Starting a business in Norway

1. Introduction

Companies establishing a business activity in Norway are advised to obtain current and detailed information from professionals, as they must comply with the same regulations as Norwegian enterprises. Furthermore, employees are, by legislation and for some by collective agreements, given stronger rights in the employment relationship than employees in many other countries. The employers must comply with the requirements of the Working Environment Act (WEA), and the rules cannot be waived by agreement to the detriment of the employee.

Helmr was the first employment and labour law boutique firm in Norway when established in 1988 and is the largest employment boutique in the country. The partners and associates have extensive experience from different employer’s organisations, labour unions, courts, governmental ministries, public administration, and larger law firms. Our team advises national and international businesses, recruitment agencies, labour unions, governmental organisations, municipalities as well as individuals, on all types of labour and employment law related issues.

2. Labour and Employment Law Requirements

a) Employer Policy Requirements

The employer is obligated to ensure that the working environment is  fully satisfactory at all times, judging all factors in the working environment – separately and collectively – that may influence the employees’ physical and mental health and welfare. The standard of safety, health and working environment shall be continuously developed and improved in accordance with developments in society. In order to be legally compliant, employers are required by legislation to create and implement a number of employment policies. The following are required statutory policies for an organisation that is commencing work in Norway:

• procedures for whistleblowing regarding issues of concern in the undertaking (e.g. workplace harassment) and procedures for processing and follow-up of such issues at all undertakings with five employees or more;
• health, environment, and safety (HSE) internal control system. The employer shall ensure that systematic HSE work is performed at all levels of the undertaking, including implementing routines to detect, rectify and prevent contraventions of requirements laid down in, or pursuant to, the Working Environment Act. The employer has an obligation to present the required documentation of the HSE-work;
• if your business includes work that may involve particular hazards to life or health, written instructions prescribing how the work is to be executed and what safety measures are to be implemented;
• routines for the prevention and follow-up of sick leave. The employer must keep records of sick leave;
• working hours control system to ensure that employers are in control of the employees’ working hours and that these are contained within mandatory limitations;
• election of safety representatives at all undertakings with five employees or more.

There are a number of additional policies that employers should create. These policies will help an organisation manage employee relations and mitigate the risk of legal liability in the future:

• code of ethics, including discrimination, harassment, violence, threat, or other improper conduct.
• personnel.

Depending on the nature of the business, additional policies may be required.

b) Employee Training Requirements

Employers are required to complete certain training activities. The following are statutorily mandated trainings that employers must provide:

• HSE training, practice and instruction appropriate for the individual enterprise and its nature, activities, risks and size, for all employees;
• training and other costs associated with the work of the safety representatives;
• training necessary to enable all employees to familiarise themselves with systems used in planning and performing the work;
• adequate information and training shall be provided so that employees are able to perform the work when changes occur that affect his or her working situation.

c) Employment Agreements

As a main rule, an employee shall be employed on a permanent and full-time basis. Fixed term contracts are only allowed to a limited extent, and only when certain requirements are met. Hiring from temporary-work agencies are even more restricted.

All employment relationships shall be subject to a written contract of employment. There are minimum requirements regarding the content of the written contract, as it shall state factors of major significance for the employment relationship, including the following elements:

• the identity of the parties;
• the place of work;
• the employee’s title, post or category of work;
• the date of commencement of the employment;
• if the employment is of a temporary nature, its expected duration and the basis for the appointment;
• trial period clause, if any;
• the employee’s right to holiday and holiday pay, the provisions concerning the fixing of dates for holidays, and any right to other paid leave from the employer;
• the periods of notice applicable to the employee and the employer and procedure upon termination of the employment relationship;
• the pay agreed on commencement of the employment, any supplements and remunerations not included in the pay, as well as method of payment and payment intervals for salary payments;
• duration and disposition of the agreed daily and weekly working hours. If the work is to be performed periodically or the daily and weekly working hours will vary, the contract of employment shall provide information to this effect, and stipulate or provide a basis for calculating when the work shall be performed;
• length of breaks;
• agreements concerning special working hours, if any;
• applicable collective agreements, if any;
• the identity of the hirer if the employee is hired out from a temporary-work agency. The information must be provided as soon as the identity of the hirer is known;
• right to competence development that the employer may offer;
• social security benefits under the auspices of the employer as well as the names of institutions that receive payments from the employer in this regard;

3. Corporate Law Requirements

a) Compliance for Incorporation

Which form of corporation you choose is of great importance in relation to liability, risk, tax, rights, and duties. For the purpose of this proposal, we have assumed that you would like to establish a presence in Norway through either a private limited company (AS) or a Norwegian branch of a foreign company (NuF). However, we can assist in devising the best possible option for your business and/or establish those structures already elected for you.

Some preparatory steps to ensure legal compliance for incorporation have been roughly outlined below. We emphasise that the list is not exhaustive and is only meant to give you a general idea of the work at hand.

Registering a private limited company (AS):

• a private limited company must have a Norwegian physical business address (not a post-box).
• the name of the company must include the form of incorporation ‘aksjeselskap’ or the abbreviation ‘AS’.
• ask the bank to set up a share capital account. Obtain minimum share capital of NOK 30 000. Pay in the share capital and ask for confirmation of receipt from the bank.
• to establish the company, the shareholders have to prepare, date and sign a memorandum of association and articles of association.
• fill out applications for D-numbers for each person who is going to have a role in the business, and who does not already have a Norwegian D-number.
• register your company in the Register of Business Enterprises (Brønnøysundregistrene, a register responsible for registering Norwegian and foreign enterprises which operate commercially in Norway or on the Norwegian continental shelf) no later than three months after the company is founded. The registration can be completed online via the Register of Business Entreprises’ website. When the company is registered, you will be notified in Altinn (an internet portal for digital dialogue between businesses, private individuals and public agencies). Registration in the Register of Business Enterprises affords protection for the enterprise’s name.

Registering a Norwegian branch of a foreign company (NUF):

• register the Norwegian branch of the foreign company by completing and signing ‘Paper form for Norwegian-registered foreign company (NUF)’ in the Register of Business Enterprises. NUFs cannot be registered electronically.
• enclose the certificate of registration from the official registration authority in the home country and other obligatory enclosures.
• anyone who is to perform a role in an NUF who does not already have a Norwegian national ID number, or D number, must also complete an application for a D number.
• send the forms and enclosures (English will be accepted) to the postal address stated on the form.
• you will be notified once the registration process is complete. Upon registration, the branch (NuF) will be assigned an organisation number.

b) Post Incorporation Registrations

Once the company is incorporated, certain registrations are required. Listed below are the most common post-incorporation registrations required. Depending on the form of corporation there could be variations and/or additionally required registrations.

• the Register of Legal Entities, which allocates organisation numbers.
• NAV’s Employers and Employees register, in respect of reporting who is employed in Norway. This information is registered by submitting the «A-melding».
• the Value Added Tax register (VAT), if you carry out an assignment where the turnover in Norway exceeds NOK 50,000 over a twelve-month period.
• all private limited companies must submit a shareholder register statement to the Norwegian Tax Administration’s Shareholder register.

Depending on the exact nature of the business, more registrations may be required, e.g. enterprises whose object is to hire out labour, or if you provide cleaning services. Furthermore, in certain industries, you must have a permit to run your own business, e.g. the catering/restaurant sector.

4. Payroll and Benefits Providers

The regulations relating to appointments and salary payments are extensive and keeping payroll accounts can soon become complicated. Should you decide to do it yourself, a payroll system will be a big help. However, many people decide to outsource their accounts to an accountant or ask an accountant to take responsibility for payroll runs.