Starting Your Own Business

An introduction to different aspects of Norwegian regulations

Table of Contents

Auditing ...... 21 PREFACE ...... 4 ILLNESS BENEFITS, OCCUPATIONAL INJURIES, PENSION SCHEME 22 INTRODUCTION ...... 5 Calculation of the basis for illness benefits ...... 22 Business climate in Norway ...... 5 Maternity benefits ...... 22 Type of Business ...... 5 Mandatory occupational pension ...... 22

BUSINESS OR HOBBY ACTIVITIES?...... 6 EMPLOYMENT ...... 24 Preconditions ...... 6 Registering the employee ...... 24 Will your plans lead to real business or are you actually The Employee Register ...... 24 a wage earner? ...... 6 Employment contract ...... 25 By own expenses and risks ...... 6 Employers’ deduction of withholding tax ...... 25 How to report and pay the taxes withheld ...... 25 REGISTER YOUR BUSINESS ...... 7 Responsibility ...... 25 Duties ...... 25 Initial registration ...... 7 How to register the business? ...... 7 TAXATION ...... 26 The name of your enterprise ...... 8 Register of Business Enterprises ...... 8 Sole proprietorship (Self-employed business) ...... 26 The Central Coordinating Register for Legal Entities - Taxation of general partnerships (ANS or DA) ...... 26 foreign entities ...... 8 Taxation of limited companies and shareholders ...... 26 D-number ...... 9 Authorisation ...... 10 MANDATORY LICENCES ETC...... 27 Authorization ...... 27 CHOICE OF BUSINESS ENTITY ...... 11 Travel agencies, travel organizers etc...... 27 Sole Proprietorship (Self-employed Business) ...... 11 Catering businesses ...... 27 General Partnerships ...... 12 Transport business ...... 27 Business with Limited Liability ...... 12 Currency regulations ...... 27 Cooperatives (SA) ...... 15 Building licence ...... 27 Norwegian branch of a foreign enterprise (NUF) ...... 16 Identity cards in the building and construction Other types of enterprises...... 16 industries ...... 27 Schemes for entrepreneurs...... 28 VALUE ADDED TAX (VAT) ...... 17 IMPORT AND EXPORT OF GOODS ...... 29 VAT - who and when ...... 17 VAT rates ...... 17 Information from the Directorate of Customs and Excise Registration in the VAT Register ...... 17 ...... 29 Registration by the use of a representative ...... 18 Obligations and rights ...... 18 BUSINESS PLAN ...... 30 More information ...... 18 Before you start ...... 30 Special conditions ...... 18 Vision, mission statement and business idea ...... 30 Marketing ...... 30 ACCOUNTING AND AUDITING ...... 19 Further advice ...... 31 Legal Basis ...... 19 The different sections of the business plan ...... 31 Accounting ...... 19 Required documentation ...... 19 TAX AUTHORITIES ...... 32 Accounting principles ...... 19 Documentation of expenses and income ...... 20 GLOSSARY ...... 33 Making your business documents valid ...... 20 Who can tell… ...... 35 Annual report ...... 21

Storage of records ...... 21

Acknowledgements The text in this document is produced by Bedin based on information from a number of different sources. In some instances, the information has been somewhat shaped to suit the purpose of the guide. In others, such as references to legislation and regulations, and where the information already is available in English, we have given priority to precision and consequently chosen to reproduce the contents from the proper authority. Nevertheless, all mistakes - both factual and with respect to language - are solely our responsibility.

If you find errors or perhaps have other comments, please don't hesitate to contact us via www.altinn.no – start and run business. Your contributions will be appreciated.

Our main sources:  www.bedin.no  www.altinn.no  The Brønnøysund Register Centre - www.brreg.no  The Tax Administration - www.skatteetaten.no / www.taxnorway.no / www.voesnorway.com  The Ministry of Finance - government.no (MF)  The Ministry of Foreign Affairs - government.no (MFA) and www.norway.org.uk/  www.norway.no  Statistics Norway - www.ssb.no  The Norwegian Labour and Welfare Organisation (NAV) - www.nav.no  The Norwegian Labour Inspection Authority - www.arbeidstilsynet.no  The Ministry of Labour and Social Inclusion - government.no (MLSI)

Preface

There are few restrictions on starting a business in Norway. If you are at least 18 years old, not declared incapable and not under bankruptcy quarantine, you may establish an enterprise. You don't have to live in Norway yourself; however, the enterprise must have a Norwegian address.

On the surface it seems uncompli- entrepreneurs in a straightforward cated to start your own business. manner. Registration is achieved by submitting The early chapters deal with the a single form to the authorities. But of formalities: How to register the busi- course, there are a number of rules ness, the implications following the and regulations that affect both type of business entity, taxation (in starting up and running your business. particular Value Added Tax), And it is your responsibility to know accounting and duties as an employer. all aspects relevant to your business - Note that accounting and VAT are enterprise. dealt with in separate guides from In addition to knowing the impli- www.bedin.no. Following that, we cations of the relevant legislation, you introduce restrictions, i.e. businesses have to make some decisions that will that require some authorization or influence both formal aspects such as licence. Also some aspects of import accounting and auditing, and your and export are introduced. One status as businessman or -woman. chapter deals with the business plan, You may for instance be the owner of an important document in your and work in a sole proprietorship or, dealings with others, such as credit you may be employed by a company institutions. Finally, we provide a that you in fact own. In this guide we short glossary where we explain and will outline how this will affect taxa- give you the original Norwegian term tion, social benefits etc. of some of the concepts used.

This guide is meant primarily for you This guide is somewhat voluminous. who are on the brink of starting your Still, we cannot claim that we are able own business, operating in Norway. to give you the full picture. We do, Admittedly, all aspects of the however, hope it will serve as a legislation and the corresponding satisfactory starting point. And we regulations are not easily accessed, most certainly wish you the best of particularly since a great part of the luck with your plans as an entrepre- relevant material is available in neur in Norway. Norwegian only. We have, however, Remember that if you need further done our best to use relevant sources, information, the Narvik Business verify the terminology and explain the Information Services (800 33 840) is essential implications for the only a toll free phone call away.

Introduction

Business climate in Norway and fisheries settlement negotia- Type of Business tions and more. In Norway, stimulation of the For you, about to start your own The distribution of income is entrepreneurial spirit is a policy of business, the choice of business achieved primarily through the national priority. Not surprising, type is often the first question to regulation of and rates for income knowing that the majority of the arise. tax and social benefits, including businesses our welfare will depend Starting a new business, the the National Insurance Scheme. on 10 - 15 years from now do not alternatives are normally: Tax agreements for research and yet exist. development expenditures, as well  Sole proprietorship / self-employed Whether it can be attributed to as state support for research have business (In Norwegian "enkelt- the industrial policies or not, will been implemented to promote the personsforetak"). not be discussed here, but it is a fact growth of new industry.1  Partnerships (“ansvarlig selskap” - - according to the Global Entrepre- ANS or "Delt ansvar" - DA). In this neurship Monitor (GEM) - that guide, we often refer to this type of Norway is among the top entrepre- entity as unlimited neurial countries in Europe. The company/general partnership. general interest in starting one’s  A private limited liability company own business is stimulated for (“aksjeselskap” - AS). In this guide instance by competitions for mainly referred to as limited prospective entrepreneurs and even company. TV programmes on how to transform business ideas into  A branch of foreign enterprise successful enterprises. The choice has bearing on the In simple terms one may say that responsibility you assume as owner Norway’s economic policy is based of the business and your freedom to on the following pillars: control the assets of the business.  Stabilize and counteract unem- The company category should ployment and inflation. match both the business sector and  Stimulate industrial growth in all your financial situation. parts of the country.  Influence the structure of The type of business entity industry. affects:  Influence the distribution of income.  Your responsibility as owner  The extent by which you may Regions with little industry are control the assets of the business subject to more lenient taxation than other areas, for instance in the  Your personal responsibility for the form of differentiated employer’s business debts contribution. Also, credit  The formal bodies of the business, institutions have been established to i.e. general assembly, board or a provide support to the regional business manager industrial sector as well as agriculture, fisheries and certain other industries. The purpose of The standard types of business these schemes is to promote enterprises are discussed in some innovation and maintain local detail later. Note that this guide industry cannot give specific advice on what In addition to their financial and type will suit your purposes. We credit policies, the central will, however, try to cover the authorities have implemented an implications on income, taxation income policy which involves 1 Source: www.norway.org (Edited from and possible debts associated with taking measures to influence the Aschehoug and Gyldendal's Norwegian each type of business entity. outcome of the wage, agricultural Encyclopaedia)

Business or Hobby Activities?

Preconditions all necessary tools/operating assets duration will be assessed by the Tax and furthermore, decides on when Authorities. Single assignments or For your actions to be regarded as and how the work is to be carried casual assignments are not enough business activities, they must out, then you probably will be to constitute a self-employed involve transactions of an economic considered as an employee of the business. nature. What you do must show the principal even if you have potential of producing a profit. registered a self employed business. If several of the following points However, not necessarily immedia- are true, you are most likely tely; - business resulting in losses running a business: over the first few years is still considered business as long as the By own expenses and risks  You have several principals on a activities may generate a profit in An important condition is that the regular basis, consecutively or at the future. activities of the business enterprise the same time. The tax authorities2 decide on shall be carried out on the execu-  You have your own office or how your activities will be tive's - often the owner's - own workshop. regarded. They will consider the expenses and risks.  You provide the necessary raw period over which the activities are “By own expense” means that materials yourself. carried out, as well as the extent of the executive covers the expenses  You use your own operating assets these activities when deciding on related to the work. These can be such as machines, transportation, the nature, i.e. business or hobby. costs of materials, purchasing costs computers. Note that these conditions are and running expenses, etc.  Your turnover/revenue is generated not absolute – there are no definite “By Own risks” means that the by delivered goods or services thresholds that must be exceeded executive has the responsibility for rather than per time unit. However, for the hobby to be regarded as the results of the assignment. The as a consultant, you may very well business. However, in one case principal can, for instance, be paid by the hour. (business) all costs related to the complain if not satisfied with the  The work does not necessarily have activities are deductible on your tax results. return, in the other (hobby) they are to be carried out by you. Instead not. It is therefore very important Financial profit you may use someone employed by you. that you engage in a dialogue with The business must be able to gene- the Tax Office at an early stage to rate a financial profit over some  The assignment is limited, both prevent any surprises later on. period of time. It is not necessary to with respect to time and extent. have a profit immediately if it is  When the assignment is completed, conceivable that a profit will occur you cannot demand another from Will your plans lead to real at some later stage. the principal. business or are you actually a  The principal has no professional wage earner? Activity nor managerial authority over you. The distinction between one and the The business must carry out some  The principal may complain and other may be hard to detect. form of activity. Passive capital seek compensation if not satisfied However, if you are going to own dispositions such as stock with the result. the operating assets, decide the investments and letting of own  The principal pays for the working hours yourself and residence do not constitute a assignment as a whole, not for the possibly experience losses, then you business enterprise. However, the individual elements such as are most likely running a business self-employed person does not have materials, management, use of in the perspective of the tax to be active himself/herself, but machinery etc. authorities. may instead have employees who If you, on the other hand, only work carry out the work. The above list is not complete. Note for a single principal who provides One of the decisive conditions that there is no single point that is for acceptance by the Tax considered decisive. In fact, you Authorities is that the business both must expect the tax authorities to 2 The organisation of the tax authorities involves activities of a certain examine your business as a whole is explained in a later chapter. extent and duration of a certain before deciding whether you are Regarding the question of business or period of time. Neither term is engaged in business or hobby hobby, the Tax Office is the proper actually defined. The extent and activities. authority.

