Multiplier Logo
Loading Animation Image
Payroll In Norway

Subsidiaries in Norway

Norway is a suitable location for foreign companies to start a business due to its transparent business setup process and economic practicality. The country provides numerous tax incentives, access to funding through government programs, and access to a highly-skilled workforce. According to the World Bank, it is a high-income economy suggesting that it is one of the best countries to start a business. It ranks 9th in the 2020 Ease of Doing Business Index and 30th globally in terms of GDP.

Establishing a subsidiary is one of Norway’s most straightforward and practical business entities. Companies can set up a subsidiary in the country in a few steps, requiring less paperwork. They must conform to Norway laws and regulations and can subsequently enjoy tax incentives.

The following guide discusses everything you should know about setting up a subsidiary in Norway.

What are the Types of Subsidiaries in Norway?

The below section discusses details of various subsidiaries you must know prior to setting up a subsidiary system in Norway.

Public Limited Company (Allmennaksjeselskap (ASA))

  • – minimum of one shareholder and a board of directors are required to form a public limited liability company in Norway.
  • 50% of board members should be citizens of Norway or an EU/EEA country.
  • The minimum share capital needed is 30,000 NOK.
  • All involved board members should apply for a Norwegian D Number (personal identification number). 

Private limited company (Aksjeselskap (AS)) 

  • The minimum share capital needed is NOK 1 million.
  • 50% of board members should be citizens of Norway or an EU/EEA country.
  • This type of company should have at least two directors, one of whom should be a resident of Norway. 
  • Board members should apply for a Norwegian D number. 

General partnership (Ansvarlig selskap (ANS))

  • The general partnership should be created by a minimum of two active owners with unlimited liability for all debts.
  • It is the most suitable legal form for small or medium enterprises which don’t operate in the riskiest segments of the business market.
  • In ANS, every individual owner owns the legal responsibility for any company obligation, not merely for the invested capital.
  • A partnership agreement should be written, contracted, and registered with the Norwegian Register (Foretaksregisteret).

Limited liability partnership (Delt Ansvar)

  • The limited liability partnership is established by two or more partners with diverse statuses. All involved partners are liable for the company’s debts.
  • It includes the silent partners with limited liability and the active partners with unlimited liability based on their contribution.

How to Set Up a Subsidiary in Norway?

The following steps will help you to establish a subsidiary company in Norway.

  • Step 1: Select a company type for the business and decide on the company’s name.
  • Step 2: Register the company via the Brønnøysund Register Center.
  • Step 3: Open a bank account and deposit the minimum required share capital.
  • Step 4: Obtain the bank’s ‘deed of deposit’ after the external auditor approves the balance in the account.
  • Step 5: Register as employers on the Central Coordinating Register for Legal Entities to get a unique Norwegian organization number (NUF).
  • Step 6: Submit the necessary documents and company application form to the Norwegian Register of Business Enterprises online or through post.

After successful registration, subsidiaries must register with the following organizations:

  • Register for Value Added Tax (VAT) via the Simplified VAT scheme for e-commerce if yearly turnover is expected to surpass NOK 50,000.
  • A mandatory occupational pension plan (OTP)) and workers’ injury insurance (via National Insurance Scheme)
  • The Tax Administration and the Labor and Welfare Administration (NAV) submit tax and social insurance deductions.
  • National Insurance Confirmations (NIC) to pay national insurance contributions.

Benefits of Setting Up a Norway Subsidiary

The perks of setting up a subsidiary company in Norway are discussed below.

  • A foreign company is not accountable for the subsidiary’s liabilities or debts.
  • It is easier to acquire loans and finance, get regulatory approvals, and join contracts with other European and Norwegian companies.
  • It permits companies to sign agreements with other Norway or EU companies.
  • The subsidiaries in Norway offer more permanency than branches and hence benefit suppliers and clients with more control.
  • Norway boasts a stable economy and flourishing business network because it is an EEA member. Establishing a legal entity in the country gives your company plenty of business opportunities and sets your company’s objectives for a long-term investment.
  • It enables businesses to recruit employees well-versed in the local market and available business opportunities. It also simplifies establishing partnerships and relationships with local organizations and benefits from their local expertise and networks.
  • It simplifies getting tax incentives to facilitate economic activity by decreasing tax payments.

Documents to Prepare When Opening a Subsidiary in Norway

Companies must prepare the documents listed below while applying for subsidiary incorporation in Norway:

  • Memorandum & Articles of Association
  • Power of Attorney (if you own it)
  • Organizational and legal form
  • Details of the individuals that are appointed as the board members and those appointed as the chairman of the board for the subsidiary in Norway
  • The official description of the business and its purpose
  • Proof of registered address of the subsidiary in Norway
  • Certificate of registration
  • Incorporation Deed
  • An official request for Business License Registration
  • Bank certificate for proof of deposit of necessary capital
  • A real estate clearance certificate
  • A statement declaring that the partners are not banned from setting up a company by law or by opinion.
  • The company name’s consultation certificate
  • Proof of residence for the company administrator/partners
  • Statement from the auditor about the contributed share capital
  • Auditor’s declaration of approval of the assignment or minutes of a board meeting if it’s agreed not to have an auditor.

What Business Forms can Norway Subsidiaries Take?

Subsidiaries in Norway can adopt one of these standard subsidiary forms:

  • Public limited liability company (Allmennaksjeselskap (ASA))
  • Private limited company (Aksjeselskap (AS)) limited company
  • General partnership (Ansvarlig selskap (ANS))

The company can select the most suitable subsidiary form based on the business objectives and requirements.

