🚀 Starting your own business in Norway: ENK, AS and the paperwork you need

ENK or AS?

The two most common company forms are the sole proprietorship (ENK) and the limited company (AS). An ENK is easy to start and cheap to run. Legally, you and the business are the same person, and the profit is taxed as your personal income. The downside is that you are personally liable for all debts. If the business goes badly, creditors can come after your car and your house.

An AS is a separate legal entity. You must put in share capital of at least NOK 30,000, and the accounting is stricter, with annual accounts filed with the Register of Company Accounts. In return, your liability is in principle limited to what you have put in. Many start as an ENK to test the market and switch to an AS when turnover grows or the risk increases, for example when they are going to hire people.

Brønnøysund, Altinn and the organisation number

All companies are registered with the Brønnøysund Register Centre, located in the small town of Brønnøysund on the Helgeland coast. You do everything digitally through the «Coordinated Register Notification» in Altinn, logged in with BankID. There you choose company form, name, address and what the business will do. Once the registration is approved, you get a nine-digit organisation number.

The organisation number is the company’s identity. It must appear on every invoice, and customers often check it on brreg.no or proff.no before doing business with you. An AS must also be entered in the Register of Business Enterprises, and the share capital must be paid in and confirmed. Open a separate bank account for the business from day one, even if you have an ENK. It makes the accounting far easier.

VAT, advance tax and accountant

When your turnover passes NOK 50,000 within twelve months, you must register in the VAT Register. Then you add VAT to your invoices and send a VAT return to the Tax Administration (Skatteetaten), usually six times a year. In return you can deduct the VAT on what you buy for the business: tools, a van, materials.

As self-employed, no employer deducts tax for you. Instead you pay advance tax (forskuddsskatt) in instalments through the year, based on what you expect to earn. Set aside a fixed share of every payment in a separate tax account, and you avoid the shock when the back tax arrives. Most people use an authorised accountant (regnskapsfører). It costs a few thousand kroner a month, but a good accountant often saves you more than she costs, and you do not have to sit with receipts late into the night.

Help and advice

You do not have to work it all out alone. Many municipalities and counties have a start-up centre (etablerersenter) or free start-up guidance, where you can get help with a business plan, budget and choice of company form. The «Etablereropplæring» course runs in many towns, often in the evenings. Altinn also has its own «Start and run a business» guide with checklists.

Innovation Norway (Innovasjon Norge) gives advice and in some cases grants or loans, but the money tends to go to projects that are new and have growth potential, not to an ordinary hair salon. Oslo also has networks and incubators for founders with an immigrant background. Talk to others in the same trade. An experienced tradesman can tell you more about hourly rates and bad payers over one coffee than any website.

Construction, cleaning, transport and restaurants

Many immigrants start in industries where Norway badly needs people. In construction, everyone working on a building site, including the owner, must have an HMS card, an ID card showing who you are and who you work for. The card is ordered through your employer or your own company. Without it you can be turned away from the site. Cleaning has similar rules: a cleaning firm must be approved by the Labour Inspection Authority and listed in the cleaning register, and customers are obliged to use approved firms.

In transport you need the right driving licence and often a permit (løyve), and in the restaurant trade you need a serving licence from the municipality, an approved manager who has passed the etablererprøve and possibly a licence to serve alcohol. The Food Safety Authority (Mattilsynet) makes unannounced inspections and puts a smiley on the door. These rules exist because there has been a lot of undeclared work in exactly these industries. Follow them carefully; serious customers check you.

The first year

The first year is mostly about cash flow. Customers in Norway often pay with 14 or 30 days’ payment terms, while you have to pay for materials, fuel and insurance right away. Have a buffer in the bank before you quit your regular job, or start the company alongside it. Remember too that as an ENK you do not have the same right to sick pay from NAV as an employee in the first days, and that you must save for pension and holidays yourself.

Do not price yourself too low. Many new firms charge too little to win jobs, and end up working seven days a week without making money. Work out what an hour actually costs you, including tax, VAT, tools and time spent on quotes and invoicing. Deliver what you promised, on time. In Norway a good reputation spreads fast, and a bad one even faster, often in a local Facebook group.

Useful phrases

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  Jeg vil starte et enkeltpersonforetak.I want to start a sole proprietorship.
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  Hva er organisasjonsnummeret deres?What is your organisation number?
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  Er firmaet registrert i Merverdiavgiftsregisteret?Is the company registered for VAT?
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  Jeg sender faktura med 14 dagers betalingsfrist.I’ll send an invoice with 14 days’ payment terms.
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  Kan du gi meg et pristilbud?Can you give me a quote?
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  Prisen er eksklusiv mva.The price excludes VAT.
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  Har alle på byggeplassen HMS-kort?Does everyone on the building site have an HMS card?
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  Regnskapsføreren min tar seg av mva-meldingen.My accountant takes care of the VAT return.
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  Fakturaen er ikke betalt ennå.The invoice hasn’t been paid yet.