5 Initial registration Prepare the Coordinated register Organization (NAV) or the Tax notification4 Office. These offices may also Central Coordinating Register for provide the form and help you fill it Legal Entities3 Obtain the form “Coordinated register notification”. Use the in. In order to run a business enterprise form's part 1 (main form), which you have to be registered in the can be downloaded from Central Coordinating Register for http://www.brreg.no/ or ordered Legal Entities (CCRLE). Following from the Narvik Business Hotline registration, you will receive a nine- 800 33 840 or Brønnøysund digit organization number used in Register Centre by telephone, +47 business documents and in your 75 00 75 00. information exchange with the In the process of entering the data, authorities. Unless you have a valid it will normally become clear if organization number, you cannot your entity must be registered as a open a bank account on behalf of business enterprise, if you are an the enterprise. Furthermore, you employer and if you are eligible to cannot engage employees nor pay VAT on the goods and/or register in the Value Added Tax services you sell. (VAT) Register.

Obtain the form Coordinated register How to register the business? notification ("Samordnet registermelding") from: Having considered the different aspects of becoming a businessman  The Brønnøysund Register Centre or -woman, you are now ready to At a later stage you will use the take the next step - registering your  The Norwegian Labour and Welfare same form for announcing changes business. Organization (NAV) related to the business. All the co- The authorities must be notified operating bodies will have their when you found a company, when  The Tax Office records corrected when you have notified one office. employees are hired and when you or start selling goods and/or services subject to VAT and other taxes. If  The Narvik Business Services, The following registers are associa- at least one of the mentioned condi- tel. 800 33 840 ted with the CCRLE: tions applies, you must register the  The employee section of the business with the CCRLE. The Employer/Employee Register Coordinated register notification The different authorities cooperate  The Register of Business (see below) will save you from by exchanging the information with Enterprises reporting the different applicable each other. Hence, all information  The Foundation Register issues to individual authorities. may be submitted to the Brønn-  The Value Added Tax Register øysund Register Centre, the  The Statistics Norway's Register of If you have a Norwegian birth- Norwegian Labour and Welfare number or a D-number the Companies and Business registering can be done Enterprises electronically through  The Norwegian Directorate of www.altinn.no Taxes' Register of limited 4 In Norwegian "Samordnet companies registermelding". The form can be downloaded from this website (in A legal entity shall notify, and be Norwegian) registered in, the CCRLE at the www.brreg.no/blanketter/hovedblankett. same time as, or earlier than, it is html A guide in English on how to fill in the 3 See form is available on this link: www.brreg.no/english/registers/entities/ http://www.brreg.no/blanketter/bin/BR10 5 NAV is the organization handling social 18_en.pdf security services.

registered in one of the associated in the Register of Business identification to authorities and for registers (see above). Enterprises. coordinating private and public business registers. The name of your enterprise Register of Business  Identification of the executives of The name of a company is regulated Enterprises a business enterprise. by the Business Name Act6. The The Business Enterprise Registra- minimum requirement is a name tion Act7 lists a number of different consisting of at least three Norwe- types of organizations that have to The Central Coordinating gian letters, numbers, orthographic register. Generally, the registering Register for Legal Entities signs and possibly the abbreviation in the Register of Business - foreign entities identifying the type of company. Enterprises is mandatory for all who For foreign entities, the Central Thus, ABC AS and 2BIAS DA are conduct business activities and all Coordinating Register for Legal legal names. The name cannot be enterprises with limited liability. Entities and the Register of identical to names already Regis- The register serves different Business Enterprises shall comprise tered in the Register of Business purposes. And an important one is the following information: Enterprises. The term “identical” to maintain a correct record of should be understood quite literally, people that may be held responsible 1. Name, type of organization and taking into account all letters, for actions in the name of the business address of the foreign spaces, numbers and signs. company. entity. However, the letters identifying the In sole proprietorships, there can 2. Owner, participants with full type of company are not included. be no doubt as to who is the respon- liability or fully liable partners or Consequently, the names KARI AS sible person. Therefore, such enter- the board of directors; their names, and KARI ANS are considered prises are exempt from the general dates of birth, addresses and the identical. Note also that the registration duty. However, sole relevant signature authorisations. assessment of identical enterprise proprietorships either selling goods 3. Share capital if the entity is a names is independent of purchased for such purposes and/or limited company and how much is municipality (location of the employing more than five paid up. If the share capital is not business) and business sector. employees in full-time posts are fully subscribed, only the sub- required to register. Sole proprie- scribed capital can be stated as For sole proprietorships (self- torships not required by the act to share capital. employed) businesses, the rules do so, may register on a voluntary 4. The memorandum of association differ somewhat. The family name basis. and the articles of association of the of the owner must be included, e.g. Foreign entities are obliged to main business enterprise. HANSEN’S BAKERY and CAR register in the Register of Business 5. The state by whose legislation the REPAIR OLE OLSEN. The family Enterprises if they conduct business entity is bound. Whether the entity name may be used alone, meaning activities in Norway or on the is registered in a public register of that HANSEN, MOER and Norwegian continental shelf. business enterprises in its home ØVREGÅRD may be registered. If country, and if so, the name and only the family name is used, there Registration in the Register of address of this register and the is no check for or prohibiting of Business Enterprises ensures the registration number. identical names. following to a business enterprise: 6. Name and address of any business Foreign companies registering a  The right to operate a business premises or permanent establish- branch in Norway may use the same enterprise. ment in Norway or on the name as in the country of origin,  Legal protection of the business Norwegian continental shelf. even if the name consists of less name. than three letters and/or is identical 7. The type of business activities that  A certificate of registration as to the name of a municipality, a will be conducted. identification for lenders, legal county or a country. One restriction 8. The board and general manager if registration authorities, and customs though, the name cannot include elected or employed specifically for and excise authorities. letters or signs that are not the activities, and if so, whether identified as accepted letters/signs  A business enterprise organization number as important

6 In Norwegian called "Foretaksnavne- loven". 7 In Norwegian: “Foretaksregisterloven”.

they are entitled to bind the entity submit a translation confirmed by a by signature or per procurationem8. Register Return attachment translator authorised by the requirements Norwegian authorities. Note that 2, 3 and 4 above may be  Memorandum of Association and omitted if recorded in a foreign Company Articles of Association. D-number register of legal entities as stated in  Certificate of registration from the no. 5 above. The foreign register register of business enterprises or must be approved by the King of register of companies in the country Norway. If applicable, the register of residence. will also contain information related  Minutes from the competent body to dissolution of the main company. in the entity documenting the

election of any board and general Special requirements for entities manager specifically for the that carry out VAT-eligible activities in Norway. activities in Norway:  Minutes from the competent body Foreign entities without a perma- showing the allocation of signatures nent establishment in Norway and or authorisations for the entity when which are subject to the stipulations such information is not stated on the of the VAT Act, must appoint and certificate of registration from the report a Norwegian representative. country of residence. The VAT representative can be a physical or legal person. The  Foreign entities that will operate via representative must have a residen- a VAT representative must attach tial/business address in Norway. minutes from the competent body The representative is jointly and documenting the appointment of the severally liable for payment of VAT representative, and a statement from All persons holding positions together with the foreign entity. the representative that he/she identified by the Coordinated accepts joint responsibility with the register notification, e.g. the general The required information must be entity for ensuring that VAT is manager and those authorized to recorded in the Coordinated register calculated and paid. sign for the company, shall be notification, partly in the Main  Information that does not appear on identified by a personal identity Form, partly as attachments (see either the certificate of registration number/D number/organization below). or the articles of association must number, personal name/name of be verified in the form of minutes enterprise and address. Foreign Signature from the competent body in the citizens without a Norwegian If the register return only refers to entity. personal identity number must state the Central Coordinating Register their D-number (11 figures). If a D- for Legal Entities, it shall be signed Registration in the Register of number has not been allocated, the by the general manager, business Business Enterprises also requires: Central Coordinating Register for manager or another responsible  Minutes from the competent body Legal Entities will requisition one contact person. in the entity verifying the decision from the Norwegian National Notice of first time registration to establish activities in Norway. If Census Register (Personregisteret – in the Register of Business the notice is signed by an authorised Skatt nord). Use the form "Request Enterprises shall be signed by the signatory in the entity, it is not for assignment of D-number" and board members of the Norwegian necessary to submit the attach a signed copy of the foreign enterprise. If such a board does not aforementioned minutes from the person's passport. exist, the general manager shall competent body in the entity. The form can be downloaded sign. If there is no general manager from the Brønnøysund Register either, the register return shall be Documents that contain registration Centre (D-number form). Personal signed by an authorised signatory in information shall be in Norwegian. identification numbers and D- the country of residence. In extraordinary circumstances, numbers are confidential and will documents in other languages will not be disclosed to unauthorised persons. 8 be accepted at the discretion of the A legal term often abbreviated p.p. registrar. It may be required to meaning ”by agency” or “ by proxy”.

Authorisation Some types of businesses require authorisation before starting up or the business is conducted. Authori- sation is for instance required for businesses like: Driving instructors, doctors, physiotherapists, auditors, accountants, lawyers, stockbrokers, real-estate brokers to mention some. If your business falls within the above categories, is a matter that should be raised with the proper authorities. Admittedly, it is some- times difficult to identify the correct authorities, and if in doubt, contact the Narvik business hotline (800 33 840).

You will find further information on licenses in a later chapter.

