When setting up a business in Norway, there are a number of laws you have to comply with.
Some important Acts are:
The choice of legal structure will be one of the first questions to come up when you want to start your own business. In Norway, you can choose between various legal structures.
- A sole trader (Norwegian: ENK) is a business where the owner bears the full financial liability for the debts of the enterprise.
- A partnership (ANS or DA) is an enterprise with one or more shareholders (owners) who each assume personal liability for the debts of the business.
- A limited company (AS) differs from the first two legal structures in that the owner(s) do not bear personal liability for the company's commitments. The owner(s) must put up share capital of at least NOK 30 000. They can normally only lose their initial stake in the company.
- A public limited company (ASA) has much in common with an AS but, among other things, it has to have share capital of at least NOK 1 million.
- A Norwegian branch of a foreign company (NUF): Here, the foreign company is liable for the business of the Norwegian branch. The branch will normally be liable for tax and other deductions in Norway, and must otherwise comply with Norwegian regulations just like any other Norwegian company. There are no capital requirements for an NUF.
- A cooperative (SA) is an independent grouping which must have at least two owners, none of whom bear any personal liability for the commitments of the enterprise. This legal structure is user-owned and managed.
- A foundation is formed when an asset is independently provided by way of a will, bequest or other legal arrangement for a specific purpose of a non-profit, humanitarian, social, educational, economic or other nature. Commercial foundations must have minimum paid-up capital of NOK 200 000.
Business activities and applicable rules
For specific economic activities, special authorisation is required in order to engage in the line of business. Among other sectors, this applies to:
- debt collectors
- healthcare staff
- the transport industry.
Business plans and evaluation
Before starting a new enterprise, the entrepreneur should draw up a business plan for its activities. A business plan is a systematic analysis of the business idea, and is an important management tool.
In Norway, there is no obligation to produce a business plan, but in-depth work at this stage will increase the likelihood of the project turning out well, and will provide a better overview of the real risks in the business concept.
To succeed, a new business needs a sound commercial strategy and secure financing.
Some standard requirements to be completed when setting up a business are the same as when opening a branch.
Altinn is an online portal and a technical platform for submitting electronic forms to public bodies, but it also offers electronic services such as notices from public bodies and inspection of public registers. Among other things, users can register a business, submit VAT returns and send in self-assessment forms for both individuals and companies.
Registering the enterprise
The authorities must be notified when an enterprise is formally established, when employees are taken on and when sales of taxable goods or services begin. Once at least one of these situations arises, the enterprise must be entered in the Central Coordinating Register for Legal Entities at the Brønnøysund Register Centre.
The Business Enterprises Register Act lists a number of legal structures that have to be entered into the Register of Business Enterprises.
Broadly speaking, this obligation applies to businesses where liability is limited (such as limited companies - AS) and to any person who engages in an economic activity, apart from some sole traders. Sole traders only have to be entered in the Central Coordinating Register for Legal Entities if they buy and sell goods or have more than five employees. Other sole traders are free to register voluntarily.
To register a business in the Central Coordinating Register for Legal Entities and/or the Register of Business Enterprises, you use the Coordinated registration form.
Most legal structures can be registered electronically via Altinn.
Foreigners who do not have a Norwegian social security number can apply for a
D-number at the time of registration.
Registering for National Insurance
As a general rule, anyone resident in Norway has to be a member of the Norwegian national insurance scheme.
For owners of one-person businesses (sole traders) and members of a partnership, social security entitlements are calculated on the basis of their annual pensionable income. It is possible to take out additional insurance to obtain better cover in the event of illness.
Employees' entitlements are based on their salary. Employees must be entered in the Register of Employers and Employees no later than the Friday of the week before the employment begins.
There is also a legal obligation to provide an occupational pension for employees.
Registering for tax
Owners of one-person businesses (sole traders) and members of a partnership must pay advance tax for each period once there is any income. Payment forms are sent out four times a year.
The amount payable is based on an estimate of how much income there will be. The Tax Office must be informed of the expected profit in the first year.
Limited companies and other establishments pay tax in the year after the income year. The business itself must contact the tax office to notify it of the start-up.
If the enterprise has any employees, the employer must deduct tax and employer's contributions from each employee's salary. This is reported and paid by way of periodic declarations to the Tax Collector.
If there are any VAT-liable sales, the enterprise must be registered in the VAT Register at the Tax Office.
This must take place when the sales by the enterprise of VAT-liable goods and services together exceed NOK 50 000 over a 12-month period. You can apply to the VAT Register at the same time as the Central Coordinating Register for Legal Entities.
The basic principle is that there is full freedom of establishment in Norway, but there are a few rules to bear in mind when producing or selling goods that may be directly harmful or which society wishes to regulate for other reasons.
This includes requirements for serving food or selling alcoholic drinks. Whatever sector they are in, many people will also apply to the local council (municipality) in connection with the construction, change of use or conversion of business premises.
There is a separate database covering the national conditions (permits) applicable to different sectors.
You can find more information here: