Damalion Norway desk
Doing business in Norway
Officially known as the Kingdon of Norway, Norway is a Scandinavian country in the north of Europe. The country is known for its stunning natural beauty, high standard of living, and strong economy.
Norway has a stable business environment and it is an attractive destination for foreign investors. It also has a robust business climate, characterized by a stable economy and a skilled workforce.
Norway is welcoming of foreign investment and starting a business in the country is a straightforward process. The country has a highly educated and skilled workforce, high levels of transparency, low corruption, and a strong rule of law.
The country is known for its high levels of transparency, low corruption, and strong rule of law. In addition, Norway’s government actively encourages foreign investment, making it easy for businesses to set up operations in the country.
Overall, Norway is an excellent destination for businesses looking to expand their operations. The country has a stable business climate, a skilled workforce, and a well-developed infrastructure. Norway also offers many opportunities for businesses in various sectors, making it an attractive destination for foreign investment.
Advantages of Doing Business in Norway
- Norway has a stable and prosperous economy, with a high standard of living and a low unemployment rate. The country is known for its robust social welfare system, which ensures that its citizens enjoy a high quality of life.
- Norway has a highly educated and skilled workforce. The country also has a strong work ethic and a commitment to excellence, making it an attractive destination for businesses.
- Norway has a strong and reliable legal system, which provides a high level of protection for businesses. The country is also known for its low corruption and high levels of transparency.
- Norway is not a member of the European Union, but it is a member of the European Economic Area (EEA). This provides businesses with access to the European market, without the regulatory burdens of EU membership.
- The Norwegian government is supportive of business and actively encourages foreign investment. There are also several incentives and grants available for businesses that invest in research and development.
- The country’s commitment to renewable energy and sustainability also makes it an attractive destination for businesses that prioritize environmental responsibility.
The legal system in Norway is based on the civil law tradition, which is also known as the continental legal system. This system is primarily based on written laws and statutes, as opposed to common law systems which are based on court rulings and precedents.
The Norwegian legal system is divided into two main branches:
- the judiciary which includes the Supreme Court, the appellate courts, and the district courts,
- the executive branch which includes the government and the administration.
The Supreme Court is the highest in Norway, and it has the final say on all legal matters.
The Norwegian legal system is known for its transparency and its adherence to the rule of law. It is also known for its efficiency and accessibility.
Foreign investment in Norway
Foreign investment in Norway is generally welcomed and encouraged by the Norwegian government. The country has a stable and prosperous economy, and it offers a range of opportunities for foreign investors in various sectors.
Foreign investors can invest in Norway through various channels, including establishing a new business, acquiring an existing business, or investing in real estate. The Norwegian government does not impose any restrictions on foreign ownership, and foreign investors enjoy the same legal protections as domestic investors.
Norway is also a member of the European Economic Area (EEA), which provides foreign investors with access to the European market, without the regulatory burdens of EU membership.
Foreign investors are subject to the same legal and regulatory requirements as domestic investors. The Norwegian legal system is known for its transparency and adherence to the rule of law, which helps to provide a stable and predictable framework for foreign investors.
Overall, foreign investment in Norway is welcomed and supported by the Norwegian government.
Entity Choice in Norway
There are several business structures available for companies operating in Norway. The most common business structures are:
Sole proprietorship (Enkeltpersonforetak)
This is the simplest and most common type of business structure in Norway. It is owned and operated by a single person.
- There is no legal distinction between the owner and the business.
- It has a simple and low-cost to set up
- The owner is personally liable for the debts of the business
- Profits are taxed as personal income
Partnership (Ansvarlig selskap)
This is a Norwegian business structure in which two or more people own and operate the business together.
- It’s owned and operated by two or more people
- The partners share the profits and losses of the business
- Each partner is personally liable for the debts of the partnership
- The partnership must have a written partnership agreement
- Profits are taxed as personal income
Limited liability company (Aksjeselskap)
A limited liability company is a separate legal entity from its owners. The shareholders own the company, and their liability is limited to the amount of capital they have invested in the company.
- It must have at least one shareholder and a board of directors.
- It’s a separate legal entity from its owners
- Shareholders own the company
- The liability of shareholders is limited to the amount of capital they have invested in the company
- Profits are subject to corporate tax
Public limited company (Allmennaksjeselskap)
A public limited company is similar to a limited liability company, but it is subject to more extensive reporting and disclosure requirements.