Choice of Business Entity

Sole Proprietorship (Self- however, transforming an AS to a employed Business) sole proprietorship, is much more complicated. The sole proprietorship is a type of

organization where a single and real There are no restrictions on recei- person is responsible for the ving a wage or salary and at the business. As the name suggests, a same time running your own sole sole proprietorship will have just proprietorship. Inform the Local one owner. Tax Assessment Office that your In such a company you have total income will consist of income extensive financial freedom. You from paid work and profit on are, however, also financially Initial considerations business activities. On the basis of responsible for all debts and One of the first questions arising the information from you, the tax obligations incurred by the when establishing a new business, office will estimate your total company. Note that there is no is; what type of entity will be most income, thereby determining the distinction between personal and beneficial? Unfortunately, there is advance tax9 payments. enterprise liabilities: You are no single, definite answer to that personally responsible for the question. You will have to consider In sole proprietorships the net profit company's debts, even with your the pros and contras, and perhaps is subject to taxation, together with personal wealth and possessions. seek advice from someone who has possible income from paid work.

been in the same position. On the other hand, given an overall In order to establish a sole proprie- Representatives of the positive income, loss from the torship, you must be at least 18 authorities will, in general terms business enterprise is deductible. years old, and you must not be and to the best of their abilities, try The latter may be a great help in the restricted by bankruptcy quarantine. to outline the consequences of the start up process, if you hold on to You do not have to be a resident of different alternatives, but you your position in another company Norway. However, the business cannot expect advice with regard to while trying to make your sole enterprise must have a Norwegian your particular situation. proprietorship a success. address. Note that your choice will

influence aspects like the extent of A common misunderstanding is that All sole proprietorships may (but your personal responsibilities, risks, you only pay tax for the amount of are not required to) register in the taxes, rights and duties, and your money you withdraw from your Central Coordinating Register for liberty to manage the assets of the company. This is not correct. Even Legal Entities. The registration is company. if you withdraw nothing, the net free of charge. Sole proprietorships It is therefore natural (in some profit of the company is tax also have the right to register in the cases even necessary) to seek eligible. Register of Business Enterprises, advice from accountants, auditors, but a fee is charged. If the business lawyers or other professionals Income from the sole proprietorship engages at least five employees before the final choice is made. is calculated as part of your and/or is conducting trade, personal income. Together with the registration is mandatory. When you start a new and probably standard personal tax return10, you You may experience that many small company, you normally face have to fill in a business enterprise suppliers will ask for your the following alternatives: return that informs the tax authori- organization number in the Central ties about the financial situation and  Sole proprietorship (self-employed Coordinating Register for Legal performance of your company. The business) Entities, perhaps to check if the new profit of the company is transferred  General Partnerships (ANS and enterprise is real, i.e. another incen- to the income part of your personal DA) tive for registering your business. tax return.  Limited liability company (AS)  Cooperative (SA) Many entrepreneurs start their businesses as a sole proprietorship, but reorganize to a limited liability company (AS) at a later stage, for 9 The glossary gives an explanation of instance when the business grows. “advance tax”. Doing so is simple. The opposite 10 See the glossary

The deadline for submitting the DA (Collective responsibility): nominal start-up capital. You may return(s) follows the deadline for In this kind of unlimited liability decide to make investments not business enterprises. company the owners are consisting of cash, for instance an collectively responsible for all operational asset required for the As the sole proprietor by definition debts. However, each owner is business. is not a wage earner, he or she is responsible only for a part In an unlimited liability not, in case of illness or sick leave, corresponding to his/her part of the company, the deposit or start-up automatically entitled to social ownership. capital does not hold the same benefits from the first day of A creditor cannot, for instance, significance as it does in a limited absence. Note that a medical charge more than 10 per cent of the liability company. The reason is of insurance is not mandatory. Neither debt from the owner holding only course that if necessary, you and does the proprietor have to set aside 10 per cent of the ownership, even your partners are obliged to cover money for holiday leave for him- or if the other owners are unable to any debts with your personal assets. herself. The sole proprietor has no cover their parts. rights regarding the state guarantee It is simple to transform an ANS or concerning wage claims in case of When an ANS or DA type of DA to an AS (limited liability bankruptcy, nor compensation for company is established, a company company), the reverse however, is temporary or permanent lay-off. assembly is mandatory. You and much more complicated. your partners are required to make a written and dated agreement signed Unlimited liability companies are by all partners. The minutes from subjected to partner taxation. This this meeting, signed by all partners, means that each partner is a together with the company personal tax payer, where his/her agreement must be submitted to the part of the profit (or loss) is treated Register of Business Enterprises together with other personal income when you want to register the and deductible expenses. If your company. You should be aware of ownership in the company is 25 per some formalities: The company cent, then 25 per cent of the net profit is added to your personal General Partnerships agreement must as a minimum state: income. Also, 25 per cent of the A general partnership is a company value of the company capital assets with unlimited liability where there (a) The name of the enterprise. is added to your personal property. are two or more owners, often (b) Names and residential addresses The actual ownership, i.e. your referred to as companions of all active partners. Note that the part of the company is stated in the (partners). In such a company the company also may have so called company agreement. owners have a personal silent partners, i.e. partners who do responsibility for the overall not represent the company in any liability of the company, in full or external relations nor have a sub- Business with Limited Liability in part, however, in a way that stantial ownership/responsibility. collectively covers the debt of the Private limited liability companies - (c) The purpose of the company. company. identified by AS - or public limited (d) The municipality where the liability companies - identified by company has its main office. In practical terms we distinguish ASA - are enterprises where none (e) If the partners are making between two main types of of the participants are personally capital investments, in which case unlimited companies: liable for the company's obligations. the value of the investments must The founding and operation of a be stated. ANS (responsible company): limited liability company is

In this kind of partnership the governed by Act no. 44 from 1997, In addition, the owners/partners “The Limited Liability Company owners are jointly and severally often draw an agreement that liable for all debts. The amount of Act” (In Norwegian: Aksjeloven). regulate the relations between them. In a limited liability company, debt one owner is unable to cover, Note that it is up to the partners to may be charged each one of the none of the owners are responsible decide if any valuables should be for more than the sum paid as share other owners. deposited in the company or not. capital. You may, however, be The act does not require a cash or a required to secure the company

loans by a personal guarantee, one shareholder may own one or lity is assumed, - the responsibility collateral or some other form of more shares. to pay for the share within the time surety. In case of bankruptcy, your The liability of a shareholder is limit expressed in the Act. As liability is then the share capital limited to the capital paid to the compensation, the shareholder gets plus the collateral. company. a number of "rights" in his/her The actual responsibility is The exception is when the dealings with the company. limited to the share capital itself, owners violate the conditions stated The shareholder is for instance i.e. the nominal value of the shares in the Act, in order to protect the entitled to his/her share of the any owner owns. The company's share capital or in the instances profit, and he/she may attend the creditors may only seek where the owners clearly have general assembly and vote on the compensation from the assets of the conducted acts that jeopardize the issues raised. company. valuables of the company or put the The share is, as previously creditors at a risk of suffering a mentioned, a part ownership in a Should a bankruptcy occur, the loss. company and may as such be creditors cannot demand compen- If that is the case, the share- regarded as an asset. Shares may be sation from the shareholders. holders may be held responsible and traded or mortgaged, but note the Neither can the creditors demand liable to pay compensation for the conditions that may apply. When a that the shareholders pay up addi- loss suffered by the company or the share is sold, the buyer also tional capital into the company creditors. receives the rights associated with beyond the sum required as the Beware also that the standard the share. nominal value of the shares. rule of limited liability may be As shareholder in a company Since the creditors may only overruled by agreements. In cases you may withdraw money as share demand payment from the valuables of mortgages or loans, it is dividend or receive a salary for your and assets of the company, from customary that the banks demand work in the company. There are their point of view it is important the shareholders to personally strict rules regarding the amount that the company is sound and has a present guarantees that secure the given as share dividend. fair working capital that is not loans established in the name of the Many entrepreneurs starting limited likely to be withdrawn from the company. Such a guarantee means liability companies also work in company. The Limited Liability that if the company is unable to their own businesses, receiving Company Act therefore states that meet its obligations, the bank may compensation in the form of all the shareholders have to pay a demand the shareholders who have salaries/wages. In such a case you minimum amount of money – the signed the guarantee to personally are a wage earner in your own share capital – that the owners honour the obligations. company and will enjoy the benefits normally cannot withdraw from the as well as the drawbacks of such a company. position. For instance, the company In addition, the act states a deducts tax according to the tax rate number of conditions limiting the decided for you. In addition, the owners' right to use the capital and company will have to pay payroll valuables of the company. There tax on your gross wage/salary. On are, for instance, rules limiting the the other hand, being a wage earner amount given as share dividends. means social benefits, for instance Likewise, there are limitations to in case of illness, not available to the amount of money the owners the sole proprietor. may lend from the company.

Company articles The shareholders The Act states that the share capital All companies with limited liability The shareholders are the owners of shall be at least NOK 30 000. One must have Company Articles of the company. The term "share" might say that this is the entrance Association. The Act states certain simply means a part ownership of fee for establishing and running a minimum conditions that the the company. One or more persons business where the owners enjoy articles must fulfil. In addition, the may own the company, and a single limited liability. Company Articles may cover person may own one or more The share capital may be linked aspects not explicitly stated in the shares. to a single or a number of shares Act. with the same nominal value. Any When a share of the company is acquired, one particular responsibi-

Note that the Act in fact gives In such a case, it is said that the members must be stated in the extensive rights to state other shares are bought at a premium. Company Articles. Company Articles than those that otherwise would apply according to The Memorandum of Association The board is elected by the the words of the Act. The Company declares the latest date for payment company’s General Assembly. The Articles may only be altered by the of the share capital into the com- General Assembly decides on General Assembly. pany's account. The Act states that electing/appointing deputies to the Among other things, the company the share capital must be paid in full board members. At least one deputy articles should state: before the company is registered in is required if the board only has one the Central Coordinating Register or two members.  The name of the company. of Legal Entities. The company At least half the number of the  The name of the municipality from must be registered within 3 months board members must either have where the company will operate. after the signing of the Memoran- permanent residence in Norway or  The type of business. dum of Association. Consequently, live in and be subjects of European  The share capital. it is advised that the final date for Economic Area (EEA) states. payment of the share capital is The members of the board are  The nominal value of each share. before the 3 months have passed. normally elected for two years. The  The number of members of the In addition, the memorandum Company Articles may decide board. decides the members of the board longer or shorter service times, but  A list of issues to be addressed by and the auditor of the company. four years are the maximum. The the general assembly. service time ordinarily starts at the General Assembly, board of time of election, and lasts until the directors and managing director conclusion of the General Assembly Memorandum of Association The top-level body of the company in the last year of service.

