Business Opportunities in Norway
Setting up a business offshore can be a great way of expanding it. If you plan to set up your business overseas, one potential business location is Norway. There are several good reasons to start a business in Norway. However, to ensure it’s hassle-free, you must follow the country’s rules and regulations.
With 27 million people scattered across the country and a growing GDP of USD 1.8 trillion, Norway is a lucrative location for setting up a company. The massive population and rising economy can help you target the desired audience and expand your business. The economy of Norway is a combination of a free market and government intervention. So, the nation maintains a wonderful balance and welcomes more startups to promote economic growth.
According to the report of Ease of Doing Business 2020, Norway bags the sixth position. Besides, the Norwegian government and authorities consider foreign investors equivalent to domestic ones. This is because their primary purpose is to make the economy of this Scandinavian country thrive and reach the zenith. However, entering the Norwegian market needs some knowledge about company registration in Norway, as provided below.
Benefits of Starting a Business in Norway
The advantages of doing business in Norway are listed below:
Norway’s stable and robust economy makes it a suitable location for doing business. With a GNP per capita of 765.836 NOK, Norway has the highest standard of living. So, you can expect to get customers and a target market suitable for your business.
Member of EEA
Although Norway is not a part of the European Union, it is included in the EEA agreement. This implies that Norway is equivalent to the EU countries. So, Norway’s rules, regulations, and legal compliances are similar to the EU countries.
Efficient banking service
For foreign investors, the banking system of Norway is efficient and meets all business requirements. The steps for setting up a company bank account is uncomplicated.
Businesses in Norway have to pay a corporate tax of 22%. However, some exceptions depend largely on the economic sector and geographical region. Expenses on research are tax deductible. Businesses in the northern part of Norway pay less worker tax.
Rise in foreign investment
The government of Norway fosters foreign investment in the hope of enhancing its economy. In the last decade, the number of foreign investments in Norway has experienced a hike. Foreign-owned businesses provide 20% of the country’s employment. Again, 25% of Norway’s economic value is generated from international businesses.
Requirements for Starting A Business in Norway
The requirements to do business in Norway are mentioned below:
Visa and work permit
People belonging to any Nordic country or if they are a member of the EEA or EU do not require a work permit. Other countries need a Norway work visa, provided you submit the job application. While the Norway work visa will allow you to enter the country, its residence permit or work permit will authorize you to work in Norway.
After the visa application submission, it will take you almost two months to process. You can only start working after the approval of your visa. The Norway work visa will cost you NOK 6,300. The validity of this work visa is two years. However, you can extend its validity by applying for it before its expiry.
For business name registration in Norway, these are the factors to keep in mind:
- Choose a unique name that has no similarity to other business enterprises registered in the Register of Business Enterprises in Norway.
- The company name should have at least three Norwegian letters.
- Opt for trademark protection with the Norwegian Industrial Property Office to protect the business’s name.
The address of your company should be in Norway. No postbox address will be considered valid. The format of stating the address is as follows:
- Street or road
- House number
- Postal town
The business capital required for a business to do in Norway depends on the type of business structure you adopt. A sole proprietorship and partnership business will require no minimum capital. But, in the case of private and public limited liability companies, you have to pay NOK 100,000 and NOK 1 million, respectively. Again, for a branch office, you have to pay a minimal fee of NOK 2,832.
All Norwegian businesses have to pay a corporate tax. This tax is calculated based on a company’s earnings in Norway.
Director and company secretary
The number of shareholders varies from one company to another and depends on the type of business entity you establish. There can be unlimited shareholders in private and public LLCs. For partnership businesses as well, the number of partners can be unlimited.
There has to be at least one director for a partnership company and a private limited company in Norway. On the other hand, a public limited liability company should have at least three directors. In the case of corporate assembly, five directors are required.
Types of Business Structures in Norway
Before offshore company registration in Norway, it is crucial to figure out the different business structures operating in the country. These are pointed out below:
- Can be registered under commercial legislation
- The complete liability of the entrepreneur
- 15 years minimum age requirement
- No residency requirements
- Must have a Norwegian business address
Private limited liability
- Must have a share capital of NOK 100,000
- Limited liability of shareholders
- Non-transferable shares
- Most suited for small or medium businesses
- Must pay a corporate tax of 23% in two installments
- Dividends must pay a tax of 30.59% on the sum
- Liable to VAT for companies with a yearly turnover of NOK 50,000
- 25% standard VAT
Public limited liability
- Based on higher share capital
- Transferable shares
- Must have a minimum share capital of NOK 1 million
- Limited liability of shareholders
- Can be registered by legal entities or natural persons
- A founder must be at least 18 years
- Must have a physical business address
- Based on company assembly
- Registered by the Register of Business Enterprises
- The agreement should contain the company name, partners’ address, capital investment, headquarters address, and company role.
- No minimum share capital required
- Can be divided into general partnership and limited partnership
- A general partnership must have two active owners
- Unlimited liability of company debts on the owners
- Two or more partners form limited ownership
- Can have both silent partners with limited liability and active partners with unlimited liability
- No minimum share capital required
- Must be registered under the Register of Business Enterprises
- Must pay a fee of NOK 2,832
- The parent company should provide these documents:
- Company registration certificate and a copy of the parent company’s certificate
- Article of incorporation and memorandum of association of the parent company
- Name of people responsible for branch office
- Address of branch office
- Recorded time when the decision to open a branch office was taken
Company Registration Process
The steps to incorporate a company in Norway are given below:
Step 1: Business planning
First and foremost, you must set up a business plan and choose a business entity that suits your business.
Step 2: Obtaining D-number
All foreign investors should acquire a D-number to establish a business in Norway. This is a temporary identity number. To get this, apply at the Bronnoysund Register Center. This D-number will help you to open a bank account in your company’s name.
Step 3: Choose the company name and address
Select a unique company name without connection to an existing Norwegian business. The business address should be a Norwegian one.
Step 4: Submitting relevant documents
After depositing the required fee, you will get a receipt from the bank. Along with this receipt, submit the application form, article of association, memorandum, address proof, work permit copy, and all details about shareholders and directors to the Norwegian Register of Business Enterprises.
Step 5: Opening bank account
Now, you need a corporate bank account for business transactions.
Step 6: Tax registration
Register your company with the Norwegian Tax Administration for a TIN or Tax Identification Number.
How Much Does It Cost to Incorporate a Company in Norway?
The cost of incorporating a company in Norway varies and largely depends on the type of business entity you establish. You do not need any share capital for sole proprietorship and partnership businesses. However, in the case of private and public limited companies, you need a minimum capital of 100,000 NOK and 1 million NOK, respectively. To set up a branch office, you have to pay a fee of NOK 2,832.
Are Foreigners in Norway on Certain Passes Allowed to Start a Business in Norway?
Yes, foreigners can start a business in Norway, provided they have a work visa and a work permit. People belonging to countries apart from the Nordic nations, the EEA, and the EU need work visas and permits. To apply for a Norway work visa, you need the following:
- A valid job offer
- A work permit
A work permit in Norway is valid from one to three years. However, it can be extended three months before its expiry. All immigration tasks in Norway are handled by the Norwegian Immigration Authorities. The other essential documents include the following:
- Two passport-size photographs
- Confirmation of travel insurance
- A copy of the flight ticket
- Proof of sufficient financial resources
- Proof of accommodation during the whole stay
- Civil status proof
Government Assistance for Foreign-owned Businesses
You get grants for starting a business in Norway. The popular governmental and non-governmental schemes that stand by businesses and startups are as follows:
- Innovation Norway aids startups in two phases. In the first phase, it provides 50,000 NOR, and in the second phase, businesses get 100,000 NOR. However, this grant value depends on the complexity of your business.
- StartUp Labs helps businesses with funding, development, and extensive networking.
- LeanVenture promotes innovative IT-based business models and aims at better digitalization in Norway.
How Multiplier Can Help
Norwegian business incorporation can be daunting, especially if you are unaware of the country’s compliances. With Multiplier by your side, you don’t have to consider taking the wrong step. We help you set up your business and expand your company all over the globe.
Our comprehensive platform and cutting-edge solution can help you thrive globally. Our tech-driven and transparent solution helps streamline your company’s payroll, employment contract creation, workforce management, etc. Contact Multiplier today to set up a business overseas.