A branch opened in Norway offers foreign companies the possibility to merchandise their goods and services in the country and conclude new contracts with local businesses. It is not considered a legal entity, so for the major decisions the approval from the parent company is necessary and the liability for its action is also taken by the parent company abroad.
All foreign investors interested in setting up a branch office in this country should receive professional assistance from our team of company formation consultants in Norway.
Table of Contents
The branch office – definition
According to the law, a branch office is not a legal entity itself, it is an extension of a company operating under the parent company’s umbrella. In Norway, both local and foreign companies can open branch offices that will be bound to complete the same activities of the mother company.
Setting up a branch office is usually compared to the creation of a subsidiary, however, the differences between are quite important and have to do with taxation and independence from the parent company.
If you want to expand your company’s operations in Norway, the differences between the two business forms can be explained by our specialists so that it can easy your decision.
|Applicable legislation (home country/foreign country)||
Foreign country's Company Law
Best Used For
Regulated activities, such as financial and
Minimum share capital (YES/NO)
|NO, there is no minimum share capital requirement to establish a branch in Norway|
|Time frame for the incorporation (approx.)||Approx. 5 weeks|
Documents to be filed by
|Foreign company's incorporation certificate and statutory documents, registration application form, proof of registered address in Norway, information about the resident director in the case of non-EU/EEA businesses|
At least one local manager must be appointed to
|Legal representative required (YES/NO)||
YES, a local legal representative is required
|Local bank account (YES/NO)||YES, in order to establish a branch in Norway it is necessary to open a bank account|
|Independence from the parent company||Fully dependent on the foreign company|
|Liability of the parent company||The parent company is fully liable for all branch office's debts and obligations|
|Corporate tax rate||22%, however, financial companies are subject to a 25% rate|
|Annual accounts filing requirements||
Audited annual income reports must be submitted
by the parent company
|Possibility of hiring local staff (YES/NO)||YES, it is possible to have local workers|
|Travel requirements for incorporating branch/subsidiary (YES/NO)||It is not mandatory to travel to Norway during the first stages of the branch registration procedure|
|Double tax treaty access (YES/NO)||YES, approx. 40 double tax agreements are enforced|
Characteristics of branch offices in Norway
When deciding to expand the operations of a company in Norway or any other country, the branch office and the subsidiary are the two structures a business owner will have to choose between. There are significant differences between the two legal forms, and the decision should be made in accordance with the development lines of the company.
When opting for a branch office in Norway, the following characteristics of this legal entity must be taken into consideration:
- the branch office is a dependent business form, meaning that all decisions will be made by the parent company,
- the operations of the branch office will be the same as the parent company’s,
- the branch will be registered in Norway based on a written decision of the foreign company,
- even if entirely owned by the foreign enterprise, the branch must respect the regulations imposed in Norway.
Setting up a branch office in Norway implies respecting the foreign company’s rules and regulations and abiding by its policies, however, respecting the laws and operating under the licenses issued by the hosting country. In respect to the licenses that need to be obtained, these must be requested by the parent company on behalf of the branch office.
We remind foreign business owners that opening a branch in this country in 2023 implies running a satellite company and our company formation officers in Norway can provide more information in this sense.
Registration requirements for a branch office in Norway
One of the main aspects that have to be concluded before starting any business activity in Norway is the registration with the Register of Business Enterprises (known as “Foretaksregisteret”). The documentation for registering a branch is more complex than for registering a local company and includes the name of the foreign company and its address, as well as a copy of the articles of association.
It is also required to offer a list with the company’s managers and secretary, the name of the branch and the address, the name of the person in charge with the registration of the branch and the activities that will be performed by the branch. It will also be required to provide the following:
- • a copy of the decision of the competent body to set up a branch office in Norway;
- • the name of the person who is entitled to take decisions in the name of the parent company;
- • the names of the persons who are part of the branch office’s board (if applicable);
- • the proof that the company is registered in the foreign country and the certificate of registration.