In addition to the Company is the General Assembly. All the The board has the actual leadership Articles, the Act requires certain shareholders have the right to attend of the company, not only the additional contents of the the General Assembly, and nor- business part, but also the overall Memorandum of Association: mally, the right to vote. Usually one operations and conduct of the Primarily, all founders must be share gives one vote. company. identified by name, address and In addition, the company must According to the Limited personal identification number have a board (of directors). The Liability Company Act, the board (fødselsnummer). members of the board are respon- has the responsibility to ensure that sible for the day-to-day business the company is adequately The memorandum must also state affairs of the company. organized. In addition, the board how many shares each founder The company may also have a must see to that necessary plans and buys. One person may buy several manager. For companies with a budgets are worked out. or even all shares, and the founders share capital of less than NOK 3 may buy different number of shares. million it is not necessary to Managing Director appoint a general manager. The memorandum must state the In small companies, organising Appointing a director or not, should price for each share. It may be the management of the company be decided based on the best decided that the share subscription may be very simple. Often it is interests of the company. The board be paid in the form of money or in sufficient that the company has will normally look for the type of other goods/valuables. If the latter, appointed a board (of directors). organization that is both sound and there are certain rules as to the The board may even have only one best suited to the expected business documentation of the value of the member, possibly, but not operations. goods/valuables. necessarily one of the shareholders. Managing director is the Limited Liability Companies Act’s term for Note that the sum paid for the share In general, the enterprise may itself the person in charge of the day-to- can never be lower than the nominal decide on the number of members day operations of the company. value as indicated by the Company on the board. However, if the share Different terms may be used, Articles. However, it may be capital is NOK 3 million or more, at e.g. in Norwegian “administrerende higher. least three members are required. direktør”, “forretningsfører”, The actual or minimum number of "daglig leder", etc. The Act applies

whatever title is given to the Cooperatives (SA) Requirement as to the content of the manager. memorandum of incorporation By a cooperative is meant a group The managing director is nor- whose main objective is to promote  The memorandum of incorporation mally employed by the company. In the economic interests of its shall contain statutes for the addition, the manager may well be a members by the members taking cooperative, see below. member of the board. That is part in the society as purchasers,  The memorandum of incorporation entirely left to the discretion of the suppliers or in some other similar shall also state: General Assembly. way, when 1. the founders’ names or business The manager must be a resident 1. the return, apart from a normal enterprise names, addresses and of Norway, or be a subject and dates of birth or organisation resident of one of the EEA member return on invested capital, is either left in the society or divided among numbers, countries. 2. the names, addresses and dates of the members on the basis of their share of the trade with the group, birth of those who are to be board Summing up: and members.  Private limited companies are 2. none of the members are personally  If the founders are to contribute required to start with a share capital liable for the group’s debts, either capital in connection with the of minimum NOK 30 000. in whole or for parts which together establishment of the enterprise, the  In addition to cash, the share comprise the total debts. memorandum of incorporation shall capital may consist of assets, such also state: as machinery, cars and office equip- The members are not obliged to 1. the amount that each founder is ment. The founders must prepare a contribute capital to the cooperative to pay and the total capital that the statement of such share capital unless the individual member has founders are to contribute, entries. An auditor must confirm agreed to this in writing when 2. the date when the capital is to be the statement. subscribing for membership or in a contributed.  One shareholder is sufficient. separate agreement. Any duty to If one or more of the founders are to  At least 50 per cent of the board contribute capital must be limited settle a capital contribution in assets members must be residents of either to a certain amount or in other than money, the memorandum Norway. In addition, the managing some other way. The requirement of of incorporation shall state the director must be a resident of agreement does not apply to a duty assets concerned, the name and Norway. The provisions do not to pay a membership contribution if address of \the founder concerned apply to citizens of states within the so stipulated in the statutes. and the terms that are to apply. EEA when named citizens are residents of these states. A cooperative may be established The statutes shall as a minimum  The company must be founded, by at least two persons and must contain provisions regarding: must prepare company articles and always have at least two members.  the enterprise’s name, hold the forming general assembly Should there be fewer members, the  the municipality in Norway where in accordance with the Limited enterprise is to be dissolved. the enterprise is to have its Liability Company Act. Both natural persons and legal registered office,  The company must be registered entities may be founders of the  the activities to be carried out by with the Central Coordinating society. Those who are not of legal the enterprise, Register of Legal Entities within 3 age and capacity may not be  the size of any membership months of the forming general founders. contributions, whether interest is to assembly. be paid on these, and whether these  The company is required to The founders must date and sign a are to be repaid if a member engage an auditor. memorandum of incorporation. withdraws from the enterprise,  The company must submit the Once all the founders have signed annual report to the Register of the memorandum of incorporation,  whether a membership fee is Company Account at the the membership has been payable, Brønnøysund Register Centre subscribed for and the enterprise  how the annual profit may be before 1 August the year after the has been established. utilised, end of the financial year.  the number of, or the lowest and highest number of, board members,

 the issues that are to be discussed at  Minutes from the managing board acts, but nonetheless, are subjected the ordinary general meeting and of the enterprise showing that a to certain rules and conditions. Such  how the net assets are to be divided decision has been made to set up the organizations may be societies, if the enterprise is dissolved. Norwegian branch. associations and for instance charity  Name of the person responsible for organizations (often referred to as European Cooperative Societies the Norwegian branch, or NGOs - non-governmental – a new kind of enterprise entity in alternatively, the Norwegian organizations). Norwegian legislation representative and a declaration of If you want to register a society The Act on European Cooperative consent from him/her. in the Central Coordinating Register Societies (the SCE Act) will make it for Legal Entities, you have to easier for a cooperative to move its All documents and attachments certify that the organization is headquarters from one EEA country submitted to the Register of founded and currently exists. to another without having to Business Enterprises must be in the Hence, you need to submit both the dissolve the enterprise in the first Norwegian language. Articles of association and the and re-establish it in the next The business address (in founding document in order to country. Norway) of the branch must be register. stated.  You may find other types of Note that the Coordinated register enterprises like limited partnerships Norwegian branch of a foreign notification must be signed by the (in Norwegian "kommandittsel- enterprise (NUF) members of the board and the skap") and foundations. These types A foreign enterprise that wishes to manager in Norway. If neither is of companies are rarely used for extend its operations to Norway, appointed, the return must be signed business activities conducted by may register a branch of the by the person authorized to commit small and medium sized enterprises enterprise in this country. the enterprise by his/her signature. (SMEs). Hence, they are not considered here. If a branch is established in A Norwegian branch of a foreign Norway, it is the main office enterprise must submit the annual (headquarter) that is responsible for report of both the Norwegian When you: the Norwegian part of the branch and the foreign enterprise to operations. the Register of Company Account  establish a company … If the branch has no employees, at the Brønnøysund Register Centre  hire employees or … a Norwegian representative must be before 1 August the year after the appointed. The representative will end of the financial year.  sell goods and services liable to be responsible for tax obligations. VAT and other taxes … The branch is normally obliged to pay taxes to Norway, and must Bankruptcy in a Norwegian branch … the authorities must be notified otherwise operate according to the of a foreign enterprise (NUF) Norwegian legislation. If foreign The manager or representative of citizens are employed, these must the branch may petition for have work and residence permits. bankruptcy. Only the part of the There are no equity capital enterprise located in Norway will be requirements in order to set up the taken under bankruptcy branch. To register the business, proceedings. The trustee (appointed one submits the form Coordinated by the court) will notify the foreign register notification to the enterprise register about the Brønnøysund Register Centre. The possible liquidation of the branch. following documents must

accompany the return:

 A certificate of registration from the Other types of enterprises authorities in the country where the main office is located. Associations and Societies  The main office's memorandum and There are types of organizations articles of association. which are not regulated by specific

Value Added Tax (VAT)

VAT - who and when If a cash payment has been made VAT shall be calculated and paid for the imported goods, the import on the importation of goods. For the The Tax Office maintains records of declaration, stamped by the customs purpose of VAT liability, it is businesses that are obliged to pay treasurer/office will serve as docu- irrelevant whether a consumer or a VAT (the VAT Register), and is mentation of deductible input VAT. taxable entity imports the goods. responsible for the administration VAT must also be paid on the and control of VAT. Foreign businesses engaging in purchase of services from abroad. The part 2 of the Coordinated activities which are liable to VAT Liability for VAT exists if the register notification is dedicated to registration shall calculate and pay purchaser is a taxable entity or a companies that are affected by the VAT according to the same rules as public institution and the service VAT regulations. Norwegian businesses. would be liable to VAT if supplied All people running businesses VAT shall be paid on the sales in Norway. that sell goods or VAT eligible of all goods and services, unless services are obliged to register in they are specifically exempted from the VAT register when the turnover VAT liability. VAT is also charged exceeds NOK 50 000 over a period VAT rates on the withdrawal by the owner of of 12 months. The standard rate of VAT is 25 per goods and services from his own If you are registered in the VAT cent. The rate of VAT on the sales business when such goods and register, you are allowed to deduct of foodstuff is 15 per cent. The rate services are for private use or for VAT from the cost of the goods and on public transport, on letting of other purposes falling outside the services used in your own VAT rooms in hotels, motels and tourist scope of the VAT Act. eligible business. cabins etc., and the hiring out of

For charity and public camping areas, cabins, and holiday The supply of certain goods and institutions and organizations, the flats is 8 per cent. services are exempted from VAT, registration limit is NOK 140 000. for example sales and letting of real

property and rights to real property, General rule financial services, health care Registration in the VAT A complete presentation of the rules services, social services and Register governing VAT is found in the educational services. A wide range Both foreign and Norwegian ”VAT Act”. The general rule is that of services in the cultural area are businesses supplying goods and VAT (output tax) is calculated on exempted. The same applies to services in Norway, shall register in all sales of goods and services,.. certain services in the tourist the VAT register when their sales or VAT on purchased goods and business, like guide services. withdrawals of such goods and services (input VAT) are Taxable entities with only exempted services exceed NOK 50 000 over a deductible. sales shall not register for VAT and period of 12 months. A written Certain expenses do not qualify do not get credit for input tax on notice of the business activities for deduction of input VAT. Among purchases. shall be sent to The Central these are food expenses, payment in Coordinating Register for Legal natural goods and representation Some sales of goods and services Entities (CCRLE) or to the Tax expenses. are exempted from output VAT, but Office where the foreigner (or his All input VAT deductibles must qualify for deduction of input VAT representative) has his place of be qualified by genuine documenta- under certain conditions. Such business/residence. The written tion, e.g. invoices, sales documents conditions include for instance notice shall be given by filling in etc. export of goods and services, sales the registration form "Coordinated and services to foreign ships or register notification" part 1 and 2. If When goods are imported, the 11 Norwegian ships engaged in foreign the business is already registered in customs declaration , together with trade, to aircrafts in international CCRLE and has given all the an account statement from the routes and sales and services for use necessary information to this customs treasurer, serve as docu- in the offshore petroleum industries. register, only part 2 of the mentation of deductible input VAT. Note that companies engaged in registration form shall be filled in. such sales still are obliged to 11 The declaration is received from the register for VAT. The registration can also be done TVINN system (the Directorate of electronically through Customs and Excise's information www.altinn.no system for business enterprises)