- It must have at least two shareholders
- its shares can be traded on a stock exchange
- Its profits are subject to corporate tax
Branch office (Filial)
A branch office is a separate part of a foreign company that operates in Norway.
- The branch office is not a separate legal entity from the foreign company
- it is subject to the same rules and regulations as the parent company.
- It must appoint a legal representative in Norway
- Its profits are subject to corporate tax
When choosing a business structure in Norway, it is important to consider the legal and tax implications of each option. It is also important to consult with a professional to ensure that the chosen structure is appropriate for the company’s needs and goals. Contact your Damalion experts now and let us help.
Banking in Norway is well-developed and modern, with a range of services available to individuals and businesses. Norway has a highly developed financial sector, with several large commercial banks operating in the country. The country also has a banking system known for its high level of security and stability.
The main features of banking in Norway include:
The Norwegian banking sector is regulated by the Financial Supervisory Authority of Norway (Finanstilsynet). The authority oversees the activities of banks and other financial institutions to ensure they operate safely and soundly.
The central bank of Norway is called Norges Bank. It is responsible for maintaining price stability and promoting economic stability in the country. Norges Bank also oversees the banking system in Norway and provides liquidity to the financial markets.
Types of Banks Available in Norway
There are various types of banks in Norway, including commercial banks, savings banks, and online banks. Commercial banks are the largest and most prominent banks in Norway, offering a range of services including savings accounts, loans, mortgages, and credit cards. Savings banks are smaller, community-based banks that focus on savings accounts and personal loans. Online banks offer many of the same services as traditional banks, but with lower fees and higher interest rates.
Services Offered by Banks in Norway
Banks in Norway offer a range of services to both individuals and businesses, including savings accounts, checking accounts, credit cards, loans, mortgages, and investment services. Most banks also offer online and mobile banking services, making it easy for customers to manage their accounts and conduct transactions.
Opening a bank account in Norway
An individual interested in opening a bank account in Norway have to first choose a bank in Norway that suits his/her requirements, then choose the type of account he/she want to open.
The applicant then have to gather the necessary documents which include his/her Norwegian National Identity Number, D-number, passport, employment contract, lease/rental contract, and in some cases, a letter of recommendation from the applicants bank in his/her home country.
Once the applicant have all the necessary documents, they can apply for an account either online or in person at a branch, then wait for approval. Once the account is approved, it will need to be activated by depositing funds into the account.
Note that the specific requirements and procedures for opening a bank account in Norway may vary depending on the bank choosen and applicants circumstances.
In addition, foreign nationals can open a bank account before arriving in Norway, but it can only be a savings account. Foreign investor can also only open a savings account in Norway (there are conditions attached to this).
Overall, banking in Norway is modern, secure, and well-regulated, with a range of services available to meet the needs of individuals and businesses. Norwegian banks offer a high level of security and stability, making them an attractive option for customers looking to manage their finances.
A foreign national planning on moving to Norway, either for business or the pleasant lifestyle, for a period longer than three months, will require a Norway Residence Permit.
This Residence Permit enables the foreign national to reside and work in Norway, and also travel in and out of the country. It can also lead to citizenship.
Who require a resident permit in Norway
A citizen of EU/EEA countries do not require a residence permit to stay or work in Norway, but if the stay is to exceed three months, the applicant must register with the police.
On the other hand, if the applicant is a citizen of non-EU/EEA countries who wants to stay for more than 90 days, he/she will need a residence permit.
Types of Residence permit in Norway
There are a few options for obtaining residency in Norway and these include:
- Job seeker visa: this is for individuals who from outside the EU/EEA/EFTA countries. The individual can apply for a six-month job seeker visa to search for work in Norway. During this time, he/she is allowed to work and live in Norway while searching for a job. If the applicant find a job, he/she can then apply for a work permit.
- Skilled worker visa: this is for individuals who have a job offer from a Norwegian employer. This requires that the employer has completed the necessary paperwork and received approval from the Norwegian Labour and Welfare Administration.
- Student visa: this type of visa is for foreign nationals planning to study in Norway. This allows the applicant to stay in Norway for the duration of the studies and may also allow he/her to work part-time.
- Family immigration: this is for individuals have a family member who is a Norwegian citizen or permanent resident.
- Refugee or asylum seeker: a foreign national fleeing persecution or danger in his/her home country can apply for asylum in Norway.
Norway Permanent Residency and Citizenship
Norway permanent resident permit is the Permit a foreign national receive after they have lived in the country continuously for the last three years. Once this permit is obtained, the foreigner can then live and work in Norway indefinitely, and just renew the Residence Card every two years.
