Safe haven for foreign businesses – How to establish a branch of your company in Norway

Norway is often the runner-up or winner in various “the best country for” competitions. It is one of the richest countries in Europe and definitely one of the most innovative ones but is Norway really the best country to conduct business activities in?

 

SAFE AND PREDICTABLE

Norwegians are well known for planning and they love strategies. The stable economy based on thorough planning is one of the most predictable in Europe. You might not know that Norway has never been a part of the EU, however, it is a member of the European Economic Area. That allows companies from other EEA countries to be a part of the still growing market.

 

KEY STEPS TO STARTING A BRANCH IN NORWAY

If your company is located in an EU country, sales of goods to Norway do not involve any registration therein. If you wish to enter a contract for providing services to a Norwegian client that will take place in Norway, you need to be well prepared and remember certain rules:

1. Register your activity. All companies posting their employees to Norway are required to establish a Norwegian Branch of their company, a so-called NUF (Norwegian Registered Foreign Business). Find out more about this form of business here: https://www.altinn.no/en/start-and-run-business/planning-starting/registration-of-the-enterprise/starting-a-norwegian-branch-of-a-foreign-company-nuf/
2. Your employees are also required to be registered with the Norwegian Tax Office (Skatteetaten) and go through an ID control at a designated tax office.
3. VAT – Registration: not all companies are required to be registered on the Norwegian VAT Register (MVA-Registeret). Those who sell services and issue a sales document exceeding NOK 50 000 most certainly will have to go through the registration. Other registrations are also necessary (i.e. contract registration with the tax authorities and more)
4. Make sure to analyse the contract with your client prior to registration. Hiring out labour vs. services contracts requires different registrations and has different consequences for tax liability for the company and its employees.
5. Social security contributions for your employees can be paid in the country of origin. As a company, you are required to provide Norwegian authorities with an A1 form from your social security institution.
6. Branches of foreign companies are required to send a Norwegian Corporate Tax Report the year following their activity in Norway.
7. Read a Convention on Avoidance of Double Taxation between Norway and the country your company is established in. Its stipulations have a major impact on the tax liability of the company and its employees.
8. Find out what other registrations are required for companies in your industry (e.g. HSE- cards for construction workers)

If you have questions concerning any of these subjects, please contact Novum: office@novum.no

 

BACK TO BREXIT

The above mentioned rules will differ slightly for British companies after Brexit, mainly in terms of employees. British citizens posted to work in Norway are required to go through more procedures than EU citizens. One of the conditions is to obtain a work permit, which may be a long process. It is always good to contact a local Norwegian authorized accountant in order to find out what other obligations might be relevant.

 

Follow our blog entries in order to read more about how to prepare your company for a contract in Norway. We will also provide more information on how to incorporate a Norwegian LLC (Aksjeselskap, AS).