Registration by the use of a Norwegian accounting acts. services are supplied to private representative Norwegian and foreign businesses individuals and other persons that that are registered in the VAT are not engaged in business or A foreign non-established business register shall calculate and pay public institutions, and who are with taxable activities in Norway, VAT (output tax) on their sales of resident in Norway. In these cases must register for VAT through a goods and services in Norway. A VAT shall be calculated and representative. When registered foreign business is entitled to collected by the foreign supplier through the use of a representative, deduct VAT paid on goods and through a representative who must the foreigner gets the same rights services which are to be used in his have his residence or his place of and obligations as those that follow Norwegian business (input tax). The established business in Norway. a normal VAT registration. right to deduction also includes The only requirement the VAT collected by the Customs representative must satisfy is that he Authorities at the importation of or his business is resident in goods and VAT paid on the Norway. For instance, it is not purchase of services from abroad. required that the representative is a qualified auditor or accountant etc. VAT-registered persons must Both the foreign business and submit returns on a bimonthly basis the representative shall sign the to the Tax Office. The use of registration form. shorter periods may be granted if

input tax regularly exceeds output The foreign business must keep a tax by 25 percent or more. Taxable complete account of its taxable persons with supplies of under activity in Norway. The NOK 1 million per year may apply representative shall keep a separate to submit VAT returns annually. complete account of the activities in

Norway (purchases and sales) by The VAT return must be submitted the foreign business. and VAT be paid one month and ten

days after the end of each period, The invoices for the foreign see the VAT Act Chapters 8 and 9. business’ sales in Norway shall be submitted by the representative. The name and address of the representative as well as the foreign More information business’ registration number For additional information, please (organization number) followed by refer to the brochure titled Guide to the letters MVA should be evident Value Added Tax in Norway. The in the invoice. The calculated VAT VAT provisions are laid down in (output tax) must also be specified. the Act relating to Value Added The invoices shall be issued in at Tax of 19 June 2009 no. 58. Both least 3 copies, and at least one of are available from the Norwegian them shall be kept by the Tax Administration website at representative. www.skatteetaten.no/. Note that the guide and translated Act may not Both the foreign business and the reflect the latest amendments to the representative are responsible for Act. the calculation and the payment of Further information can be obtained the VAT. from the Tax Office.

Special conditions Obligations and rights Foreign suppliers of electronic A business established or resident communications services are in Norway must carry out its obliged to calculate and pay bookkeeping according to the Norwegian VAT when such

Accounting and Auditing

Legal Basis Accounting records, including concern of the bookkeeping annual accounts, the board of regulations, however, up-to-date Accounting and bookkeeping directors' report, auditor's report, and adequate bookkeeping will obligations are determined by two vouchers, time sheets, business always be a precondition for separate acts, the Accounting Act agreements, correspondence etc. financial management and control. and the Bookkeeping Act. In simple must be stored for either 10 or 3.5 The minimum requirement consists terms the former states the types of years, depending on the nature of of the following: business entities that are required to the document. produce annual accounts and the  Outgoing invoices Many businesses use external obligatory contents of these  Incoming invoices and completed accountants and the accountant accounts. The latter states the documentation of expenses must have the required bookkeeping duties and records. All  Cash register for registration of authorization. business entities regulated by the cash sales Apart from the bookkeeping and the Accounting Act are also obliged to yearly financial statement (balance  Ledger for cash payments apply bookkeeping pursuant to the sheet), the accountant may also  Ledger for personal usage of goods Bookkeeping Act. In fact, all legal assist with filling in and transfer of and/or sales to the shareholders entities carrying out business the periodic VAT returns, PAYE12  Register appointments (e.g. if you activities or participating in such and the employer’s national activities in Norway are obliged to run a studio or medical centre) insurance contribution. bookkeeping.  Register orders

 Register time spent on assignments The actual legal basis is found in Note that accounting and book- or projects the Accounting Act and correspond- keeping are addressed in a separate ing regulations.  Register changes in the stock guide found in Bedin: The According to the Act, self-  Register transactions with respect to Accounting Guide. employed businesses/sole project/assignment

proprietors (having a balance sheet  Perform the annual stock counting

total of up to NOK 20 million and and produce the stock overview Accounting up to 20 employees) and liable The Accounting Act states that companies (having a turnover of up Registration of transactions can be foreign enterprises carrying out to NOK 5 million and less than 5 done abroad, but documentation business activities or participating employees) do not have to work out must be kept in Norway after the in such activities in Norway, and a financial statement as defined by financial year statements have been who are subject to Norwegian the Act. prepared. taxation according to domestic When so requested by the tax legislation, are obliged to keep authorities, the books shall be made accounts pursuant to the available for control. Accounting principles Accounting Act. The Norwegian Bookkeeping Act is This implies, among other harmonized with the accounting things, that enterprises must register Required documentation directives of the European Union. transactions that are of importance All businesses with a statutory The expressed and governing to the size and composition of their obligation to keep accounts principle is that the financial assets, liabilities, income and pursuant to the Accounting Act also statements shall be in accordance expenses in an accounting system. have a bookkeeping obligation with generally accepted accounting The registration must comprise pursuant to the Bookkeeping Act. principles. all information that is of importance The purpose of the bookkeeping The standards are issued by the to the preparation of the annual regulations is to ensure the Norwegian Accounting Standards accounts and other financial reports preparation of reliable and punctual Board (Norsk RegnskapsStiftelse). that are required by acts and financial statements and enable The bookkeeping requires that all regulations (statutory reporting). subsequent control of these income and expense be entered in

statements. External control the books when it occurs. In most The accounting system must itemise requirements are thus a primary instances, the pay by date on the all registered information that forms invoice is the date used. the basis for the amounts stated in 12 It is important that the book- statutory reporting. Pay-as-you-earn – tax withdrawn from the employees wages keeping is carried out continuously,

making the books up to date at all  Time and place for the delivery be dated and contain a description times. Cash income and with-  Payments and date of maturity of the goods. drawals are entered on a daily basis,  Taxes connected to the transaction and all the books should be revised  For sales between VAT registered and updated at least every second companies the sales document shall Making your business month. indicate the price excluding VAT documents valid All transfers between customer and the amount of VAT. All organizations registered in the and supplier, including cash buys Register of Business Enterprises and sales between businesses are Companies selling primary to must enter their registration number entered in the debtors’ and private customers may choose to on the stationary and business creditors’ ledger. specify the price including VAT in documents. The number on the

the sales document, but the VAT documents will authenticate the

shall be specified separately. seller and add credibility between Documentation of expenses If some of the services or goods the business partners and in relation and income are exempted from VAT, in accor- to the authorities. All records in the income statement dance with the regulations of the If you are running a business must be documented by receipts VAT Act, each of these categories and are registered in the VAT (vouchers). It is recommended that must be specified and added register, the letters MVA must be the file be organised as follows: separately in the document. added at the end of the business The same applies to sales where the register number on all documents. Outgoing invoices Numbered VAT rates vary. This will indicate that your business (sales) An invoice is always issued in at is obliged to include VAT to the least two copies, where one is kept sales price. If these identification Incoming invoices By date or by the seller. letters or the business register (buys) alphabetic number are missing on the sales Cash sales receipts By date The cash sales receipts must, on a document, your customer may not Bank transactions By date daily basis, be checked against the get deduction for the VAT. actual contents of the cash register. Limited liability companies, public Uncategorized By date The result is dated and signed limited liability companies and vouchers/receipts before it is filed. departments of foreign companies Should you withdraw cash or must in addition add the word goods for your own or your “Foretaksregisteret” in connection Note that all expenses and family’s personal use or for gifts, to the business register number to procurements must be documented all withdrawals must be recorded at indicate that the business is by receipts in their original. the standard price. The record must registered in the Register of When goods are sold to other business enterprises, the documentation consists of a numbered and dated sales document (invoice).

The Act is strict with respect to both the contents and format of the invoice. It must include the following:  A pre-printed number  The date of the issue of the document  Name and address of the seller  The business registration number  Name, address and registration number (if existing) of the buyer  The nature and volume of the services provided

Business Enterprises. Other The annual report and financial Auditing businesses registered may do the statement must be produced in You are obliged to appoint a same, but are not obliged to do so. Norwegian language. Norwegian auditor if the operating The purpose of this requirement is Contact the local tax office for income from your business entity's simply to provide information on explanation of the rules governing overall activities in Norway exceed which register the enterprise is the stock counting and assessment NOK 5 million. If the annual registered in. of the value of the stock. accounts show operating income There are additional require- exceeding this threshold, the ments for limited liability and obligation to appoint a Norwegian public limited liability companies Storage of records auditor comes into effect for the regarding the business documents. As mentioned, the records must be subsequent accounting year. If the The company entity and the head kept on file in Norway for a period operating income in the following office address must be added, and it of 10 years or 3.5 years after the two accounting years falls below must be notified if the company is end of the financial year. this threshold, the obligation to under liquidation. The 10 years obligation include appoint a Norwegian auditor ceases

all transactions documenting the from and including the third

business, such as annual accounts, accounting year. Annual report directors' report, auditor's report, The financial year follows the business agreements, Sole proprietorships and unlimited calendar year. Based on the correspondence etc. liability companies with up to five recorded transactions as described Time sheets and vouchers must employees that are required to and the stock counting, the be kept for 3.5 years. follow the Accounting Act are enterprise shall produce an annual exempted from the obligation to report consisting of profit and loss appoint an auditor if the annual statement, balance sheet and cash turnover is NOK 5 million or less. flow statement. All limited companies must always appoint auditors unless the board of directors has decided not to appoint one. The following conditions must be fulfilled if the limited company has decided not to appoint an auditor:

The annual turnover is NOK 5 million or less The total balance sheet is less than NOK 20 million The average number of employees not exceed 10 man labour year

Parent companies in a corporation will always be obliged to appoint an auditor.