And after living in the country for a minimum of seven years out of the last ten years, he/she can apply for citizenship.
The application process for residency in Norway can be complex and time-consuming, so it is important to carefully research options and gather all necessary documents before applying. Contact your Damalion experts now and let us help.
The tax authorities in Norway are known as the Norwegian Tax Administration (Skatteetaten), which is responsible for collecting and managing taxes in Norway, in addition to providing guidance and support to taxpayers.
The Norwegian Tax Administration is divided into several departments, including:
- The Assessment Department which is responsible for assessing and calculating taxes for individuals and businesses
- The Collection Department which is responsible for collecting taxes and enforcing tax laws.
- The International Tax Department which is responsible for handling international tax issues, such as tax treaties.
- The Service Center which provides guidance and support to taxpayers.
In Norway, tax residency status is determined by a taxpayer physical presence and connections to the country. If the taxpayer spend more than 183 days in Norway in a calendar year or have a permanent home in Norway, they will be considered a tax resident of Norway.
As a tax resident of Norway, the taxpayer will be subject to Norwegian income tax on his/her worldwide income. And as a tax resident of Norway, the taxpayer will need to file an annual tax return with the Norwegian Tax Administration. The tax return will include information on the taxpayer income, deductions, and credits.
Types of taxes in Norway
- Income tax: the income tax is the largest source of revenue for the Norwegian government. The income tax rate in Norway varies based on taxpayers income level, with higher earners paying a higher percentage of their income in taxes. The tax rates range from 22% to 38.2%, depending on the taxpayer income level.
- Corporate tax: Norwegian resident company is subject to corporate income tax on its worldwide income. Non-resident companies are also liable for corporate income tax in Norway when engaged in a business that is either conducted in or managed from Norway. The corporate tax rate in Norway is 22%. However, companies may also be subject to additional municipal taxes that vary depending on the municipality in which they operate.
- Value-added tax (VAT): the standard VAT rate in Norway is 25%. Some goods and services, such as food and public transportation, have a reduced VAT rate of 15%.
- Wealth tax: Norway has a wealth tax of 0.85% on net wealth above NOK 1.5 million for individuals and NOK 3 million for couples. This tax is based on the total value of the taxpayer assets, including property, savings, investments, and other valuables.
- Property tax: there is also a property tax in Norway, which is levied at a rate of 0.7% of the assessed value of the property.
- Inheritance and gift tax: inheritance and gift taxes in Norway are based on the value of the gift or inheritance and the relationship between the giver and receiver. The tax rates range from 0% to 15.4%.
Norway has a progressive tax system, which means that those with higher incomes pay a higher percentage of their income in taxes.
Tax treaties in Norway
Norway has entered into tax treaties, also known as double taxation agreements, with many countries around the world to prevent double taxation of income earned in both countries. These treaties aim to ensure that individuals and businesses are not taxed twice on the same income.
The tax treaties generally provide rules for how each country will tax different types of income, such as dividends, interest, and royalties. They also typically include provisions for resolving disputes and exchanging information between tax authorities.
Norway’s tax treaties generally follow the model tax treaty developed by the Organization for Economic Cooperation and Development (OECD). This model tax treaty serves as a template for negotiating tax treaties between countries.
Some of the key countries with which Norway has tax treaties include the United States, the United Kingdom, Germany, France, China, and Japan.
Norway values intellectual property (IP) so it is protected under the country’s national laws and international agreements.
Norway is also a party to several international agreements related to intellectual property, including WIPO (World Intellectual Property Organization) and TRIPS (Agreement on Trade-Related Aspects of Intellectual Property Rights) under the World Trade Organization (WTO).
In Norway, there are several types of intellectual property protection available to individuals and businesses. Some of the main types of intellectual property in Norway are:
- A patent provides exclusive rights to use and commercialize an invention for a limited period of time.
- In Norway, patents are granted by the Norwegian Industrial Property Office (NIPO)
- Patents must meet certain criteria, including novelty, inventiveness, and industrial applicability.
- A patent typically lasts for 20 years from the date of filing.
- A trademark is a distinctive sign that identifies and distinguishes the goods or services of one party from those of others.
- A trademark can consist of words, logos, or other symbols.
- In Norway, trademarks are registered with the Norwegian Industrial Property Office (NIPO)
- A trademark registration typically lasts for 10 years and can be renewed indefinitely.
- Copyright law in Norway is overseen by the Copyright Act (åndsverkloven)
- Copyright in Norway protects the original works of authors and creators, including literary, artistic, and scientific works.
