Starting a business in Norway – corporate vehicles
This guide provides an introduction to the main corporate vehicles available to foreign investors when starting a business in Norway. The guide is not exhaustive and focuses on private limited liability companies and branch offices, the two corporate vehicles most commonly used by foreign investors.
Choosing the right type of corporate vehicle for your investment
Choosing the correct corporate vehicle to conduct your business is the most important decision you make as an investor and this choice affects:
- How much personal risk you have (liability)
- How you pay taxes
- What rules you must follow (regulatory obligations)
- How the business is managed (governance)
- How easy it is to bring in new investors or sell the business later
Overview of corporate vehicles available to foreign investors
Sole proprietorship (“Enkeltpersonforetak” or “ENK”)
- Owned and operated by one person.
- The business is not a separate legal entity, so the sole owner is personally responsible for all debts and obligations attaching to the business.
- The owner cannot be an employee of their own business and thus, social security rights are more limited for the owner than for regular employees.
Co-operatives (“Samvirkeforetak” or “SA”)
- Owned and run by its members for their shared financial benefit.
- The main goal is to support the members’ economic interests, not make any profit to outside investors.
- There is no minimum capital requirement, but the co-operative must always have enough equity to be financially sound. Profits can be shared among the members based on how much they use the co-operative and not just based on how much money they invested.
- Usually, co-operatives cannot be bought by outside investors.
General partnerships (“Ansvarlig selskap” or “ANS/DA”)
- Owned by two or more people and/or companies, known as “partners”.
- All partners are personally responsible for the business’ debts.
- In an ANS, all partners share responsibility for all debts (joint and several liability).
- In a DA, each partner is only responsible for a set share of the debts.
- There is no minimum capital requirement, but creditors can demand payment directly from the partners.
Norwegian branch of a foreign company (“Norskregistrert utenlandsk foretak” or “NUF”)
- A NUF is a branch of a foreign company operating in Norway and is not a separate legal entity, so the foreign company remains liable for all its Norwegian obligations.
- If a foreign company does business in Norway, it must usually register in the Norwegian Register of Business Enterprises (Nw. “Foretaksregisteret”).
- If the branch only needs a Norwegian organisation number and does not do business, it can register in the Central Coordinating Register for Legal Entities (Nw. “Enhetsregisteret”).
- The branch must have a contact person in Norway with a Norwegian ID number or D-number.
- NUFs are often used for single projects or when the Norwegian activity is just an extension of the foreign company.
Joint ventures (“JV”)
- Especially common in the oil and gas industry in Norway and international research projects.
- Usually set up as a separate company (often an AS or a general partnership) or as a contract between companies and/or organisations and/or people.
- If not a separate company, the partners may still be personally responsible for its debts.
- Norwegian law has no dedicated “joint venture company” vehicle and the JV is governed and regulated by the parties’ JV contract.
Limited liability companies (“Aksjeselskap” or “AS” and “Allmennaksjeselskap” or “ASA”)
- Both are separate legal entities. The legal default position is that the shareholders’ liability is limited to their investment, and their personal assets are protected. However, in exceptional cases (e.g. severe misuse, significant undercapitalisation, or commingling of personal and corporate assets) the courts may decide to pierce the corporate veil to hold shareholders or directors personally liable.
- An ASA is designed for many shareholders and can be listed on a stock exchange. An AS cannot be listed.
- The minimum share capital is NOK 30,000 for an AS and NOK 1,000,000 for an ASA.
- The AS is regulated by the Norwegian Private Limited Liability Companies Act (Nw. “aksjeloven”), and the ASA is regulated by the Public Limited Liability Companies Act (Nw. “allmennaksjeloven”).
Key features – AS
- The AS is a separate legal entity and the most commonly chosen structure for new businesses.
- Minimum Share Capital: At least NOK 30,000 is required to start.
- Shareholders: Can have one or more owners.
- Management: Must have a board of directors consisting of at least one member. Must hold at least one general meeting per annum. Not required to appoint a general manger/CEO (if share capital below NOK three million).
- Regulation: Governed by the Norwegian Private Limited Liability Companies Act (Nw. “aksjeloven”).
Key features – ASA
- The ASA is designed for larger companies and may be listed on a stock exchange.
- Minimum Share Capital: At least NOK 1,000,000 is required to start.
- Shareholders: Can have one or more owners.
- Management: Must have a board of directors with at least three members. Must hold at least one general meeting per annum. An ASA must always appoint a managing director (unlike an AS with share capital below NOK three million).
- Regulation: Governed by the Public Limited Liability Companies Act (Nw. “allmennaksjeloven”).
Next steps
We regularly assist foreign investors with all legal steps required to register and operate businesses in Norway, including opening bank accounts, hiring employees, tax registration, IP registration, GDPR compliance and contract negotiations.
Contact us today for an informal chat on how to get started.