Illness Benefits, Occupational Injuries, Pension Scheme

The right to illness benefits for sole three years. The definition of the work representing at least two man- proprietorships and owners of pension points is not given here. labour years. unlimited companies starts from the Note that it is the income defined as 17th day of absence. The benefit basis for the pension points that The act does not apply to employers equals 65 per cent of the ordinary warrants the right to illness who have a pension scheme in income. benefits, not the income derived accordance with legislation or You may achieve a better com- from the business activities. If you collective agreements that apply to pensation by a voluntary additional have income both as an employee state or local authority employees. national insurance contribution. and from business activities at the There are three alternatives: same time or in different periods, it Employers must either have a  65 per cent of the ordinary income is the combined income that forms defined contribution or a defined from day 1 if you pay an additional the basis for calculation of the benefit pension scheme. Defined insurance premium of 1.8 per cent illness benefits. benefit schemes provide pre-defined  100 per cent of the ordinary income benefits, usually a certain percent- from the 17th day if you pay an age of the members' salary on additional premium of 2.7 per cent Maternity benefits retirement. In defined contribution schemes, employers pay a pre-  100 per cent of the ordinary income Parental benefits: Self-employed defined annual contribution. from day 1 if you pay an additional receive parental benefits calculated Defined contribution schemes are premium of 10.0 per cent. on the average pension- offered by banks, life insurance (Rate per January 2012) accumulating income over the last companies, pension funds and three years of income. Parental companies that manage securities Regardless of the ordinary income, benefit amounts to 100% of the funds. Defined benefit schemes are the upper limit for illness benefit is calculated income base. offered by life insurance companies set to 6G, where 1G is the National Information about the scheme is and pension funds. Insurance basic amount (of money) available at the local office of the Employers will pay contributions used for calculating benefits from Norwegian Labour and Welfare into the scheme every year, so that the social services. In 2011, 1G Organization (NAV). employees earn pension entitle- equals NOK 79 216 per year. ments. The contribution must be at

least two per cent of the employees' If you suffer some kind of occupa- Mandatory occupational earnings between 1 G and 12 G in a tional disability within four weeks pension defined contribution scheme. A from the date the social services The duty to have an occupational corresponding requirement applies received your application for pension scheme applies to to defined benefit schemes. In inclusion in the national insurance companies, both taxable and tax- addition to the contribution, the scheme, you are not entitled to the free, with man-labour years above a pension scheme shall also contain compensation or social benefits certain minimum level. The duty an insurance element that ensures normally covered by the insurance applies to companies that have: that employees continue to earn scheme. pension entitlements in the event of The premium for the insurance  at least two persons who both have disability. It is permitted to exclude is deductible on your tax return. working hours and wages that employees under the age of 20 and represent 75 per cent or more of a those in part-time employment of full time position,  at least one employee, without less than 20 per cent of a full-time Calculation of the basis for ownership interest, who has position from the pension scheme. illness benefits working hours and wages that Employees may be required to also The basis for the illness benefits represent 75 per cent or more of a contribute to their own pensions, will normally follow the income full time position, or but such contributions will not defined as the basis for calculation reduce the minimum requirement  persons, who each have working of pension points. The benefits are for employers' contributions. hours and wages that represent 20 then calculated on basis of the Employers are also obliged to cover per cent or more of a full time average pension points for the last the costs of administering the position, and together carry out pension scheme.

The main rule is that pensions shall be paid for at least 10 years from the age of 67 years. The size of the annual pension will depend on several factors. In contribution schemes, pension payments will depend on the size of the contribution, the number of years contributions have been paid, the return on the pension assets and the length of the period during which a pension is paid. In defined benefit schemes, the pension will normally be stipulated as a certain percentage of the employee's salary on retirement. The size of the annual pension will therefore depend on how many years the employee has worked and his/her salary on retirement.

Employment

An employer in a private enterprise restaurants in the summer, are Organization (NAV) will then may employ whom he/she wants. allowed. contact you. Later on, you must Nevertheless, the Employees Act  Temporarily appointed workers send a new notification whenever has some rules that must be obeyed. must not perform the ordinary an employment starts or ends. The employer cannot demand running of the enterprise. General Remember that you have to the applicant to give information variation in the market, e.g. the register yourself as an employee if concerning political, religious or flow of orders, will not be a reason you work in your own limited cultural questions or if he/she is a for appointing someone tempo- liability company. member of any employees' rarily. But if unexpected situations Note also that you have to establish organizations. As a general rule, occur that will cause temporary work hazards insurance for all the questions concerning sexual increase in the quantity of work, employees. orientation or partnership are temporary appointments may be prohibited. However, if such allowed. information is related to the nature  Working as a trainee – education in The Employee Register of the occupation and of importance a profession. The forms used for registration in for the work, the applicant may be  Working as a substitute. – The the employers’ and employees’ asked to give information about stand-in must be hired for registers are obtained from the this. replacement of specific persons and Norwegian Labour and Welfare If a trial period is agreed upon, incidents, e.g. illness, holidays or Organization (NAV). Alternatively, this agreement must be written and leaves of absence. you may submit the form via the trial period shall not last longer www.altinn.no (in Norwegian). than 6 months.  Participants in unemployment The forms must be returned no For work in a public limited programmes run by or in co- later than the Friday following the liability enterprise, the Administra- operation with the labour market start or termination of the tive Act applies in addition to the authorities. employment. Working Environment Act. For  The company manager may be A notification of employment employees of the national appointed fore a set number of must be sent when the work relation authorities, the Civil Servants Act years. is expected to last more than six may also apply. The Equal Status  Some jobs within sports – days and consist of on average at Act also contains regulations sportsmen, trainer, referees and least three hours of work per week. concerning appointments. other leaders within the sports. The employer must also inform The main rule is that the  Work within art, research or sports about any changes in the name, employee shall be permanently with tariff agreements agreed upon address and location of the appointed. between a national employees' business. Temporarily appointed working organization and the employer. All notifications to the NAV agreements are agreements that are office must include the organization valid for a stated period of time or a The working agreements will end number of the business. stated work that is of an incidental automatically when the time limit You cannot employ foreign nature. If someone is appointed agreed upon is reached or the work persons unless they have work temporarily, it is a premise that the is completed, if not otherwise permits. conditions for temporarily agreed upon. Following the Working appointed working agreements are Environment Act, there are present. limitations as to what types of work Temporary appointment is Registering the employee may be done by persons between allowed in the following situations: If, at the time of registration in the the ages of 13 and 15 years.  When the work is of a temporary Persons under the age of 16 nature or is separated from the Central Coordinating Register for Legal Entities or the Register of years cannot work between 21:00 ordinary work that normally is done and 07:00, while people between in the enterprise. This may be Business Enterprises, you know you will employ people, you should the ages of 16 and 18 years cannot season work, e.g. within the food work between 23:00 and 06:00. industry and tourism. mark the “yes” (“ja”) box of the Coordinated register notification.  Temporary appointments for The local office of the  Remember that you have to picking soft and hard fruits, guiding Norwegian Labour and Welfare register yourself if you work in a tourists, serve at outdoors your own company of limited liability

Employment contract submit a record sheet in two copies Obtain the advance tax Before wage/salary to There shall always be a written deduction cards from is paid or prepay- Skatt Vest, Foreign Tax Affairs working agreement, regardless of the employees ments are made Department. the time limitations of the work. Establish a tax deduc- Before the first The Norwegian Labour The deadlines for submitting the tion account in a bank salary is paid Inspection Authority can give periodic returns and transfer of Give the employees a Every time the advice and information regarding taxes are: wage/salary receipt wage/salary is paid rules and regulation. showing the deducted

taxes Tax Period report/pay- Establish a personal At the first calcula- Employers’ deduction of ment by account in the tion of wage/salary withholding tax January/- business accounts for The employer must calculate the March 15 February every person receiving amount of tax to be withheld from wage/salary the employee’s salary/wage. The March/April May 15 Deduct taxes from the Every time the basis for the tax deduction is all May/June July 15 kinds of wages and other wages (PAYE) wage/salary is paid remuneration in cash, including July/August Sept. 15 Work out and submit The 8th day after allowance for working abroad, September/- periodic return for the end of each Nov. 15 stand by allowance (as well as October advance tax deduc- period. The 15th wages during an off-duty period November/- Jan. 15 (next tions/calculation of day for the 6th. relating to work performed in December year) payroll taxes period Norway or on the Norwegian Payment of advance The 15th day after Continental Shelf), holiday pay and If tax withheld is not paid when tax deductions and the end of each bonuses. Payments in kind due, a penal interest will be calculated payroll tax period according to rates stipulated by the charged. There is also a legal right Prepare wage- and tax Before January 20 Tax Directorate, such as free to distrain on subcontractor’s housing, free car or living deduction overviews of the year after the outstanding claims with the for the employees and wages/taxes in allowances, must also be included contractor. in the basis for tax deduction. submit accompanying question letter/annual report

If the employer has arranged net- wage for the employees working in Responsibility Deal with the local office of the Norway (i.e. the employer will The employer is responsible for Norwegian Labour and Welfare cover all Norwegian taxes), a gross deduction and transfer of the Organization (NAV) in connection wage has to be calculated on basis amount of taxes withheld in with the following tasks: of the net-wage before calculating accordance with the rules and the amount of taxes to be withheld. regulations in force. If this is not Deadline done, the employer will be held Notify the employee The first Friday after responsible for taxes that should register about the employer/- have been withheld. Failure to How to report and pay the employee entry/exit employees relation comply with these regulations may taxes withheld has changed result in criminal liability. The

A Norwegian employer is obliged obligations and the responsibility to submit a record sheet (periodic that follow from the Tax Payment return) to the Tax Office in the Act also apply to the contractor/- municipality where he is registered principal in Norway. with head office (head office municipality). Duties Foreign employers (i.e. employers Deal with the Tax Office in not resident in Norway) will be connection with the following registered with head office in duties: municipality 2312 - COFTA. The Deadline employers in question are obliged to

Taxation

the income from previous years. 28 per cent. Ordinary income is New sole proprietors must contact defined as gross profit minus all the Tax Office in order to determine expenses related to the business the advance tax. activities, including depreciation for tax purposes.

