The first question an entrepreneur must answer is what type of company he can and wishes to register. Depending on the size of the entity, organization form and the minimum share capital, Norway recognizes two main forms of business: companies (with private or public limited liability) or partnerships (general or limited).
Foreign businessmen may also set up sole traders, which represent the simplest way to start a business in this country (available only for natural persons); foreign companies can expand their business activities in this country through branch offices or subsidiaries. Our team of consultants in company registration in Norway can offer information on the characteristics of each type of business form and may assist in choosing the most appropriate way to start a business here.
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What are sole proprietorships in Norway?
The sole trader (or sole proprietorship) is the most basic type of business form that can be registered under the commercial legislation in Norway. The entrepreneur is liable for the gains and losses. It may not be registered at the Central Coordinating Register for Legal Entities, if it doesn’t buy products for resale and has less than five employees, but it is advised to do that (it’s free anyway), in order to receive an organization number.
Many suppliers ask for this organization number. A sole proprietorship may be changed into a limited liability company if the required criteria are met. Our experts in company registration in Norway can help you change your business structure, if the initial business form selected for starting a company here no longer serves its purpose.
How can one register a Norwegian sole trader?
One of the main criteria for starting a sole trader in Norway is the minimum age requirement. The minimum age a person can have when starting a sole trader is 18 years, but it is important to know that Norway allows the registration of this type of entity for even younger persons, of 15 years old, in the situation in which the person’s legal guardian has provided a consent in this sense. At the same, a 15 years old person may start a sole trader if the County’s Governor provided an approval.
Foreigners are also allowed to open a sole trader in Norway, as there are no residency requirements, but it is necessary to have a business address that is registered in this country. Our team of specialists in company registration in Norway can offer in-depth information on the documents that have to be subscribed when starting a local sole trader.
What are private limited liability companies in Norway?
A private limited liability company in Norway, known as Aksjeselskap, is based on a share capital of NOK 100,000 (EUR 13,000). Its shareholders are liable for the losses and gains but only in the limit of their contributions. The shares of a private limited liability company in Norway cannot be transferable. It is the most common form a Norwegian small or medium business can take.
What are the taxes for Norwegian private limited liability companies?
When opening a company in Norway that operates as a limited liability company, the investors should be aware of the taxation system that is applicable in this case. Our team of consultants in company formation in Norway can assist with extensive advice on all the taxes that are due under this business form, but it is important to know that the following will apply:
- • the tax on the profits of the company is imposed at a rate of 23%, which needs to be paid in two installments in a financial year;
- • dividends paid to the company’s shareholders are liable for taxation and the tax rate is imposed at 30,59% of the respective sum;
- • the company is also liable to value added tax (VAT) and the registration for it is compulsory once the company had a yearly turnover of minimum NOK 50,000;
- • the standard VAT rate in Norway is of 25%, but depending on the products or services traded here, the company can qualify for lower VAT rates.
What are public limited liability companies in Norway?
The public limited liability company (Allmennaksjeselskap) in Norway is based on a higher share capital, with transferable shares unlike the private limited liability company. The minimum share capital required is NOK 1 million (EUR 370,000). The shareholders are liable for the debts ot the company in the limit of their contribution.
This type of business form can be registered by natural persons and legal entities; in the case of natural persons, the minimum requirement is to be at least 18 years old in order to participate as a founder of the company and have a designated role within the business. When opening this type of company, it is also compulsory to register a business address (a physical place for doing business), which is a necessary requirement for all types of businesses available in this country.
What are partnerships in Norway?
Partnerships are types of Norwegian companies that are based on company assembly signed by the owners and registered at the Register of Business Enterprises. This agreement must contain the following information: the name of the company, names and addresses of the liable partners, if there are capital investments, the role of the company and the address of the headquarters.
A main characteristic of the partnership is that it doesn’t require a minimum share capital. The general partnership (Ansvarlig selskap) registered in Norway must be formed by at least two active owners with unlimited liability for all the debts. The limited liability partnership (Delt ansvar) is formed by two or more partners with different statuses. There are the active partners with unlimited liability and the silent partners with limited liability according to their contribution.
What are the registration requirements for a Norwegian general partnership?
In order to register a general partnership in this country, it is necessary to draft and sign a partnership agreement. The contributions provided by each partner have to be mentioned in this founding document. In the case of persons who are foreign citizens interested in starting a general partnership in Norway, it is necessary to respect additional requirements.
For example, persons who are citizens outside the European Union (EU) and the European Economic Area (EEA), will need to obtain a residence permit in this country in order to engage in any business activity; our team of consultants can assist with advice on the main procedure for obtaining a residence document in this country.
What are branch offices in Norway?
A branch can be set up in Norway with no minimum share capital required. In order to open a company in Norway registered as a branch office, the representatives of the parent company are required to provide a set of documents, which are compulsory for the registration of any branch of a local or foreign company:
- • the certificate of registration of the parent company and a copy of the parent company’s certificate of good standing;
- • the memorandum of association and the articles of incorporation of the parent company;
- • the minute of the meeting when the decision of opening a branch office was taken;
- • the name of the person responsible for the Norwegian branch and the address of the branch headquarters.
In the case of foreign companies that want to open a branch office here, it is necessary to know that, although the branch office is a subordinated structure to its parent company, the office set up in Norway will need to follow the legislation applicable here. VAT registration in Norway for non-resident enterprises requires the appointment of a local tax agent. However, you can also choose whether or not to use a representative if you are from one of the EEA countries dealing in Norway. In his or her function, the agent has various duties in respect to VAT filing requirements.
Thus, a branch office of a foreign company will have to be registered with the Register of Business Enterprises in the situation in which it develops any commercial activities on the Norwegian territory. When opening this business structure, it is also necessary to pay a fee of NOK 2,832 to the above mentioned institution; however, when registering with the Central Coordinating Register for Legal Entities, the procedure will be free of charge. We also invite you to watch a video:
No matter the type of company chosen, investors should know that Norway is one of the most powerful countries in the world and has one of the most favorable environments for the development of a business. If you don’t know what type of company you should choose for your business in Norway, do not hesitate to contact our team of company formation agents in Norway.
Our agents will help you choose the right legal entity and we will handle the entire company registration procedure for you. In case you need guidance on choosing the most suitable type of company in Japan, Hong-Kong, Singapore or Регистрация компаний Норвегия, we can put you in contact with our partners.