If you want to know what rules apply in the formation of a sole proprietorship in Norway, you can discuss in detail with our consultants in company formation in Norway. They can help you register your enterprise with the local authorities.
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Legal requirements for the opening of a sole proprietorship in Norway
A sole proprietorship in Norway represents the simplest business form in this country. This legal structure can be opened only by one person who is personally liable for all the liabilities and obligations of his/her business. The owner has the entire decision-making power in his enterprise.
Although there is no specific legal act regulating the activity of a sole proprietorship, there are certain legal requirements that a founder needs to respect, which can be found in the Company Act in this country. The owner of the sole proprietorship must be at least 18 years old and must be able to provide for the company and have an address in Norway. Since the business has no separate liability from the owner, the revenues of the sole proprietorship will be taxed along with the total income of the person.
An investor in Norway who intends to establish a sole proprietorship can hire personnel according to the Employment Law in this country. The owner can register his company with the Central Coordinating Register for Legal Entities, free of charge, and he will obtain an organization number.
For more than five employees, the owner has the obligation to register the company also with the Register of Business Enterprises under the specific tax. Our specialists in company registration can handle the registration procedure with the two authorities mentioned above. They can also help you set up a company in Norway.
Documents required to register a sole proprietorship in Norway
Here are the papers and forms you need to supply in order to operate as a sole trader in Norway:
- the national ID number (for foreign citizens, a residence permit and the D number are required);
- proof of a local address (you can also use a virtual office);
- documents attesting to your age (ID/residence permit, as it is possible to work as a sole trader for children aged 15 to 17, provided the application is submitted by a parent or legal guardian);
- a brief description of the activities you will complete;
- the BR1025 application form.
Foreign applicants who do not have the D number for tax registration can file the application form at the same time as the registration documents for the sole proprietorship. They can also rely on our Norwegian company formation specialists for support in gathering all documents and filing them together. This way, our clients can start their activities as soon as possible.
An advantage of having such a business in Norway is that you can run it from abroad and hire local employees to carry out its activities.
Registration authorities
One of the most important aspects related to opening a sole trader in Norway is that, depending on the operations to complete, an applicant may be required to register with:
- the Registrar of Business Enterprises (the Companies Register);
- the Central Coordinating Register for Legal Entities.
As a general rule, a sole proprietor must register with the second authority, while the other one is optional. The requirement to be entered in the Trade Registry’s record arises if the trader will work as an authorized accountant or auditor.
Our company formation agents in Norway can help you register with both institutions.
Trading name requirements for Norwegian sole traders
One of the characteristics of sole proprietorships in Norway refers to their trading names. The main condition to meet is to add the surname (the family name) along with other words that may contain it.
Our local advisors can guide on you on the name selection for your future business.
Other aspects of a sole proprietorship in Norway
If you conduct a business activity in Norway through a sole proprietorship, you need to be in evidence with the tax authorities. Therefore, you need to provide information on your revenues and losses during your first year of trade. You can also register your sole proprietorship in the value added tax register in order to be able to deduct VAT.
We can also guide on obtaining a tax and VAT number. VAT registration in Norway implies being assigned a unique number that needs to be stamped on all invoices issued by the company. Additionally, it can be used to register in the EORI system, which is connected to import and export activities. You may count on our Norwegian company formation officers if you need help with obtaining any of them.
If your sole proprietorship in Norway reaches 30 employees, then it will be subject to similar regulations as partnerships. The owner needs to provide several additional rights to the employees, such as representation in the company’s meetings, through which further decisions are taken in the development of the company.
Tax obligations for sole traders in Norway
Sole proprietors must register with the Tax Administration and pay taxes in Norway, just like any other business. However, they will be subject to the personal income tax. They are also liable for VAT. Here are also the rates they are subject to:
- the income tax is levied at rates ranging from 22% to 45%, depending on the earning bracket;
- the VAT applies at a 25% standard rate and 15% and 12% lower rates;
- social security contributions of 11.4% on the net income of the business.
Don’t hesitate to contact our Norwegian company formation firm for additional information on the registration of a sole proprietorship in Norway.