Before you can hire employees or set up payroll in Norway, you’ll need to establish an entity or find a subsidiary alternative such as an employer of record. Every country differs on the time and resources needed to set up a subsidiary, but it can take up to a few months when handling the process on your own.
How to establish a Norway subsidiary
Choosing to establish a Norway subsidiary is not a decision you should take lightly. You’ll need to consider various factors, such as the business environment, location, and language. The type of industry and existing business relationships also play an important role in whether you should open a subsidiary in Norway.
Different regions and cities often have their own rules, costs, and microcultures. If you do not know the Norway area well enough, it’s best to work with a global growth expert that can help you determine the best location for your company. Around 95% of people in Norway speak Norwegian, although English is very common as a second language.
The most common Norway subsidiary structure is a private limited liability company known as an Aksjeselskap (AS). The Norway subsidiary setup process for an AS is as follows:
- Prior to incorporation, you’ll need to deposit a startup capital into your bank account, which might be a challenge for a non-existent Norwegian entity that does not have any incorporation documents.
- Hire a Norway or EU/EEA or UK/Northern-Ireland citizen to serve as a director at your company.
- Register with the Register of Business Enterprises.
- File for VAT registration.
- Arrange mandatory occupational pension plans for employees with a pension agency.
- Enroll in mandatory workers’ injury insurance.
Norway subsidiary laws
Over the last decade, Norway has made its subsidiary laws less complex. In 2013, the country reduced the minimum capital requirement for private joint stock companies. Norway subsidiary laws then took a big leap in 2016 with the introduction of online government and bank account registration services.
Nonetheless, if you decide to establish a limited liability company, you’ll need a minimum of NOK 30,000 in share capital.
Benefits of establishing a Norway subsidiary
The most significant benefit of a limited liability subsidiary is its ability to operate independently, saving the parent company from any substantial losses or costly litigation. This independent nature also allows you to choose what kind of workplace culture you want to instill, as it can be different from the parent company and tailored to Norway’s customs.
Other important considerations
If you are ready to grow your company in Norway, make sure to examine your options carefully before committing to entity setup. Bear in mind that you’ll also have to dedicate time to learning the country’s subsidiary laws or consult with local experts to ensure your business is compliant. Rather than navigating the process alone or partnering with multiple providers, G-P offers a better option.
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