering Regulations came into force in April 2009. The regulations apply to a number of different sectors including financial and credit businesses, accountants and estate agents (please refer to http://www.hvitvasking.no/ for more information)

INDUSTRY INCENTIVES

Incentives for R&D

The Research Council of Norway can assist in funding of research and development activities (please refer to http://www.forskningsradet.no for more information)

PRINCIPAL TAXES

The main business taxes that are levied in the Norway are dealt with in turn below:

Corporation Tax

The corporate tax rate stands at 25 % for 2016 ( 27 % for 2015) Read more

Corporation Tax is levied on the taxable profits of companies that are domiciled in Norway or permanent establishments (such as branches) in Norway. Norwegian resident Companies pay Corporation Tax on their worldwide income (which can be subject to double tax relief) whilst non-resident companies will only pay tax on income arising in Norway.

Taxable profits are accounts profits as adjusted for tax legislation. The taxable profit is calculated on the fiscal year that follows the calendar year. However, companies might use another fiscal year if there are special reasons to do so.

Any company making a taxable loss can carry the loss can carry the loss forward to set against future income.

Indirect Tax (Sales Tax)

  • Standard rate 25%
  • Medium rate 15%
  • Low rate  10 %

Turnover threshold NOK 50,000 Read more

Value Added Tax (VAT) is a tax that is ultimately levied on consumer expenditure as businesses registered for VAT must charge VAT on their sales but can recover VAT that they have suffered themselves (such that the end consumer suffers the net cost). Both Norwegian and non-Norwegian businesses that sell goods or services on which VAT should be charged are required to register. Non Norwegian businesses that do not have a permanent establishment in Norway have to be registered through a VAT representative.

The current standard rate of VAT in Norway is 25% which applies to most goods and services. The medium rate of 15% is applied to foodstuff, with the exception of food served in restaurants and alcoholic beverages etc. The low rate of  10 % is applied to hotel accommodation and transportation of persons. There are a number of categories of items that are either zero rated or exempt from VAT, in either case no VAT is charged. A seller making entirely zero rated sales may recover the VAT on their purchases whilst someone making exempt sales will not necessarily be entitled to recover all VAT suffered. There is no VAT charged on exports from Norway.

Income Tax
Every resident individual is entitled to a tax free allowance. For 2016 the tax free allowance is as follows:

Type of income Rate Maximum Allowance
Salary 43% NOK 91 450
Pension 29% NOK 73 600

Read more

Individuals pay Income Tax on their earnings from all sources of income. Taxable sources of income are primarily from employment, self employed income, income from partnerships, dividend income, bank interest and other investment income. Individuals that are Norway resident pay tax on their
is charged at a flat rate. The system is built up so that all personal income is taxed with a flat rate worldwide earnings although their domicile status may affect the taxation of non-Norway earnings. Generally individuals that are non-Norway resident pay tax on their Norway source income only.

Norway has a dual income tax, where personal taxes are taxed on progressive rates while capital income of 25 %, with an additional charge for certain income. For 2016 the additional charges are levied on the following income:

Income type Rate
Salary 7.8%
Income from personal businesses/partnerships 11,4%
Income over NOK 159 800 0,44%
Income over NOK 224 900 1,77%
Income over NOK 565 400 10,7%
Income over NOK 909 500 13,7%

Income tax is dealt with on a fiscal year basis that follows the calendar year. Tax is collected at source from employment income whilst other forms of income need to be reported annually on a tax return. Tax returns need to be filed by 31 May following the end of the tax year.

PAYROLL TAXES

Employers                       14,1%        

Payroll tax is paid by employers based on their salary expenses. The standard rate for this tax is 14,1%, but lower rates are applied depending on the location of the business.