All the above documents must be notarized and accompanied by a Norwegian translation. As a result, the branch will receive a registration number and a certificate of registration. After that, the company will receive a letter with questions regarding the future activities of the branch. After completing it, the company is registered for the payment of specific taxes and value added tax (VAT).
In the situation in which the branch office will hire employees, it will be necessary to register them for social security purposes, as requested by the local legislation. Only when all the above steps were taken, the branch may begin the commercial activities. The entire process doesn’t take longer than ten working days if all the documents are accurate.
The procedure to open a company in Norway seems simple. In reality, Norway is among the nations in which starting a business is one of the simplest in the world. However, ensuring you have all the documents ready can be left to our lawyers who will help you have your enterprise up and running in the shortest time possible.
Requirements for investors outside EU/EEA
Foreign investors who want to open a company in Norway as a branch office, who are citizens outside the European Union (EU) or the European Economic Area (EEA), will need to obtain a residence permit prior to starting their business activities here. The residence permit will also allow the foreigner to work in Norway. Our team of specialists in company formation in Norway can provide legal assistance to foreign businessmen outside these regions, but details on the documents that must be submitted may also be obtained from the Norwegian Directorate of Immigration.
Other requirements when opening a branch in Norway
There is no minimum share capital required when opening a company in Norway that operates as a branch office. The company’s capital and the assets of the branch must be provided by the parent company abroad. A list with all the branch’s assets will also include the assets of the foreign company and in case of liquidation, these assets can be used to cover the debts.
A Norwegian branch must pay the same taxes as a local company, with some exception in the cases where the company is from a country which has signed double tax treaties with Norway. In this case, the withholding tax on dividends, interests and royalties may be exempt or decreased and the corporate tax on income may be credited or exempt.
Branch office registration steps in Norway in 2023
When setting up a branch office in Norway, there are several steps to complete. These are:
- – the trading name reservation must be completed with the Norwegian Trade Register,
- – information about the parent company and the decision of creating the branch must also be filed with the Companies House,
- – the branch must also have a local office in this country (virtual office packages can be employed in the beginning),
- – the branch office must be registered for taxation and VAT in Norway,
- – the business licenses must be obtained with the relevant authorities in Norway.
A particularity of a Norwegian branch office is that is must bear the same name as the parent company. This will not be problem if the foreign business has registered its name as a trademark and thus being able to submit it for reservation here without any issues.
If you want to open a company in Norway and decide for a branch office, our consultants are at your service for guidance in meeting all the requirements and preparing the necessary documents for business incorporation.
What activities can a Norwegian branch office undertake?
As a vehicle that can complete the same activities as the parent company, a Norwegian branch office can seem very restrictive from this point of view. This is why, this legal entity is usually employed in industries such as banking and financial services. It can also be used for conducting activities like IT, however, this is seldom the case.
Another particularity of the branch office is that when created in another country, it needs to be subject to strict regulations in order to perform at its best. This way, it will not encounter any difficulties.
The branch office bears no responsibility, as the parent company is the one making management decisions and implementing any special requirements.
Management requirements when opening a branch in Norway
Even if the purpose of the branch office will be established by the parent company, the creation of a branch in Norway implies appointing an independent management that will comply with the requirements of the parent company. Also, the branch office must have at least one Norwegian resident representative. There are two options in this sense:
- – the parent company can transfer an employee from the main office;
- – can appoint a local agent to represent the branch office.
In the case of intra-company transfers, residence permits are required in the case of non-EU citizens.
Starting a branch office in Norway is not complicated and the procedure is simpler than in the case of a subsidiary, for example, thanks to the fact that the parent company already has an established presence.
Another requirement that must be considered when creating a branch office is that it is recommended for it to have the same name as the parent company, however, it can also operate under a different name. This will ease the registration procedure and will also enhance brand recognition on the Norwegian market.
