Norway Subsidiary Entity Set Up
Norway Entity Set Up
Expanding overseas is a major step. It is easy to stumble while chasing two objectives – advancing your company at home while crossing the world into a new territory, maybe thousands of miles overseas.
Although strictly regulated, Norway welcomes foreign investment and ranks 23rd among the world’s freest economies. The most recent World Bank report ranked Norway 25th out of 190 nations for ease of starting a business, third for enforcing contracts, 15th for registering property and 22nd for trading across borders.
At Bradford Jacobs, we believe this adventure should be exciting instead of frustrating and time-consuming. You can bypass this process and utilize our Professional Employer Organization (PEO) and Employer of Record (EOR) frameworks to locate the finest local talent and administer your payroll in Norway – speedily and risk free. Your company will be up-and-running in days rather than weeks or even months.
How to set up a Norwegian Subsidiary
Setting up a subsidiary in Norway? Most international corporations will choose between a private limited liability company, known as an ‘aksjeselskap’ (AS), or a branch. The advantage of a subsidiary is that it operates as a legal entity entirely independently of the parent organization and is incorporated in Norway as a local company. Various documents and procedures must be completed to set up the subsidiary. These include:
- Decide on company type, with the typical choice being a private limited liability company, ‘aksjeselskap’ (AS). The company has the abbreviation AS before or after its name
- Begin registration process through the Brønnøysund Register Center
- Open a bank account and deposit share capital – a minimum of NOK 30,000 (€2,887, US$3,266)
- Obtain bank’s ‘deed of deposit’ after outside auditor confirms the balance in the account
- Complete the ‘Foundation of a private limited company’ form
- Employers must be registered on the Central Coordinating Register for Legal Entities, to receive a unique organization number
- Log necessary documents with the Norwegian Register of Business Enterprises online (fee NOK 5,570, €536, US$606) or via post (fee NOK 6,797, €654, US$740)
- Register for Value Added Tax (VAT) if annual turnover is expected to exceed NOK 50,000 (€4,811, US$5,433)
- Register for mandatory workers’ injury insurance and occupational pension plan
- Register with the Tax Administration and the Labor and Welfare Administration (NAV) to remit deductions for tax and social insurance
- The Register for Business Enterprises must be notified no later than three months after the company is founded, or the process will be cancelled and need re-starting
Benefits of setting up a Subsidiary in Norway
- Specific advantages for a foreign company opening a subsidiary in Norway include not being responsible for the subsidiary’s debts or liabilities. Also, the foreign parent company’s financial statements and accounts do not need to be presented to Norwegian authorities.
- The subsidiary can operate under a different company name and can pursue separate business interests. It operates under Norwegian corporate law in the same way as local companies and is taxed on its worldwide income and liable for 22% Corporate Tax on business profits. Some companies in the financial sector pay tax at 25%. The liability of the subsidiary’s shareholders is limited to their investment in shares.
- Through its subsidiary, the parent company has the advantage of exploring the Norwegian market and further afield among other Nordic nations and into Europe. Although Norway is not in the European Union, its membership of the European Economic Area makes it a key player in Europe’s single market.
- Other benefits of a subsidiary:
- Easier to obtain regulatory approvals, loans and finance and enter into contracts with other Norwegian and European companies
- More impact with clients and suppliers, as subsidiaries imply more permanency than branches
- Employees feel there is more stability and job security than from being with a branch
- In the wider commercial sense opening a subsidiary makes a statement of a company’s commitment to expanding into foreign markets, in this case the opportunities offered by the European economy.
- However, there is a more straightforward option to the risks and costs of setting up a subsidiary in Norway.