Sole trader or limited company? Let's take a look at the most popular business forms in Norway, and which one might be best for you.
As a foreigner living in Norway, it can be tough navigating the bureaucracy needed to start a business. One of the first decisions you need to make in your business plan is what corporate form to register.
Here we outline the basic features of each, focusing on the main differences of personal rights and personal risk. For many entrepreneurs the choice will be obvious, but for some you may need to consult with an accountant and/or lawyer.
Enkeltpersonforetak (ENK)
Sole Proprietorship / Sole Trader. The single-person business is the cheapest and easiest form of business to start.
There is no need for payroll in order to pay yourself. The profits of the business are yours to do with as you wish, saving on bureaucracy. But you are not classed as an employee, whether you do all the work yourself or employ others.
This means you receive less sickness benefit and do not qualify for unemployment benefits should your business fail. Also, you must pay your tax liability in advance four times a year. This often causes cash-flow problems for new entrepreneurs, so be sure to fully understand this process before starting a sole proprietorship.
The law draws no distinction between your business and you as a person, so you are personally liable for all actions of the business, including all debts. It's inadvisable to choose this form for a business involving a lot of risk.
Cost: free to register, unless you are buying and selling goods, in which case the fees are 2265 NOK (online) or 2832 NOK (paper form)
Advantages: simple to understand, free to register, perfectly suitable for many small businesses and freelancers, no requirement to submit accounts or employ an auditor.
Disadvantages: full personal liability, tax payments in advance, may struggle to get credit, bigger customers may prefer to deal with limited companies
Ansvarlig Selskap (ANS/DA)
General Partnership: A less common form but suitable for some circumstances. The General Partnership is similar to a sole proprietorship, with ownership shared by two or more people. Partners cannot be employed in the business so retain the “self-employed” characteristics of the sole proprietorship, however there are more formalities.
There are two forms of general partnership, ANS and DA. The key difference is liability. Within an ANS, each partner is jointly liable and can be pursued for all debts of the partnership, whereas within a DA, each partner is liable only for the percentage agreed upon in a partnership agreement.
Cost: 2265 NOK (online) or 2832 NOK (paper form)
Advantages: cheaper and easier than a limited liability company if your business has low risk
Disadvantages: personal liability, tax payments in advance, may struggle to get credit, bigger customers may prefer to deal with limited companies
Aksjeselskap (AS)
Private Limited Liability Company: A common form of business around the world, a limited liability company is a separate legal entity from its owners, thus limiting their personal liability. It can be owned by one or more people (shareholders) and the entity can own shares in other companies.
Shareholders can employ themselves in the business, making an AS suitable for a small business with high risk, or where the owner wants to increase social benefits.
The main disadvantages of forming an AS are the cost and bureaucracy. In addition to the registration fee, a minimum of 30,000 NOK in share capital is required which must be paid up front (in cash or assets) – the price of limited liability. The business requires a board of directors, and several formal documents are required. An auditor is required, but only if the business has a turnover of above 5 million NOK.
Setting up a limited company is a serious business and it's highly advisable to employ the services of an accountant to advise you on formation at the very least.
Cost: Registration is 5,666 NOK (online) or 6,797 NOK (paper form), but a minimum share capital of 30,000 NOK is also required.
Advantages: limited liability for the owners, a respected form of company, possibility of credit, possible tax advantages
Disadvantages: more expensive to setup and run, more statutory reporting, an accountant is highly advisable
Norskregistrert utenlandsk foretak (NUF)
Norwegian Registered Foreign Company: A Norwegian branch of a foreign company. The branch is given a Norwegian company number but there is no separate legal entity created, so the foreign headquarters has the legal responsibility.
The NUF form gained popularity in Norway due to the EU Freedom of Establishment rules. Many entrepreneurs set up a foreign company somewhere with low startup requirements (usually the UK) and formed a NUF to trade in Norway on the same terms as a Norwegian AS. The principal benefit of this was avoiding the requirement for significant startup capital and the need for an auditor.
In 2012, the Norwegian Government relaxed the requirements of AS formation, lowering the share capital required from 100,000 NOK to 30,000 NOK and removing the need for an annual auditor for smaller businesses. This has drastically reduced the number of NUF registrations.
However, the NUF remains a viable proposition for a foreign company to do business in Norway.