Taxation of general A limited liability company pays partnerships (ANS or DA) the tax the year after the profit is generated. General partnerships are not

subjected to tax themselves. The As shareholder in the company you Sole proprietorship (Self- owners/partners will be taxed for may be subjected to taxation in two employed business) their part of the profit, or, if a loss forms: The owner of a sole proprietorship is suffered, may deduct the loss 1. You are employed by the is responsible for the obligations of from their income. company and receive normal the business. He/she is taxed for the compensation (wage/salary): assets as well as the profit of the Partners working in the company Your wage plus social security business enterprise. pay ordinary income tax on their expenses are treated as expenses in income. Such income reduces the the company's profit and loss A profit from the business activities profit of the company. The profit is statement. You yourself are is transferred to the owner's subjected to a tax rate of 28 per regarded as a tax payer according to personal tax return and is added to cent. Withdrawals of any kind are the current regulations. other income if such income exists. subjected to the same tax rate (28 2. Taxation of the share dividends Also the value of the enterprise’s per cent). from the company, i.e. the part of assets is transferred to the wealth the earnings paid to the share- part of the tax return. If the Before the additional tax on holders. enterprise suffers a loss, the amount withdrawals is calculated, the tax is deductible from the income. that results from the company’s profit and a so called shielding The personal income of the owner deduction is subtracted from the of the sole proprietorship is withdrawals. The shielding calculated independently of his/her deduction is defined as the direct contribution to the result of shielding interest multiplied by the the business enterprise. The shielding basis. The shielding personal income forms the basis for interest is fixed for each year by the calculation of the social security Ministry of Finance. The shielding contribution and possibly additional basis is either the value of the tax if the income exceeds the level partner’s capital or valuables fixed for the year in question. invested in the company by the end of the year, the partner’s nominal If the spouse of the owner works in capital investment or the partner’s the company, he/she is not entitled part ownership of the company’s to wage or salary. Instead, the profit own capital as determined for tax or loss is divided between the purposes. spouses. Each spouse’s part depends on assessment of the contribution in terms of work load. Taxation of limited companies and shareholders The owner of a sole proprietorship Limited companies are defined as is subject to payment of advance legal entities and as such subjected tax. The tax is paid in four terms to to taxation in the form of company the Municipal Treasurer (the tax tax. collector’s office). The tax Profit is taxed as "ordinary authorities in the municipality income" and the tax rate is a fixed determine the advance tax based on

Mandatory Licences etc.

Some types of businesses require Contact the municipal administ- Building licence special licences. Some of these ration for further information. In order to raise a new building licenses are described in this or do other building jobs, such as section. altering the facade, erecting a new

Transport business supporting wall or demolition of a Authorization To start and run certain types of building, an approval is needed Some types of businesses require such businesses requires a licence. from the municipality. Approval is that the owner or responsible person Application is submitted to the also necessary in order to alter the has the required authorization. Such transport board of the county. usage of a building, e.g. converting authorization is required for: Licensed businesses include: from living quarters to offices.  Driving instructors  Taxi driving If in doubt about the necessity of  Doctors  Ambulance driving an approval, you ought to contact the building authorities of the  Physiotherapists  Buses and other types of public municipality before any building transport  Auditors job is commenced. An application

 Accountants for licence will be processed within

 Lawyers a period of a few weeks to several Currency regulations  Stock brokers months.

 Bond brokers Payment abroad When money is transferred between  Real estate brokers Identity cards in the building Norway and a foreign country, a and construction industries declaration of payment (betalings- The introduction of identity cards is melding) must be filled in. The a measure aimed at achieving more Travel agencies, travel currency bank fills in the form, but efficient control of employees’ organizers etc. the customer is responsible for the health, safety and working To run a business arranging travels, validity of the contents of the environment as well as greater you are required to raise guarantees declaration. The bank is required to accountability in the construction consisting both of individual and demand proof of identity from the industry. collective guarantees. Questions customer when the amount of related to travels and travel guaran- money transferred abroad exceeds All enterprises, whether Norwegian tees are directed to the Reisegaran- NOK 10 000 and NOK 40 000 to or foreign, performing work on tifondet, in charge of administering Norway. If the transfer exceeds building and construction sites are the required guarantees. NOK 60 000, the customer is required to issue ID cards to their required to divulge the cause of the employees. The ID cards must also payment. be used by sole proprietorships Catering businesses (self-employed enterprises). Foreign bank accounts In order to run a catering business, Employees of foreign enterprises such as café or restaurant, you must When an account is established that operate in the building and have authorization from the muni- abroad, the Norwegian Bank construction industries in Norway cipality where the business is (Norges bank) must be notified. All must also carry ID cards. If located. The local branch of The transfers to and from the foreign employees are hired through an Norwegian Food Safety Authority account must be reported to the agency, it is the recruitment agency (Mattilsynet) must accept the Norwegian Bank. In addition, you that must ensure that the hired premises and the business, before are required to declare, in writing, employees have been issued with authorization is given. Also, the that the foreign bank may submit ID cards. manager cannot have a criminal information about the account to the record. Norwegian Bank. The requirement even applies to Further information may be personnel who perform support Licence to serve alcohol requested from the Norwegian functions such as cleaning, catering Bank. Serving alcohol for payment etc. where such support functions

requires a special licence from the are permanently established at the

municipal authorities. The licence is building or construction site. Also

given to each place individually. people who transport goods to the

site must be issued with ID cards if administration for further such transport takes place on a information. regular basis. If you are running a business as hairdresser, bricklayer, carpenter Condition for the issuing of ID etc., you may get some financial cards support for hiring apprentices. It is a condition for the issuing of Contact the local jobcentre (NAV) ID cards that the enterprise and for further information. employee are registered in the relevant public registers. The relevant registers in this context are:

 The Central Coordinating Register for Legal Entities  The VAT Register  The NAV State Register of Employees and Employers  The Central Office for Foreign Tax Affairs (in Norwegian)  The National Population Register (in Norwegian)

Information about which registers the individual enterprise or employee is obliged to register with can be obtained by contacting the individual registers or the Service Centre for Foreign Workers in Oslo.

The ID cards are issued by Oberthur Technologies, which is also charged with the task of checking submitted information on behalf of the authorities. An ID card will only be issued if the applicant is correctly registered in the relevant registers. You can order the ID cards here: https://www.norsik.no/byggekort/

Schemes for entrepreneurs Many municipalities have established local schemes for entrepreneurs. Contact the local

Import and Export of Goods

It is the duty of the Customs and The goods cannot be used or Information from the Excise authorities to charge custom exported before the customs office Directorate of Customs and duties and taxes as well as control has approved by giving the Excise all import and export into and out of transaction a dispatch- and serial The customs authorities have Norway. Accordingly, there is a number. produced their own handbooks number of rules that must be The customs authorities will in related to import and export of adhered to. each case decide if and to what goods. The actual customs transaction extent the goods shall be checked. These handbooks, found on the is based on the principle of personal The check may be in the form of Internet pages of the directorate declaration. This means that the document check, physical check of (www.toll.no), are in Norwegian importer/exporter declares the the goods and/or check of the only. goods to the customs authorities by owner’s/exporter’s books. Contact the nearest customs an electronic (EDI) transfer to the office for further information. TVINN system, i.e. the customs authorities’ central information system for the businesses, or by  Remember to contact the customs filling in the Single Administrative office when goods are imported or Document (SAD). exported. On the authority of the  It is your responsibility to make sure Norwegian Directorate of Customs all current regulations are followed. and Excise, some importers,  You may avoid many problems if exporters and transport agencies are you check out the regulations allowed to carry out the customs before the transaction takes place. dispatching.

Business Plan

Before you start starting a business is right for you. often stated in competitive terms. And in the critical, early days when For instance, the vision of General You are contemplating starting your the business is established, the plan Electric is "We bring good things to own business. In that case, there are will reduce the risk for failure. life". The mission statement is the a number of considerations to be vision translated into written form. made before the enterprise is a Do not make the plan more volumi- We will argue that for the reality. nous or complex than necessary. majority of companies, having Imagine you are about to start on However, the business plan must, vision and mission statements a sailing trip and there are many with respect to contents and layout, changes nothing. The value is islands and rocks in the area. If so, be a high quality product. If limited, unless the company it is vital that you know where you presented to a financial institution, owners, management and executi- are, where your destination is and Innovation Norway or others, the ves live the vision, are seen to live how to navigate to get there. Also, executive officer will notice if the the vision and constantly you must consider what equipment plan is thoroughly prepared and communicates the vision to the you need for the trip. realistic, if all parts hang together, employees. In the business community such if you have covered all aspects, if However, what you do need is a “travel documents” are called a the market analysis is realistic, if clear, well defined business idea, business plan. Thus, the business your budgets are correct - and i.e. a statement telling what you plan is a document that describes finally, if the plan's layout and intend to do (your products/- your business idea and how you design are attractive. services) and where to do it (your intend to run your business. There is no denying that writing marketplace).

a comprehensive business plan is a  The Business Plan outlines the challenging exercise. We will business idea and how to achieve recommend that you invest con- Marketing your goals siderable time and effort in making The key to marketing is under- it as accurate as possible. The standing your customers. You must All experienced entrepreneurs agree reward is a document that gives you be able to profile your target that the process of writing the necessary insight both in the customer and his/her likes and business plan is the best method to business idea itself and the potential dislikes accurately. This will help reach a decision on whether to start in the market place. you understand how to position the up or not. A business plan is also Furthermore, we strongly product in the marketplace and how vital to the success of the new recommend that you write the plan to price the product. You should business. The plan is your tool in yourself. It is tempting to engage also be aware of how your customer dialogue with banks, investors, professional consultants for the job, base is likely to change over time, cooperation partners and possibly but the plan should be your achieve- whether it is declining or growing. public support organizations such as ment, reflect your aspirations and Do your planning properly: Innovation Norway13. The plan give your points of view. However, Collect facts, analyse the data, includes all that is necessary for if you need professional advice on make some strategic decisions others to decide if it is worth while certain aspects, e.g. the product's about the market and express your to support your activities towards market potential, patents etc., don't goals. Also, express how you intend your own enterprise. Do not copy hesitate to seek assistance. In fact, it to reach these goals. An analytic from others. This is your plan, - may prove productive to have approach is to do a realistic SWOT your ideas should be reflected. someone to talk to during the (strengths, weaknesses, Note that the business plan in process, - someone to test your opportunities and threats) analysis essence is a prediction or a ideas on, who is willing to provide of each market segment and/or simulation that reveals elements / friendly advice and criticism. product. You will probably aspects that helps you decide if experience that the final plan

requires a fair amount of iteration. 13 Vision, mission statement and You are likely to detect areas of Innovation Norway is an organization business idea that promotes nationwide industrial concern that influence earlier development profitable to both the The vision is a short, succinct and decisions, thus having to go back business economy and Norway's preferably inspiring statement about and make amendments. national economy. what the enterprise intends to www.innovasjonnorge.no achieve at some time in the future,