Norway Subsidiary Laws

The companies intending to establish a subsidiary in Norway should consider the following laws:

  • Under Norwegian law, for private limited companies and public limited companies, at least 50% of board members should be residents in Norway or an EU/EEA country.
  • The board members should apply for a “Norwegian D Number” (personal identification number).
  • Foreigners must know that a minimum share capital of NOK 30,000 is needed to set up a Norwegian private limited liability company.
  • The “RF-1086” form (the shareholder register statement) should be submitted by all Norwegian private and public limited companies and then submitted to the Norwegian Tax Administration. Consequently, the Norwegian Tax Administration forms a solid basis for the tax return and benefits the company’s shareholders by updating their individual, pre-filled tax returns.
  • Typically, foreign corporate bodies are recognized as separate tax entities under Norway laws. Hence, Norwegian resident shareholders are not taxed on the foreign company’s income in which they hold shares unless amounts are sent as dividends or through other means to the shareholders.

Post-Incorporation Compliance

The compliance checklist for incorporation of foreign subsidiaries in Norway covers the following aspects:

  • Norway imposes harsh fines (for example, enforcement fines) on the inability to timely and accurately comply with Norway laws.
  • Acquire the business certificate of commencement 
  • The registered office must be established within 30 days from the subsidiary’s incorporation date. The relevant office address will support all formal communication from various authorities.
  • The shareholder receives a share certificate 
  • You might be asked to maintain statutory registers at your company’s registered office.
  • The BOD would appoint the company’s first auditor within 30 days of the subsidiary’s formation. Moreover, the first auditor will oversee the office administration until the first AGM (Annual General Meeting) ends.

Taxes on Subsidiaries in Norway

A subsidiary in Norway is subject to the following taxes:

Taxes

Rates

Capital gains

22%

Personal income tax

1.7% to 17.5%

Corporate income tax

22%

Withholding tax

25%

Property tax

0.1% to 0.7% 

Stamp tax

2.5% of the fair market value

National insurance contributions

0% to 14.1% based on the municipality of the head office of the business

Exit tax

22%

Financial activities tax

5%

VAT

25%

Reduced rates of 15% apply on food and beverages (excluding alcohol, tobacco, medication, and water from waterworks)

12% applies to domestic passenger transport services and access to such services

Tax Incentives for Companies Setting Up a Subsidiary in Norway

Regardless of the sector, your subsidiary business in Norway can benefit the most from the tax incentives discussed below.

  • The SkatteFUNN R&D tax incentive scheme encourages R&D activities in Norwegian trade and industry. The enterprises and businesses subject to taxation in the country can apply for tax relief. The company must have the objective of developing a new or revised asset, production process, or service.
  • The Norges Forskningsråd (The Research Council of Norway) must approve the application for SkatteFUNN. It is issued for up to 3 years.
  • Upon the approval of the application, a form must be attested by the company’s auditor. Moreover, the ordinary tax return is sent together to get the tax incentive.
  • If a foreign company holds a minimum of 10% of the subsidiary’s capital for at least two years, it can claim a tax credit in its country of residence. Such regulations exist under the provisions of various double tax treaties contracted by Norway with various partner countries.

Other Important Considerations

Apart from the compliance checklist for incorporation of foreign subsidiaries in Norway, you should consider certain other essential considerations, as discussed below

  • Group relief is provided among Norwegian subsidiaries of a foreign parent till 90% of the holding requisite is fulfilled up to 31st December. This rule also applies to every foreign company in the EU/EEA countries that is analogous to Norwegian companies. But, the relevant condition is that until they are taxable to Norway through any permanent establishment, the tax is imposed on group relief in the country.
  • Typically, the subsidiary incorporation process can continue for up to a few weeks. You should spare enough time and capital required. Besides, you might have to organize your schedule to recurrently travel back and forth to Norway until the subsidiary incorporation process finishes.
  • The government may ask for extra investment capital to create your subsidiary based on the type of business sector.
  • To form a subsidiary system in Norway, you must consider residence permits, insurance, registration with the federal tax administration, and applying for any licenses (if needed).

How Can Multiplier’s Employer of Record Help You Hire & Expand in Norway?

Dedicating enough time and capital is difficult to grow your business in a foreign country. Abiding by industry standards and a country’s labor regulations demands considerable time and effort. Reliable services from a third-party service company like Multiplier help you easily form a subsidiary system in Norway.

Multiplier administers all the regulations extending from steps to set up subsidiaries to payroll processing while discovering a new market. It excludes the need to form an entity. Additionally, Multiplier assists you with recruiting global and local talent while maintaining compliance with Norway’s regulations and labor laws.

Frequently Asked Questions

Your age should be over 18 years to start a subsidiary in Norway. If you’re a foreign national, you will require a ‘D Number,’ the registration card all foreigners must use in Norway.

Typically, Norway’s investment regime is based on the national treatment principle. However, the ownership restrictions apply to specific natural resources and activities (like maritime/fishing/road transport). Besides, there is a restriction on the purchase of over 10% of the share capital of a Norwegian financial body.

Two of the most popular legal entities are AS (a private limited company) and NUF (a Norwegian branch of a foreign company).

Need Reliable Help In Obtaining A Work Visa?

Table of Contents

World’s Preferred EOR/PEO Platform for a Global Workforce