Cost: Registering the NUF in Norway costs 2,265 NOK (online) or 2,832 NOK (paper form), but bear in mind the cost of the foreign requirements too.
Advantages: All the advantages of an AS for a lower cost.
Disadvantages: The foreign company remains the legal entity, with all the reporting responsibility in the home country. Certain banks are rumoured to look unfavourably on NUF applications for credit.
When you have decided which form to register, you start the process online with Brønnøysundregistrene. The Norwegian Business Register in Brønnøysund coordinates all business registration work.
Hello David,
I came across your website, which provides a lot of accurate information regarding opening a business in Norway. I’m currently in Norway and would like to open a sole proprietorship, do you happen to know if I’m required to provide not only a business plan but balance sheets regarding future costs and incomes, as business enterprises do? Are sole proprietorship also required to give such information or are they exempt from it?
Best Regards,
Thanks for having such a great site.
Alberto
Hi Alberto, to register a sole proprietorship you just fill in the form, simple. You should be able to open a bank account easily if you already have a personal account here. I’m with DNB and they linked it to my personal account so I have just one internet login. Although it’s easy to register, you should familiarise yourself with the business legislation, particularly the accounting requirements. Of course, if you want any kind of funding, or a bank credit facility, you’ll need a full business plan. Good luck!
Dear sir, Im living in norway. But i like to do business in norway, is there any possibilities ? My uncle stays there in bergen, hordaland for about more than 35 years, but i wanted to do it without his knowledge… Kindly guide me sir 🙂
Then how can a person from india start business in norway ? Is it possible ?
God dag!
I was just wondering, can you tell me which four months of the year do you have to pay your tax liabilities for a sole proprietorship.
In addition, the business I am hoping to establish will be providing digital designs to partners in China, as I work as a freelance designer. Would I be liable for the (Faktura of 2265 Nok)? Furthermore, how much would it cost to have an acountant take care of my accountants? Just an estimate, as I know it depends on many variables..
Tusen takk!
Thank you, David! All the best!
Hello David,
I came across your website and I am planning to start a company (sole proprietorship) in Norway.
Do you know how much money you need to have in your bank account if you are from an EU country?
Kind Regards,
Wieke
Hi Wieke, sorry do you mean how much money you will need for living expenses?
Dear David
i would like to state that i am a business man we have established business in Dubai U.A.E Visited Norway first time i liked the country ,people,economy , retail and whole sale market i wish to establish the business in Norway with my Norwegian friend would please help us how we establish General partnerships (ANS/DA) ,as you mentioned we need to submit doc online please give us link
Hi Mohammad, the link is http://www.brreg.no/english
Thanks a lot David
Hello David!
Thanks a lot for your explanation, specially useful for foreigners.
I already registered as a sole proprietorship and I received (today) a Faktura of 2265 NOK. I guess this is in charge of the concept of “selling and buying goods”.
What I don’t understand is the concept itself. My company (me) is a cultural event organizers. We are not liable to declare VAT. However, I will pay for some rents of venues, hotels accommodation, workshops conductors, etc. On the other hand, I will sell (to the participants of the event) the whole package as one product.
Should I understand that they are charging me the right concept?
Thank you for your advices!
Pablo
The fee is just the registration fee for starting a business, it’s the same for any sole peoprietorship.
Hi,
I found very useful information on your website regarding registration of business. In my case, I have a resident permit of 3 years as skilled worker and working in IT department of a Distribution Company. I am willing to start an online webshop but I have few questions in my mind
1- Could I start Sole Proprietorship firm when i am also employee of other firm?
2- Do I need to open a separate bank account or I can use my salaried account? does it have any legal complications if I start receiving payments?
3- Can I use my residence address as a business address?
Kind Regards
Yasir
1 – Yes but check your employment contract and also the terms of your residence permit.
2 – You don’t have to have a separate account but it’s strongly advised, to make your accounting far easier. Please note the statutory bookkeeping requirements.
3 – Again yes but check with your landlord.
Hello David,
Thanks for your useful article! I will be starting as a freelance (economic research) soon and I am in the process of setting up a ENK (sole proprietorship). My question is similar to a question already posted above, but I would like to have more details. Basically, as far as I understood it is free of charge to register with the Central Coordinating Register for Legal Entities, an also compulsory. It seems that it is not comppulsory to register with the Register of Business Enterprises, and that registartion would come at a cost. Is this correct? In which case, what would be the advantage of registering with the Register of Business Enterprises?