- Copyright protection is automatic and does not require registration.
- The Copyright Act provides exclusive rights to the author or creator, including the right to reproduce, distribute, and display their work.
- A design refers to the appearance of a product or part of a product, including its shape, color, and texture.
- A design must be new and have individual character.
- A design registration provides the holder with exclusive rights to use a specific design for a limited period of time.
- In Norway, designs can be registered with the Norwegian Industrial Property Office (NIPO).
- A design registration typically lasts for 5 years and can be renewed for up to a total of 25 years.
- Trade secrets refer to confidential business information and know-how that gives a company a competitive advantage.
- In Norway, trade secrets are protected under the Norwegian Trade Secrets Act, which provides legal remedies for companies that have had their trade secrets misappropriated.
- Companies can take legal action against those who use or disclose their trade secrets without authorization.
It’s important to understand the specific requirements and regulations for each type of IP protection to ensure that your IP is properly protected. It’s also important to consult with a professional for guidance on the registration, enforcement, and licensing of your IP assets. Contact your Damalion experts now and let us help.
LABOR AND EMPLOYMENT
Labor and employment law in Norway is regulated by several laws, including the Working Environment Act and the Holidays Act. These laws provide a framework for the employment relationship and set minimum standards for working conditions, wages, and benefits.
The main features of labor and employment law in Norway include:
Employment Contracts in Norway
Employment contracts in Norway are regulated by the Working Environment Act and must comply with the minimum standards set out in this law.
Employment contracts in Norway must be in writing, and both the employer and employee must sign them. The employment contract must also specify the working hours, the employee’s entitlement to vacation days, and the notice period required for termination by both the employer and employee.
In Norway, there are two main types of employment contracts: permanent contracts and fixed-term contracts. Here’s an overview of each:
- Permanent contracts: these are the most common type of employment contract in Norway. These contracts have no set end date and typically continue until either the employer or employee terminates the contract. Permanent employees are entitled to the full range of employment rights and benefits.
- Fixed-term contracts: these contracts have a set end date, which can be based on a specific project or a temporary need for additional staff. These contracts can be renewed if both the employer and employee agree to do so. Employees on fixed-term contracts are entitled to the same rights and benefits as permanent employees, with a few exceptions.
Employment Compensation, entitlements, and Benefits in Norway
- Working hours: the standard working hours in Norway are 37.5 hours per week, and overtime work is generally limited to 10 hours per week. Employers are required to provide breaks and rest periods, and employees have the right to refuse to work overtime in certain circumstances.
- Wages: employers in Norway must pay employees at least the minimum wage set by the government.
- Paid holidays: Norwegian employees are entitled to a minimum of 25 days of paid vacation per year, in addition to 10 public holidays.
- Sick pay: employees who are unable to work due to illness or injury are entitled to sick pay from their employer for up to 16 days per year. After this period, employees can receive sick pay from the National Insurance Scheme.
- Parental leave: new parents in Norway are entitled to a combined total of 49 weeks of paid parental leave, which can be shared between the mother and father.
- Maternity and paternity benefits: pregnant women are entitled to 100% of their salary for up to 16 weeks before and after the birth of their child. Fathers are entitled to up to two weeks of paternity leave with full pay.
- Pension: most employees in Norway are covered by a mandatory occupational pension scheme, which is funded jointly by the employer and employee.
- Health insurance: all Norwegian citizens and residents are entitled to free public healthcare, which is funded through taxes. Employers may also offer private health insurance as an employment benefit.
- Unemployment benefits: if an employee loses their job through no fault of their own, they are entitled to unemployment benefits from the National Insurance Scheme.
In Norway, employers can only terminate an employment contract for a valid reason, such as poor performance or redundancy. Employees who are terminated without a valid reason may be entitled to compensation. Employees also have the right to resign from their job with notice, and in some cases, without notice.
Overall, labor and employment law in Norway is designed to protect the rights of employees and ensure fair working conditions. Employers are required to comply with these laws and regulations to avoid legal consequences and maintain a positive work environment.
So, are you thinking of entering the Norwegian market?
Damalion is an independent consulting firm that assists foreign legal entities in setting up a business anywhere in the world including Norway. In addition to helping clients build a company, we also provide various integral business solutions, including compliance, entity management, accounting, taxation, payroll support, and many more across the world.
If you wish to learn more about our services and how we can assist you in making your Norwegian company a success, contact your Damalion experts today.
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