Foreign companies venturing into business in Norway will inevitably face Norwegian compliance, formalities, and reporting obligations. To assist you on your journey, we present nine key steps you should know before starting a business in Norway as a foreigner. The nine steps outlined here will assist you in ensuring compliance with Norwegian formalities and fulfilling reporting obligations.
Step 1
Register your company with the Norwegian company register
To conduct and start a business in Norway, it is mandatory to register with the Brønnøysund Register Centre. Upon registration, your company will be issued a business register number. This number is crucial for fulfilling your company's reporting obligations when doing business in Norway.
Also read: Register a company in Norway
Step 2
Register your company in the Value Added Tax register in Norway
If your company's Norwegian turnover surpasses NOK 50,000 within a 12-month period, there is no reason to wait with the Value Added Tax (VAT) registration. By registering your business in the VAT register, you unlock the opportunity for reimbursement of input VAT on your business-related purchases. Early registration not only ensures compliance, but also provides your company with a valuable liquidity advantage..
Also ready: Should your business register for VAT in Norway?
Guide: How to do business in Norway
Download guide to learn more.
Step 3
Avoid penalty charges
Reporting contract information regarding your Norwegian assignment to the Tax Authorities is not only a legal obligation, but also a proactive measurement to avoid uneccessary penalty charges. If you fail to report accurately you may risk financial penalties. By staying compliant and submitting required information on time, you'll avoid the risk of penalties.
Also read: Business in Norway - Avoid sanctions and penalty charges
Step 4
Analyze and understand the contract with your Norwegian client
Analyzing and understanding the terms of your contract with your Norwegian client is essential for navigating the differences between types of agreements, particularly distinguishing between "genuine subcontracts" and "hired labor contracts". Understanding the differences ensures compliance with tax regulations and determines the taxability of your company and the workers involved. If you fail to understand these differences, you may risk potential tax liabilities and legal implications.
A genuine subcontract typically involves product and result responsibilities, while a hired labor contract typically entails providing services without such responsibilites.
Also read: Help with contracts
Step 5
Make sure your employees undergo ID-checks
Making sure your employees carry out ID-checks is fundamental for compliance and security reasons. Proper identification verification ensures both adherence to regulatory standards as well as serving as protection against unauthorized access at your workplace. Employees must bring their passport to their appointment. Remember to book the appointments.
Also read: ID control for foreign employees in Norway
Step 6
Check to see if your employees require an HSE card
When your employees work on a construction site, it's imperative that they possess and carry an HSE card. This card signifies that they've undergone essential training in health, safety, and environmental practices, ensuring compliance with safety regulations and fostering a secure work environment.
Also read: ID cards for building and construction sites in Norway
Step 7
Do your employees require an A1-form?
If your workers are engaged in temporary work in Norway, the answer is likely yes. The A1 form validates their membership in their home country's Social Security Scheme, which typically exempts both the company and the workers from Social Security Contributions in Norway.
Also read: Norwegian National Insurance Scheme
Step 8
Are your employees subject to advance tax deduction?
Your employees don't need to be subject to advance tax deduction in two countries simultaneously. In Norway, it's possible to request an exemption when it's likely that the workers will not be liable for Norwegian taxes.
To apply for an exemption, your employees must provide documentation such as proof of residency, employment contracts, and other relevant information. It's crucial to complete the application process with the Norwegian tax authorities diligently. We strongly advise consulting with a tax advisor or legal professional to ensure the application is accurate and meets all requirements.
Also read: Taxes in Norway - employee taxation
Step 9
Is your company liable for an exemption from filing a Norwegian Corporate tax return?
Initially, companies were required to file a Norwegian Corporate tax return, even if they weren't subject to Norwegian taxation. However, as of January 1, 2022, companies without a permanent establishment in Norway can apply for an exemption.
As a general rule, workers are also obligated to file a Norwegian tax return, unless they fall under the new PAYE scheme implemented on January 1, 2019. Under this scheme, workers may opt for a flat tax rate of 25 percent (or 17 percent if they've filed an A1 form). If they choose this option, taxes are deducted through salary reporting, eliminating the need for a separate tax return.
Still want to start a company in Norway?
Navigating Norwegian compliance may seem daunting, and perhaps you ask yourself "why do business in Norway?" Doing business in Norway is complex, but it's not impossible. There are numerous possibilities to help you get started on your Norwegian venture. We advise seeking guidance and support from legal professionals experienced in Norwegian business operations, well-versed in the intricacies of starting a company in Norway.
If you want to get more details on how to start your business in Norway, download our guide.
Guide: How to do business in Norway
Download guide to learn more.
Article first published 23 October 2018 - Latest update June 2022.