Further advice accurately as possible the product’s approach. The more you know unique properties. about your customers, the easier to  Write correctly! Use a language that How to produce or manufacture direct the marketing activities is easily understood and have the product? If you are going to sell precisely. someone proof reading the plan. If services, describe the essence of the You should produce a market you have to include difficult or not service and how it will be produced. plan in order to describe how you commonly used terms, explain the If someone is going to assist you in will make you and your meaning, for instance in footnotes. the delivery of the service, this products/services known to the  Make sure the business plan is well- should be included in the business customers. A market plan is meant structured and easy to navigate. plan. to serve as a statement on how  Do not include too many details. Are you producing all parts of much work and money you are Detailed market analyses, budgets the service yourself, or will all or willing to invest in order to: etc. may be given as appendices. parts of the production be handled  Influence potential customers to  Refer to sources and documentation by others? Make sure to describe buy your product. where relevant. This is particularly accurately what sub-contractors you  Find partners in order to reach your important when you argue the intend to use. customers. market and economic potentials. 4. The Market We suggest that you start by listing Description of the market and what products and/or services you The different sections of the potential customers is an important will offer and what market business plan part of the business plan. Try to segments you want to attract. In give short and concise answers to For your benefit, we have published section 9 of the before mentioned the questions in the business plan a business plan template (MS Word template, the two conditions are template (see below). format), guidelines to the template entered into a product/market You should know the purchasing and budget plus cash flow matrix. criteria of your customers. calculation tools (MS Excel-format) Next you list the actual market Purchasing criteria are the features on www.bedin.no. activities you have to apply to reach the customers value when they the different market segments. Enter select a provider of a certain type of 1. The Business Idea the activities in an action plan product or service. Your ability to (section 10 in the business plan Start by describing your business satisfy the most important criteria idea, the products and/or services template) and calculate how much will determine if you are the chosen resources you have to invest in you intend to offer and the market provider. You have to be at least as needs that will be satisfied. these activities. good as your competitors in Also describe how you will sell Next proceed to the basic satisfying the essential purchasing information relevant for your your products/services, e.g. direct criteria. Such criteria may be sale or through distributors. business. design, functionality, the provider’s

trustworthiness, service and follow 6. Finances 2. Personal Information up, personal relations, price, If you have an up to date curriculum For simple paper based calculations delivery time and accuracy, you may use the forms provided in vitae, it may replace some of the availability etc. Ask potential details in the section. However, it is the business plan template (see customers what they are looking for www.bedin.no). very important to include informa- when they buy the type of product tion on the expertise, knowledge If you wish to produce more or service you are going to offer detailed calculations, the Bedin and experience possessed by you and evaluate your ability to satisfy and/or people in your network that website offers additional guidelines, these criteria compared to 2 - 3 of however in Norwegian only. Select will enable you to start and run the your most important competitors. enterprise. "Guider", followed by "Budsjettguiden". 5. Marketing and Sales Activities 3. Products/Services How to make the customers know Describe the products and/or you exist? By advertising,  Check if the municipality has local services your enterprise will offer. brochures, personal sale or other schemes for people who want to Try to focus on and describe as methods? You and your associates start their own business are important assets in the market

Tax Authorities

Tax authorities organisation Tax office: tel. +47 80 08 00 00. There is one Tax Directorate (in Oslo) and tax offices in five regions. All tax issues are handled The Central Office - Foreign Tax by these offices. Affairs (COFTA, tel. +47 51 96 96 For the tax payers this means: 00) is now a unit of Skatt vest (Tax  They only have to deal with one West). office, whatever the nature of their enquiry. In addition, the Chief Municipal Treasurer (kemneren/kommune-  They will find all services at the kassereren) collects ordinary taxes local office that has replaced the including contributions to the former Tax Assessment Office national pension scheme and (ligningskontoret). payroll taxes on behalf of the  All tax offices, irrespectively of municipality and the state. where they are located, can deal with all enquiries. Thus, we will refer to the tax authorities as the Tax Office. A single telephone number, 800 80 000, free of charge from land lines in Norway, is used to answer all questions.

The five regions are as follows:  Skatt nord (Tax North) comprising the counties Nordland, Troms and Finnmark. Regional management in Tromsø.  Skatt Midt-Norge (Tax Central Norway) comprising the counties Nord-Trøndelag, Sør-Trøndelag and Møre og Romsdal. Regional management in Trondheim.  Skatt vest (Tax West) comprising the counties Sogn og Fjordane, Hordaland and Rogaland. Regional management in Bergen.  Skatt sør (Tax South) comprising the counties Vest-Agder, Aust- Agder, Telemark, Vestfold and Buskerud. Regional management in Skien.  Skatt øst (Tax East) comprising the counties Oslo, Akershus, Østfold, Hedmark and Oppland). Regional management in Oslo.

Each region is organised in five functional units: Guidance, tax assessment, control, tax oriented criminality and tax collection.

Glossary

This glossary gives brief explana- Tax on gross income (Bruttoskatt) copy to the employee or recipient of tions plus the Norwegian terms and The tax on gross income comprises pension or benefit. phrases of some of the terms used in surtax and National Insurance this document. contributions, and is calculated on Value-added tax (VAT) In particular, terms used in relation personal income. (Merverdiavgift (moms)) to taxes are not always easy to VAT is an indirect tax on most understand. Some of those goods and services. explained here are used in the Property tax (Eiendomsskatt) document, but not all. However, A municipal tax on different types you are likely to come across others of property. The municipality itself Net tax (Nettoskatt) in your dealings with the tax decides according to specific rules Tax charged on general income. Net authorities. whether or not to impose property tax includes tax to the municipality tax and the size of the tax. and county as well as national

Taxation income tax to the state. Wealth tax (Formuesskatt) General income (Alminnelig inntekt) Wealth tax is charged on net wealth. General income is the sum of all VAT return (Omsetningsoppgave) Gross wealth includes cash, bank taxable pay, income from self- Statement sent to the tax authority deposits, shares, fixed assets, employment and capital income less (data input centre) by a business private cars, assessed value of real standard deductions and certain enterprise or self-employed person property, etc. Net wealth is equal to expenses with the exception of liable for VAT showing the amount gross wealth less debt. A certain special deductions. Normal of VAT to be paid to or refunded by proportion of wealth is tax-free. deductions are the minimum the state. VAT returns can be Wealth tax is divided between the standard deduction (minstefradrag), delivered electronically via the municipality and the state. deductions for travel between home Internet. VAT returns are dealt with and the workplace, child-care by the Tax Office. deduction and interest on debts. Tax certificate (Likningsattest) The tax certificate accompanies the Pension points (Pensjonspoeng) Advance tax (Forskuddsskatt) tax settlement notice. It shows The pension points are awarded as a general income and wealth, tax Self-employed persons pay tax in function of the income defined as class and personal identity number. advance four times a year. These the basis for calculation of future In the case of married persons, it advance tax payments are calculated pension. This means that not all of also shows the spouse’s general on the basis of expected income. the general income serves as basis income, wealth, tax class and Some wage-earners and pensioners for the calculation. personal identity number. with low income and high wealth or Persons from 17 to 69 years of age capital income also make advance may have income as mentioned tax payments in addition to tax Certificate of pay and tax deducted above, based on employment or deductions from pay or pension. (Lønns- og trekkoppgave) self-employment. The number of Capital income includes income The certificate of pay and tax pension points decides the amount from interest and property rental. In deducted is filled in by the of additional pension received from the case of wage-earners and employer. It shows what the the National Insurance Scheme. pensioners who pay advance tax, employee has received in pay and the amount is printed on the tax other allowances, such as Personal income (Personinntekt) deduction card. subsistence allowance, company Personal income may consist of

car, etc. during the course of the pay, pensions and/or personal Employer’s contribution year. It also shows the total amount income from active participation in (Arbeidsgiveravgift) of tax deducted. The certificate of business activities. National pay and tax deducted shall be sent Employer’s contribution is paid by Insurance contributions and surtax to the tax authorities by the employers to the National Insurance are calculated in relation to personal employer or remitter of pension or scheme. It is calculated on the basis income. benefit by 20 January (31 January if of gross pay and allowances. submitted electronically via

www.altinn.no) of the year following the income year with a

Surtax (Toppskatt) Register of Business Enterprises Central Coordinating Register of A national income tax charged on (Foretaksregisteret) Legal Entities (Enhetsregisteret). personal income exceeding a certain The Register of Business amount. Enterprises registers all Norwegian Personal tax return (Selvangivelse) and foreign business enterprises in Norway. The personal tax return is submitted (www.brreg.no/english/registers/bu on a yearly basis. It is a statement siness/) of your income and wealth and serves at the basis for the tax authorities’ calculation of your VAT Register taxes. (Merverdiavgiftsregisteret) A register of all VAT eligible Business enterprise return entities. The register is maintained (Selvangivelse for næringsdrivende by the tax authorities.

The business enterprise return is the company’s statement of profit and Personal and organizational loss in the last financial year. For Identity sole proprietors, the business Personal identity number enterprise statement is the basis for (Fødselsnummer) calculation of the personal income All persons registered as resident in of the owner, regardless of actual Norway are allocated an eleven- withdrawals from the company. For digit personal identity number. The sole proprietors the business first six digits show the date of enterprise return covers all aspects birth. The next three digits are necessary to calculate the taxes for individual identification numbers. the owner. They distinguish between persons born on the same date, indicate the National Insurance contributions century in which the person was (Trygdeavgift) born and the sex of the person. The The contributions to the financing last two digits are control digits. of the National Insurance scheme are calculated on the basis of D-number personal income. Different rates The D-number is a substitute for the apply for pensions, pay, and personal identity number held by all personal income from self- Norwegian citizens. The number is employment. necessary for all foreign persons holding positions in enterprises Organizations - Registers registered in Norway. Central Coordinating Register for If a D-number has not been Legal Entities (Enhetsregisteret) allocated, the Central Coordinating Register for Legal Entities will The Central Coordinating Register requisition one from the Norwegian for Legal Entities registers basic National Census Register data about legal entities to (Personregisteret – Skatt nord). coordinate information on business and industry that resides in various public registers. Organization number (/www.brreg.no/english/registers/en (Organisasjonsnummer) tities/) Nine-digit number used to identify companies, other legal persons and sole proprietorships. Organization numbers are allocated by the

Who can tell… The following gives you references to organizations/offices that will answer questions on the listed matters.

Question concerning Where Illness benefits of the National The local NAV office insurance scheme (Sykepengeordningen I folketrygden) The Working Environment Act The regional office of the (Arbeidsmiljøloven) Norwegian Labour Inspection Authority The Labour Dispute Act The Working Environment and (Arbeidstvistloven) Safety Department of the Ministry of Labour and Social Inclusion The Labour Court - in case of legal dispute The State Mediator - in case of conflict of interests The Annual Holidays Act The regional office of the (Ferieloven) Norwegian Labour Inspection Authority The Guaranteed Wages Act The Directorate of the Labour (Lønnsgarantiloven) Inspection Authority Temporary Layoff (Permitteringer) The local NAV office Occupational Injury (Yrkesskade) Insurance companies The Occupational Injury Insurance Association (Yrkes- skadeforsikringsforeningen) Social benefits and questions related The local NAV office to social security insurance The Payroll Tax / Employers The Tax Office Contribution Taxation The Tax Office Questions related to business or The Tax Office earning of wages Questions related to payment of The Chief Municipal Treasurer advance tax and payroll tax (Kommunekassereren) VAT The Tax Office