Article 3 minute read

Challenges of doing business in Norway

22 May 2018


While Norway is known as one of the easiest countries in the world in which to do business, there are some challenges that those new to the market should be aware of.

Countries:

Norway has vast natural resources, wealth and a healthy economy, with one of the highest GDPs per capita. Norway’s economic performance is strong it is due to its natural resources, resulting in challenges when it comes to starting other types of businesses in the country.

Here are some key difficulties that you may face when setting up operations in Norway.

1. Location

Norway is a large country but it lacks metropolitan areas of global importance. This can be a real problem for businesses that choose to set up in the country. While business is conducted in smaller cities, many employees tend to live further outside the cities. Transportation to and from work can be a challenge.

2. Business culture

Norwegian business culture is based on Norwegian (Scandinavian) work values. One of the main values is a focus on equality. You will experience little hierarchy, flat structures and informal communication between while doing business. Depending on your business and its goals, this environment could prove difficult to navigate.

3. Employees and benefits

The Social Security tax in Norway is quite high for employers at a contribution rate of 14.1%. It is not always easy to find quality employees because there is a historically low unemployment rate for the small population of the country. This results in an ‘employees’ market’, with high salaries on offer.  Businesses operating in Norway must also offer a pension plan and to entice employees, it should be competitive.

4. Transferring money from Norway

There are limits to the amount of currency you can bring in and out of the country. Currently, the amount is 25,000 Norwegian Kroner (about £2,500). Any larger amounts must be declared at Customs. Exporting more than the set limit of currency from Norway has to be approved in advance by Norwegian Customs and then transferred through a bank.

5. Business registration

Everyone that conducts business in Norway must register with the centralised Registry at Brønnøysund. The business will receive a Norwegian ID number, called an ‘organisation number’ or ‘org.no.’ This number is required for contracts, invoices and any communication with authorities and governmental organisations.

6. Employee ID numbers

All employees must obtain a Norwegian personal ID number (also called a ‘D-number’) prior to starting work. Employees are not able to get this number online but must go in person to the tax office.  Employers must also file reports to the tax office when new foreign employees start working.

7. Employee permits

Employees from a country outside of the EU who will be working in Norway, must obtain a residence permit that covers the right to work. There are different categories and employees of multinational companies will usually be categorized as ‘skilled workers.’ The application for this permit must be accepted before work can begin in Norway.

8. Tax registration

While no specific corporate tax registration exists, the tax office has access to the Registry at Brønnøysund. It is expected that all entities comply with reporting obligations and file a tax return.

9. Not an EU member

Norway is not a member of the European Union (EU), but is a member of the European Economic Area (EEA). Norway acknowledges the same trading code practice as the EU. This can cause certain challenges due to import and customs restrictions.

10. Bank accounts

When setting up in Norway, every new company must have a bank account. To open a business bank account, there is a KYC process and many steps needed to verify your businesses intentions.  This process can take up to a month so it is pertinent to plan for this challenge.

TMF Norway

TMF Group employs more than 60 professionals across three Norwegian offices located in Oslo, Stavanger and Drammen. We service a diverse portfolio of sectors, including oil and gas, real estate, mining, production and biotech. Our local experts provide accounting, tax compliance, corporate secretarial and HR and payroll services.

We can get your company set up, provide a single point of contact and take care of those non-core elements that keep your business moving, while you focus on developing your business.

Get in touch with us today discuss how to grow your Norwegian business.

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