Many thanks!
Magali
Hi David
Thanks for your kind information. I open a sole propietorship cleaning company last month and on 3rd October I got and started my first job. At the tax office, should I inform them about my expected income for the rest of the year or monthly income?.
Also, I am an employee and it’s alright for my employer that I have run my company.
Hi,
i wonder if you could give me na insite on the following:
we may probably have work in Norway for at least a year.
we are from Portugal and i really need to know how much it would cost to register the company in Norwary and who i should contact.
Do the taxes also have to be paid in Norway?
Many Thanks
Cristina
Hi David,
Great article as I have been struggling to find information on how to set up a business in Norway.
I am think this might apply to me as I am looking at building upon my current cooking website and wanting to expand in the first stage with having adverts to generate some income that way, though I am sure it won’t be much to begin with. I was wondering if you registered yourself/this website as a sole business, is income made from your site easy to handle tax wise and what other advice you could give me.
Thanks! Jane.
Hi David,
These are great info and, by far, more understandable than any I got so far.
I wonder if you could suggest me the best way for me to move to Norway.
I’m currently living in the UK, but I’m working for a German company. Is an EMEA position with Home Office in the UK and HeadQuarter in Germany.
Right now, all my accountancy (NI and Taxes are paid in the UK, via UK accountant).
As my wife (Norwegian born) wishes to move back to Norway, and my job allows me to perform my duties anywhere around EU, which way should I follow to organise my taxation?
I was informed I would need to set up a NUF, would you agree?
Would you know how or whom to contact in order to get this sorted?
Thank You in advance for all your help, really appreciated!
V.
Hi David!
My research on how to start an online business in Norway stopped the day a friend gave me this website (www.lifeinnorway.net).
I’m not an European, I’m currently working in Italy but thinking of moving to Norway to start an online business. Must i have a Norwegian personal number before setting up a business in Norway?
Yes, but although you can set up a business it doesn’t give you a right of residence if you are not a citizen of an EU/EEA member state. I’d advise you to read up on immigration law if you are planning to move to Norway, rather than business law.
Hi David,
Thank you for the helpful information. My question relates to to Sole Proprietorship;
‘Also, you must pay your tax liability in advance four times a year. ‘
What if my business is not turning over much at all, is there a threshold whereby anything under that amount you are not tax liable?
Many thanks,
Hollie
Hi Hollie, the amount is based on your last year’s performance, if it’s the first year you estimate the turnover when you register the business so that figure is used.
Hi David,
I’m a freelance filmmaker in the UK who is about to start doing occasional jobs in Norway. How do I go about registering as a freelancer in Norway? Is it the same as self-employed? I was told this process could be done online. Also, as a permanent resident of the UK, I believe I’m right in saying I don’t need to pay Norwegian tax, just UK tax on my work abroad. Have I been told correctly?
Best Regards,
Scott
Hi Scott, it depends how you set yourself up. If you bill through your UK company and only do occasional work in Norway there shouldn’t be a problem. But you should look into VAT as you will likely be required to register and charge Norwegian VAT if you do the work here. I am no expert when it comes to this so I suggest contacting one – there may well be specific rules for art/film, for example.
Hello David,
Very useful and helpful info. Im thinking of starting an online shop for name brand clothing from the States. Opening up shop is not the problem but a question of pricing and licensing of goods.
Where can I find these regulations or find out what brands are not allowed to be sold without a license?
Regard,
Jim
Hei, David.
It was a bless to find your page-so simple and at the same time so informative 🙂
I would like to start solo proprietorship providing cleaning help to private houses.
•What documentation do I need to start it up? (My husband lives and works here many years, but I have moved here recently when we got married).
•When I get my first private house/clients, what would be the tax duties for them? The thing is, that I’ve heard that there is even “cheeper/easier” new business form then ENK for helping people with private home cleaning (family can hire cleaning help and pay low taxes if the payment for service is not higher then 10 k kr/year). Have you heard/read/anything about it?
