BUSINESS ACTIVITIES IN NORWAY
In order to run a business and succeed professionally, a Norwegian entrepreneur needs basic knowledge of the applicable legislation. To spread your wings, you need to know what your rights and obligations are when doing business in Norway. On this page we have compiled detailed information on types of companies in Norway, business registration, the tax system and formalities for entrepreneurs.
Running an Aksjeselskap (AS) company implies compliance with reporting, bookkeeping and accounting requirements. In order to establish an AS company, it is necessary to have share capital of at least NOK 30,000 – the company’s share capital can be used to finance start-up and establishment costs. The company is also required to appoint a board of directors and to convene its meetings at least once a year. It is worth remembering that shareholders cannot freely dispose of company funds, and any movement of money should be properly documented.
NUF, A BRANCH OF A FOREIGN COMPANY
WHAT TYPE OF BUSINESS TO CHOOSE?
REGISTERING A COMPANY IN NORWAY
WHICH COMPANIES IN NORWAY NEED PERMITS?
FORMALITIES FOR RUNNING A BUSINESS IN NORWAY
WHAT SOCIAL BENEFITS CAN A BUSINESS OWNER IN NORWAY BENEFIT FROM?
Depending on the type of business, Norwegian business owners may benefit from social benefits such as sickness benefit and maternity benefit, and shareholders who have gained full employment rights through their employment in the company may also receive salary or benefit from annual leave.
Maternity allowance is available to women who have worked for a minimum of six months in the last ten months and whose income has reached a level on which pension contributions have been paid – this should be at least half the amount set by NAV – grunnbeløp.
Owners of sole proprietorships in Norway are entitled to sick leave – during this time, the business must not generate income or costs other than fixed costs (rent, telephone bills, internet). In the case of a 50% exemption, the business may generate income for work that is not covered by the exemption, such as office work.
Sick pay – sykepenger – is paid by NAV (the Norwegian Labour and Welfare Administration, nav.no) only from the 17th day of sick leave. The amount of sykepenger depends on the entrepreneur’s income base from the previous year.
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INVOICES IN A NORWEGIAN COMPANY
WHAT CAN BE DONE WHEN A CUSTOMER IS LATE WITH PAYING AN INVOICE?
Non-payment of invoices by contractors is a common cause of lack of liquidity for many companies. When faced with this situation, an entrepreneur can:
– wait for the customer to pay,
– apply for repayment through official channels.
In such situations, it is also possible to seek assistance from the Norwegian Arbitration Council, forliksrådet, which deals with cases involving debts for goods and services. If an entrepreneur wishes to report a case to the forliksrådet, he/she should do so in the municipality where the debtor lives or operates.
The entrepreneur has the option to demand payment of the amount due 14 days after the due date of the invoice. Inkassovarsel is a reminder to pay, which should precede a referral to a debt collection company or a court. The reminder should include a precise deadline for payment of the debt – at least 14 days – and the amount owed. A reminder – purring – may be sent after the specified payment deadline has passed. It is worth remembering that subsequent reminders mean that interest – purrebegyr – may be added to the amount owed for non-payment on time. If sending a purr does not produce results, the entrepreneur can issue a demand for payment – inkassovarsel – and after a further 14 days a final demand for payment – betalingsoppfordring. Only after this is it possible to take the matter to a Norwegian court or a debt collection company (inkasso).
If the entrepreneur intends to wait for the customer to pay, he or she should pay the tax for the invoice in question – otherwise the Norwegian authority will add penal interest to the tax amount.
FINANCIAL CRISIS IN A NORWEGIAN COMPANY
WHEN DOES A NORWEGIAN COMPANY BECOME A VAT PAYER?
INCOME TAX IN NORWAY
The Norwegian Holiday Act guarantees the right to holiday and holiday pay. Holiday leave – feriepenger – is granted to every employee and holiday pay is exempt from taxation.
Norwegian legislation regulates the amount of holiday pay. The amount of the benefit depends on the amount of the employee’s salary – base and commission – from the previous year, and sickness and carer’s allowance is also included in the salary.
During the period of benefits, holiday pay is accrued:
– sickness benefit – for the first 48 days,
– parental benefit – for the first 12 or 15 weeks.
Depending on who paid the employee’s accrued benefit during the period, holiday pay is paid by the employer or the Social Insurance Office – Folketrygden.
The benefit should be paid on the last day before the employee’s holiday. If the holiday is not taken in full, the payment of feriepenger is also partial – the benefit is only paid when the holiday is taken. Holiday leave can be carried over to the following year – this applies to a maximum of 12 working days.
Norwegian employees are entitled to a minimum of 25 working days of annual leave – an additional week of leave is added for those over 60 years of age. It is worth remembering that Saturdays are treated as working days in Norway.
Holidays should be scheduled at least two months in advance. The employer shall determine the date of the holiday in consultation with the employee, but it is for the employer to make the final decision on the matter.
RETIREMENT IN NORWAY
The amount of the benefit depends on the number of years worked, the savings you have and how long you have lived in the country. The retirement age is 67.
The rules relating to the award of pensions are based on date of birth:
– for persons born before 1954, the old rules for pension calculation are applied,
– for persons born between 1954 and 1962 a combination of the old and new pension calculation rules is used,
– for persons born after 1962, the new pension calculation rules are applied.
According to the social agreements between Poland and Norway, upon returning home, persons who are entitled to a Norwegian benefit may continue to receive their pension. To do so, an appropriate application must be submitted to the Social Insurance Institution – ZUS.
If certain conditions are fulfilled, a Norwegian pension may also be drawn while staying abroad:
– stay abroad for up to 12 months: the pensioner remains a member of folketrygden provided he/she has stayed in Norway for at least 6 months in each benefit year,
– stay abroad for more than 12 months: the pensioner ceases to be a member of the folketrygden.