When opening a company in Norway through a franchise the investors will have to choose a legal entity under which their business will operate. In this particular case, the most suitable business forms are represented by partnerships and private or public limited liability companies. However, in practice, most of the Norwegian franchises are registered as public or limited liability companies and our team of consultants in company registration in Norway can assist with advice on the registration of one of these business forms.
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What is the tax system applicable to Norwegian franchises?
In terms of taxation, a Norwegian franchise will be taxed depending on the legal entity that was chosen for company formation in Norway. In the case of franchises operating here that are not tax residents of Norway, the taxation system will be applicable only for the income obtained from commercial activities developed on the local market. As a general rule, the following will apply:
- • taxation of profits obtained from business activities – as a foreign entity, the franchise will be entitled to benefit from the provisions of the double tax treaties signed here;
- • taxation of income deriving from immovable or movable property – the tax rate applicable in this case is of 24%;
- • taxation of employment – the taxation of the company’s employees is applied on a progressive base and it can increase up to a tax rate of 46,7%;
- • value added tax (VAT) – the VAT in Norway stands at a standard rate of 25%.
Types of franchise agreements in Norway
In order to start a Norwegian franchising business, it is necessary to sign a franchise agreement and in this country, there are several types of contracts, which can be detailed by our team of specialists in company formation in Norway. Investors can choose between distribution agreements and service agreements.
As their name suggest, the service agreement is enforced when the franchisor provides services, while the distribution agreement is used for selling, through a franchisee, various products on a given market. Investors may also sign a production franchise agreement and we invite them to contact our team of representatives in company registration in Norway for more details concerning these types of agreements.