Tusen takk for informasjon 🙂
Best regards,
Gabija
Hi David,
Coming across your page was the best thing of my business research so far. I’m considering about opening a lodging facility (small bungalows) in a touristic/camping area. Can you please help me find some information about the laws that regulate the hotel/accommodation sector in Norway? I’m interested about the requirements/standards such an enterprise.must comply with.
Thank You very much
John
Hi David! I am so tired to go from office to office where people really dont know how to help me to open my small company here in Norway, at this point I would be happy to delegate the paperwork to somebody reliable. Do you have any suggestion, or a number. Need to have knoledge about food production paperwork
Hello David,
I am a sri lankan citizen and im a permanent resident in greece. i would like to open an cleaning company in norway can you please tell me if i can open a company and what will be the procedure to open a cleaning company.
Thank you,
Lal
Hello David,
I am Polish citizen and I would like to open Sole Proprietorship in Norway for permanent make up. I need answers for some questions, please.
1- Does opening of the company give me resident card (legal staying)?
2- What if I own a company and in the same time work for any beauty salon as employee. Is it possible and completely legal?
3- What if the business is not going as I want and I want to close my company? Is there any minimum of the time for a company? Can I close it any time or there is any law about it?
Thank you very much,
Ola.
Hi! I am not an expert, but here’s my opinion: 1) Check http://www.udi.no for residence requirements, 2) there’s no law preventing this but your employer may prohibit it in your employment contract, 3) There’s no minimum time but it’s an expensive process and you have to ensure all taxes are paid, of course. Good luck!
Thank you very much 🙂
Dear David,
I am from India and would like to start my business activities in Norway by selecting Sole Proprietorship or General Partnership business form. I have previous experience of running business in India. Would like to know if I am eligible to start my business by establishing Sole Proprietorship or General Partnership as an Indian.
Kindly respond. Kind regards,
Hi I am a eu citizen planning to open the online business in norway with the norweigian address. I have married an Asian guy as we both are planning to move to norway. Is it possible my husband can register at the same time and start working there ?how long the procedure will take time?
Thanks for your time
Kind regards
Lious
Hi David
I found your information is really helpful and had also subscribe my email to read some articles from your. Will the online buisness can be registered as a self employed in norway by eu citizen? Is it possible to bring dependent in the same time? However, the process seems confusing for me. If you know some information please share with us.
Thanks
Lious
Hi David
I found your information is really helpful and had also subscribe my email to read some articles from your. There is some question in my mind. Will the online buisness can be registered as a self employed in norway by eu citizen? Is it possible to bring dependent in the same time? However, the process seems confusing for me. If you know some information please share with us.
Thanks
Lious
Hi!
I have a 1year residence permit as a university student in norway and I have received my ID-number,so I’m confused that can I use my study residence permit to register a self employed company in Norway? please help me.
thank you so much
Hello David,great article.
But there is some thing I couldn’t understand as its written a bit different.
While in an as (llc) company I can employ my self.
When I read in emigration lows it is written that I can’t open this kind of company.
The question is I am Italian citizen.
I want to move to Norway starting my business (Private Limited Liability Company).
Working as an employees in the company.
Can I?
Yes. You can only register as self-employed by starting a sole proprietorship, if you are employing yourself in your own limited company then you must register as an employee.
David….once foreigner be a sole prop in Norway….can we apply for residence permit?
If am in Malaysia, is that necessary fly to Norway for sole prop registration? Or can thru internet form? Can you share me a link?
Hi, yes I know non-Europeans who have run a solo business and managed to get a work permit, but it is not easy and each case is evaluated individually. Everyone I know who has successfully done it has used the services of an immigration lawyer.
Takk skal du ha David
Hei David!
What a great information you have. I am
just wondering if i want to open an online business selling goods, where do i need to register? or do
you have a link on where i can read more about the laws on opening your own business?
Thank you!
Happy new year!
Hi Beth, you register a business with Brønnøysundregistrene at brreg.no
hi. do you have a official link for everything about setting up “Private Limited Liability” company?Thank you in advance.
Hello David,
Hope this message finds you well.
My husband, an Indian National has set up his business in Norway.
Myself, an Indian national wants to join him in Norway.
What would be the processing time (roughly) if I apply from India to reunite with him?
Regards,
Kim
I want to open firm But my question is that how much i wil pay tax and Can i give work to other people If i run enklepersonforetak?