There are a number of things to remember when starting a company in Norway. Firstly, the services or products you want to sell should have a demand. It is of great significance to both the scale of the consumer community and the market rivalry. If you plan to start a company in a small town, familiarising yourself with established businesses that could operate in the same market is especially important.
In addition, several expenses may be incurred in relation to starting up a company, such as renting a workspace or buying required equipment. Therefore, during the startup process, a loan will always be raised to fund the venture. It is important to have a good business plan which includes a realistic budget when applying for a loan.
|Benefits of Doing Business in Norway||The Drawbacks of Doing Business in Norway|
|Easy Trademarks||Bribery and corruption|
|Easy Loans||Business disputes|
|The Responsible Workforce||The Terrorism|
Advantages of Doing Business in Norway
- Trademark Protection
Many companies wish to protect the trademarks, the name of the business, or technological inventions against the infringement of competitors. It might be prudent then to apply for the registration of trademarks. When selecting a company name, the names of other, related firms should be reviewed too.
A domain name for the business web site should also be acquired. One would want to apply for a patent for technological inventions. The General Data Protection Regulation ( GDPR) is also important to become acquainted with.
- Sole Proprietorship
If you create sole ownership, you will be legally responsible for the liabilities and responsibilities of your ownership. This is an unconditional obligation. The best way to set up a company is always a sole proprietorship, where an owner is a normal person. The business owner can not be working in the company but workers may be eligible.
A prerequisite for registering a sole proprietorship is that you conduct “business operation” In order for an operation to be known as a commercial activity, it must be of a certain length and have some scope.
- Limited Liability
To form a private limited company you must have at least NOK 30 000 share capital,-. The share capital will serve as collateral for the creditors of the company. A private limited partnership is known to be less risky than if you chose a sole proprietorship.
This is due to the limited liability, which is limited to the equity capital that you have invested in the corporation.
- Responsible Management
At least half the members of the board must be resident in Norway or another EEA country. One general assembly needs to be held once a year.
- Paid Sick Leaves
The business owner may be an employee of the company. That means you have equal rights as other staff members. If you’re registered as an owner and hired, from the first day you’ll get sick-pay with 100 percent coverage.
Without being an employee one may also work for the company. The payments would in this case take the form of dividends. Please note that on the dividends paid, including the sick-pay, you can not accrue social security benefits.
Disadvantages of Doing Business in Norway
- Lacks Metropolitan Area
Norway is a big country but it lacks internationally important metropolitan areas. This can be a real problem for the companies that want to develop themselves in the region.
Though the business is carried out in smaller towns, many workers prefer to live further outside the towns. It can be a struggle to transport to and from the job.
- Difficult Environment to Navigate
Norwegian business culture is based on the ideals of Norwegian (Scandinavian) work. An emphasis on equality is one of the prime values.
While doing business, you’ll experience little hierarchy, flat structures, and informal contact between. This environment may prove difficult to manage, depending on your company and its objectives.
- Not Easy to Find Quality Workforce
The social security tax in Norway is very high at a contribution rate of 14.1 percent for workers. Finding quality workers isn’t always easy, since the country’s small population has a historically low unemployment rate.
This leads to an ’employee’ market, providing high wages. It should also be attractive for companies operating in Norway to deliver a pension plan and to entice workers.
- Money Transfers
The amount of currency you can carry in and out of the country has limits. The total currently stands at 25,000 Norwegian kroner (about £2,500). At Customs any larger quantities have to be declared.
Exporting more than the specified currency cap from Norway must be authorized by Norwegian Customs in advance, and then transferred via a bank.
- Difficult to Register Business
Anyone doing business in Norway must register with Brønnøysund ‘s centralized registry. The company will obtain a Norwegian ID number, named an ‘organization number’ or ‘org.no.’
This number is mandatory for contracts, invoices, and other contacts with authorities and governmental organizations.
- Tax Registers
Although there is no formal corporate tax registration, the tax office at Brønnøysund has access to the register. Both companies are required to meet reporting responsibilities, and to file a tax return.
- Residence Permits for Outside Employees
Employees from a non-EU country who will be employed in Norway must receive a residency permit protecting the right of jobs.
There are various categories and foreign corporate employees will typically be listed as ‘qualified workers.’ Application for this permit must be approved before work can start in Norway.
- The challenge to Open a Bank Account
Any new business must have a bank account when establishing in Norway. There’s a KYC procedure to open a business bank account and several steps are required to check your business intentions. This process can take up to a month so preparing for this task is necessary.