Licensing requirements for setting up branches in Norway
When it comes to the laws it must abide by, the branch office is a hybrid, as it must comply with the legislation imposed in the country it operates while respecting the regulations of the mother company, or better said, the parent business must make sure its branch complies with the Norwegian legislation.
Foreign companies must apply for the operating licenses with the industry regulators in Norway when creating branches here. This is not a problem when local companies decide to set up branch offices.
The licensing phase is not complicated and does imply stringent or additional requirements compared to obtaining the necessary permits for a domestic business.
Our company formation agents in Norway can offer information on specific licensing requirements where these exist.
Taxation of branch offices in Norway
One of the main subjects related to starting a branch in Norway is taxation. In this country, companies are taxed based on residency, which means that branch offices will pay the corporate tax only on the income generated here. However, this can be influenced by whether the parent company is incorporated in a country that has a double tax treaty with Norway or not. In the first situation, tax deductions or credits are available for foreign companies operating through branches here.
Another important aspect to consider is that the branch office must register for VAT in Norway and it is required to comply with the filing requirements imposed by the tax authorities here just like domestic businesses. VAT filings are due twice a month in Norway, while annual tax returns must be submitted on a yearly basis.
The branch office is required to file its accounts, as well those of the parent company with the Company Register. Audited records must be filed in certain cases, however, our accountants in Norway can provide detailed information on the financial document filing requirements. VAT registration in Norway can be handled by our company registration advisors. They will help both local and foreign companies dealing with VAT-taxable supplies to obtain local VAT numbers when reaching the turnover limit. Please mind that similar requirements apply for Norwegian companies and branch offices of overseas enterprises.
Do not hesitate to ask for our company formation services in Norway.
Compliance requirements for Norwegian branch offices in 2023
In 2023, branch offices registered in Norway must comply with various regulations imposed in this country. While the internal rules will be imposed by the parent company in the country of origin, it is important to note that here, the branch must have an independent management which must also include a Norwegian resident as a representative. It is possible to relocate an employee from the headquarter for whom a residence permit can be obtained.
From an accounting point of view at the level of 2023, the branch office in Norway must meet the requirements imposed by the local authorities. In order to avoid double taxation, a branch office will fall under the provisions of Norway’s double taxation agreements with countries with which such treaties have been signed.
When it comes to the taxation of a branch office, it will pay the corporate tax on the income it generates in Norway. This is one of the main important differences between it and a subsidiary which is treated as a domestic company.
Other requirements that need to be respected by the branch in Norway is that it must submit audited annual financial statements and VAT returns must be filed twice a month (if the business is registered for VAT in Norway).
Why set up a branch office in Norway
Norway is one of the most attractive foreign investment destinations in Europe thanks to its appealing business climate, as its economy relies on the money injected by overseas entrepreneurs and companies. Moreover, in 2020, Norway ranked 9th in the World Bank’s Doing Business Report.
From a foreign investments point of view:
- – Norway’s inflow of foreign direct investment (FDI) in 2019 was 4.3 billion USD,
- – it is also one of the most important countries in Europe in terms of investment outflow with a total amount of 8 million USD in 2019,
- – more than 30% of foreign investments received by Norway come from Sweden and the Netherlands,
- – at the level of 2019, Norway’s total FDI stock was 167,475 million USD.
In contrast to predictions of 1.7% in 2023 and 2.0% in 2024, Norway’s Gross Domestic Product will expand by 0.9% this year and 1.4% the following year. Estimates for registered unemployment this year were increased from 1.7% to 1.9%, and they are now expected to reach 2.0% in 2024.
If you need to set up a branch office in Norway fast and easy, we invite you to contact our experts in company registration in Norway, who will take care of the entire registration procedure so that you can start your business activities in this country as fast as possible. Moreover, if you are interested in setting up branches in Japan, Hong-Kong or Singapore, we can put you in contact with our Asian partners.