Establishing a business in Norway: Choosing between NUF and AS
In this guide, you’ll be provided with an overview of the key differences between an AS and a NUF in Norway, including legal status, liability, taxation, accounting obligations, financial reporting requirements and the factors foreign businesses should consider when choosing between the two structures.
This article is part of our Doing Business in Norway guide.
Introduction
A foreign company entering Norway will typically choose between two structures: a Norwegian private limited liability company (Nw. “AS – Aksjeselskap”) or a Norwegian branch of the foreign enterprise (Nw. “NUF – Norsk avdeling av utenlandsk foretak”). The right choice turns on how the group wants to handle liability, capital, accounting transparency, tax exposure and administrative reporting.
What both structures have in common
Both an AS and a NUF can carry out commercial activity in Norway, obtain a Norwegian organisation number and register with the Norwegian Register of Business Enterprises. They are subject to the same Norwegian VAT rules: registration is mandatory once taxable turnover exceeds NOK 50 000 during a 12-month period. After registration, both must charge output VAT and may deduct input VAT on business purchases.
Both are subject to Norwegian bookkeeping obligations for Norwegian activities, and both must file an annual corporate tax return where income is taxable in Norway. The standard corporate income tax rate is 22% for both.
What is unique to the NUF
Legal nature and liability
A NUF is not a separate legal entity. It is the Norwegian branch of the foreign company and legally part of the same enterprise. It has no Norwegian share capital and no independent equity base. If the NUF cannot pay Norwegian creditors, those creditors may look directly to the foreign head office enterprise, because the branch and the head office are legally the same legal entity.
A NUF cannot be declared bankrupt in Norway. Insolvency proceedings must be pursued against the foreign enterprise as a whole, not the Norwegian branch in isolation.
Tax: permanent establishment and OECD Articles 5 and 7
A NUF does not automatically make the foreign enterprise fully taxable in Norway. Where Norway has a tax treaty with the home country, Norway’s taxing right is conditioned on the existence of a permanent establishment. OECD Model Tax Convention Article 5 defines when a permanent establishment exists; typically through a fixed place of business or a dependent agent. Article 7 limits Norway’s taxation to profits attributable to that permanent establishment.
For tax reporting, a NUF may also be required to submit a “regnskapsutdrag”, which is an extract of accounts documenting which projects and income streams are taxable in Norway and which are not. This is an important practical tool for allocating profit correctly between the branch and the head office.
Financial statement
A NUF is not subject to financial statement obligations if, during the financial year, the branch has not carried on business, has not been subject to tax under Norwegian domestic law, or has operated only temporarily in Norway and had turnover of less than NOK 5 million.
Where financial statement is required, both the head office accounts and the branch accounts may be filed. Only the head office accounts are publicly accessible and the branch figures remain outside public record. For foreign companies that do not want competitors to read the profitability of their Norwegian activity specifically, this is a significant practical advantage of a NUF over an AS.
What is unique to AS
Legal nature and liability
The owners’ liability is normally limited to the capital they have contributed.
Share capital and equity
An AS must have share capital. Equity is part of the company’s legal framework and is relevant for distributions, solvency assessments and the board’s duties if equity becomes inadequate. This is categorically different from a NUF, where no Norwegian share capital or equivalent legal equity exists.
Tax residency
An AS incorporated in Norway is a Norwegian tax resident and is, in principle, taxable on its worldwide income. There is no treaty-based permanent establishment analysis required and the company is subject to full Norwegian corporate taxation from the outset.
Financial statement and public filing
An AS must file financial statement with the Register of Company Accounts and these statements are of public record.
Which structure should you choose?
Choose an AS where banks, investors, employees or customers expect a Norwegian counterpart and you want a separate Norwegian legal entity with its own equity, governance and a clear separation from the foreign group.
Choose a NUF if the Norwegian activity is project-based, if the group prefers to keep Norway legally within its foreign enterprise, or if public reporting of Norwegian-specific results is a concern.
In our experience, Norwegian authorities apply a more pragmatic approach to NUF reporting obligations. They recognise that running a branch alongside an existing business abroad adds real administrative complexity.
Main differences: AS vs. NUF
Topic
AS
NUF
Legal Nature
Separate legal entity
Norwegian branch of the foreign enterprise
Bankruptcy
Can be declared bankrupt
Cannot be declared bankrupt; insolvency pursued against head office
Liability
Creditors usually cannot claim from shareholders or foreign parent
Creditors may claim against the head office enterprise
Share capital
Minimum NOK 30,000
Not required
Equity
Legal equity; relevant for distributions and solvency
No separate legal equity
Tax residency
Norwegian tax resident; worldwide income
Taxable only on profits attributable to Norwegian PE (OECD Art. 5 & 7)
Is bookkeeping required?
Yes
Yes
Financial statement obligation
Required
Required unless the NUF has not: carried on business; been subject to tax under Norwegian domestic law; and/or has operated only temporarily in Norway with turnover below MNOK 5.
Public financial statement
AS accounts are publicly filed
Required only if the conditions set out above are met.
Tax reporting
Annual corporate tax return; Deadline 31 May
Same as AS
Statutory audit
Can be waived if turnover < NOK 7 MNOK, balance < NOK 27m, < 10 FTEs
Same requirement applies as for AS
VAT registration
Required above NOK 50 000 turnover
Same threshold applies as for AS
Best suited for
Permanent presence, local contracts, full Norwegian entity
Project/branch activity under the foreign enterprise
Next steps
At Brækhus, we can guide you through the process of structure choice, registration, tax, VAT and reporting. Contact us today for an informal conversation about how these rules apply to your business.
