How to set up a company in Norway? What is AS, NUF and enkeltpersonforetak?
Is it worth running a company in Norway? If you only feel strong enough to grow your business across the fjords and deal with the specific Norwegian mentality – then definitely give it a go. Especially because it is a very dynamic market on many levels, and given the population of Norway, there are many niches to develop. To start with, however, you need to know how to set up a company in Norway and learn about the type of companies such as AS, NUF and enkeltpersonforetak.
Who can set up a company in Norway?
The issue of starting a business abroad is facilitated by the fact of Poland’s accession to the European Union in 2004. Although Norway does not belong to this community, as a member of the European Economic Area it guarantees the freedom to settle, work or open a company for citizens of EU countries. In practice, all you have to do is register your stay and create your personal number (first the d-nummer, then fødselsnummer). That’s all. From this point you can do official matters over the fjords.
How to set up a company in Norway?
With a basis for contacting offices, you can start a business in Norway. Before you do this, you should choose the form of business that suits you best. Basically, you have a choice of three company types, namely: enkeltpersonforetak (ENK), aksjeselskap (AS) and norskregistrert utenlandsk foretak (NUF). How do they differ and how to set them up?
Enkeltpersonforetak – what type of company is it and how to establish it?
The most common business activity in Norway is enkeltpersonforetak. It is the equivalent of a sole proprietorship, in which you are responsible for all your assets, as there is no separation between the company’s income and the owner’s income.
Registering enkeltpersonforetak in Norway requires only a few steps. It is enough to report it to the register of business entities (enhetsregisteret). Optionally, you can make an entry in the business register (foretaksregisteret), but this is a paid operation and you do not have to do it at the very beginning of your activity. Unless you run a commercial business or employ more than 5 people from the start. Also, keep in mind that when employing even one person, you must additionally register your business in the register of employers (Aa-registeret).
Enkeltpersonforetak – the pros and cons
In addition to a large degree of responsibility for the results of the company’s operations, the disadvantages of running an ENK company is also the fact that its owner is not subject to the provisions applicable to employee rights. Therefore, he/she cannot receive a holiday allowance (feriepenger), and after closing the company he/she cannot receive an unemployment benefit (dagpenger). He/she is also not entitled to any privileges resulting from the act on accidents at work and the act on pay-related disputes.
Running a sole proprietorship in Norway also has a number of benefits. The popularity of ENK is primarily determined by the simple way of registering it. In addition, it is ideal for people who do not want to have any partners and want to decide on the development of their own business. It’s important to note that you do not need any initial capital to register an ENK-type of company in Norway.
How to set up an AS company in Norway and what is it?
The conditions for conducting an aksjeselskap-type of business look much different. It is the equivalent of a limited liability company and basically operates in exactly the same legal conditions. Registering an AS company in Norway also requires more formal aspects to be fulfilled and appropriate documents to be submitted. You can’t forget about the following:
1. Articles of association.
2. Opening balance.
3. Minutes of a meeting of the supervisory board.
4. Confirmation of the initial capital payment.
You must also provide entries in the same registers as for ENK registrations. In addition, when establishing AS, you are required to register it in the Register of Entrepreneurs (foretaksregisteret), which in the case of sole proprietorship is not mandatory at first.
AS company in Norway – the pros and cons
Registering an AS company in Norway has certain advantages. First of all, the property liability for company debts is limited only to the amount of shares contributed by each of the shareholders. In addition, the owner of such a company may be employed in it, which gives him/her all the employee privileges, including holiday pay and the right to unemployment benefit.
What are the cons then? First of all, registration of AS in Norway alone requires much more formal aspects to be fulfilled as compared to ENK. In addition, the whole procedure is more expensive. You also have to take into account the higher costs of doing business, which is a direct result of the need for more advanced accounting as well as reporting requirements. It is worth remembering that such entities are often controlled by Norwegian authorities, so even more attention should be paid to formal issues than in the case of ENK.
How to set up a NUF company and how does it work
In addition to ENK and AS, there is a third way to register a company in Norway. There is basically one condition to fulfil – you must have a business registered in another country. You can then only open a branch in Norway, i.e. norskregistrert utenlandsk foretak (NUF). There are basically two types of NUFs – with a VAT representative and a contact person.
What is NUF with a VAT representative and how to set up?
NUF with a VAT representative is nothing other than a branch of a foreign company in Norway entered in the VAT register. You do not have to have the initial capital and you are required to send tax reports to the Norwegian Tax Office. Extensive administration is also required to service high value contracts. Furthermore, this type of activity is exposed to increased controls by the Norwegian regulatory authorities.
You also need to know that NUFs do not enjoy high trust among Norwegian entrepreneurs. Banks can also create problems with opening accounts, and insurance companies with signing contracts. Registration of a branch requires a number of formal aspects to be fulfilled, and above all, registration to Brønnøysundregistrene. A correctly completed application must contain the following:
• articles of association,
• company statute,
• entry in the register of companies in the home country,
• address data,
• all required powers of attorney,
• name of the branch in Norway,
• scope of planned activities,
• personal data of people responsible for managing the NUF branch.
What is NUF with a contact person in Norway?
NUF with a contact person also faces similar problems. Norwegian companies also do not trust such entities too much, and the same applies to Norwegian banks and insurance companies. However, registration of this type of branch is much simpler, and supervision of operational documentation becomes easier. In addition, there are no major differences between registering and running a NUF with a contact person and with a VAT representative.
Establishing a company in Norway – additional obligations
You must remember that just setting up a company in Norway is not the end of the formalities. As a Norwegian entrepreneur, you will be subject to national laws governing how you should do business across the fjords. The most important duties include all activities that you must take in relation to the tax office (Skatteetaten). It is quite peculiar that you pay it in the form of advance payments throughout the year, and after closing the billing period, Skatteetaten performs billing and gives you information on how much you still have to pay. Income tax is paid in four instalments (ENK) or in two instalments (AS companies).
VAT is an additional obligation, as long as you obviously had to sign up for Merverdiavgiftsregisteret. This tax is settled in the form of a declaration, which you must submit every two months via the Altinn.no portal. Each VAT report must include account statements for a given period, all invoices issued, as well as documentation of the costs incurred.
HMS, i.e. health and safety regulations in Norway
As long as you run your own business alone, you don’t have to worry about Norwegian Health and Safety (HMS) regulations. However, when you employ at least one person, you become an employer, and thus you should begin to become familiar with the HMS regulations. It’s important to note that as an entrepreneur, you must complete a basic HMS course. It must also be carried out by the manager, if appointed. For larger teams of more than 10 employees, it will be necessary to appoint an additional OHS representative (verneombud). Each employer should also carry out an occupational risk analysis.
How to set up a company in Norway? Is it profitable?
In theory, setting up a company in Norway is not something that’s impossible. It is especially easy to register a sole proprietorship. However, you must remember about the formal aspects that you as an entrepreneur must fulfil. Nevertheless, undertaking this effort can be extremely profitable, especially considering future income but it may take some time for Norwegian companies to trust you. If you manage to build a brand in Norway, you will not have major problems with finding new orders for your products or services. The country of the fjords is distinguished by a thriving economy and you have an opportunity of becoming a part of it.
Do you need translations if you manage a business in Norway?
Keep in mind that once you decide to start a business in Norway you have to make sure you have good translations into Norwegian. Norwegians are reluctant to communicate in other languages, requiring their contractors and colleagues to have at least basic knowledge of Norwegian. Therefore, the language correctness of all materials related to the company may prove to be decisive at the first contact with a future customer. We are happy to help you with translations – use our convenient form and order a free quotation.