A sole proprietorship in Norway. How to set up and is it profitable?

Sole proprietorship in Norway. How to set up a company in Norway? Is it worth it?

Officially, about 100 people live in Norway. Poles, unofficially, however, this number is almost three times higher. It is worth paying attention to the high entrepreneurship of the Polish community in Norway. There are just over 40 in this country. companies run by persons with Polish citizenship. What is Norway tempting Poles with? What is it like to do business in the Kingdom, and is it profitable?

Own company in Norway - legal aspects

Economic activity in Norway can be conducted in four basic forms. A sole proprietorship, a capital company, NUF with VAT and NUF with a contact person. What form of running a business will be chosen is associated with specific benefits and weaknesses throughout the entire period of its operation. A sole proprietorship is most often registered and we will focus on it later in this article.

One-man company (enkelpersonforetak) - cons

A sole proprietorship is the most popular form of business in which a natural person acts on his or her own behalf and under his or her own responsibility. There is no separation between company's incomeand the owner's income, and thus the entrepreneur is liable for any debts with all his assets.

The significant disadvantages also include smaller privileges for the owner than in the case of employees. It is not subject to the Labor Code or the Vacation Act. Therefore, he is not entitled to a holiday allowance. Such an entrepreneur is also not covered by the regulations. Which result from the act on insurance against accidents at work, as well as the act on wage disputes. In addition, if the owner of the business is forced to close it, he is not entitled to unemployment benefit (dagpender).

Advantages of a sole proprietorship

Despite the above-mentioned disadvantages, the fact that this form of running a business is most common is due to the fact that the registration of such an entity is simple and the cheapest. It is enough to register it free of charge in the register of economic entities (Enhetsregisteret) to legally conduct business in Norway. It is possible to register a company in the register of enterprises (Foretakregisteret), but it is worth remembering that this activity is paid for.

Another plus point is the fact that such an entrepreneur works independently. It has no partners and decides entirely on the direction of the company's development. It does not have to have initial capital, which in the case of a capital company is 35 thousand. Norwegian kroner. Such a business may be run jointly with your spouse, but they may not be employed by each other.

Conditions for running a business in Norway

There are certain conditions associated with running a sole proprietorship, which are specified by law. Contrary to enterprises registered in Poland, contributions to the Social Insurance Institution (ZUS) are calculated on the basis of the income earned. They amount to 11,4%. In practice, this means that if a given entity does not earn any income. It means that in a given month, it does not bear the costs related to these contributions.

Additionally, you must pay a flat income tax of 24% on the first threshold. It is worth pointing out, however, that there is geographical diversification in terms of PIT. Inhabitants of northern and colder regions are covered by the reference rates of 20,5%. There are also three VAT thresholds:

- 10% if the activity consists in the sale of public transport and hotel services

- 15% and is charged for the sale of certain products, mainly food products

- 25% for the rest of services and goods

It is also worth pointing out the benefits related to the pension system. You just need to pay your contributions health insurance for 3 years to obtain the right to a partial pension paid from the Norwegian budget.

How to set it up and is it worth it?

For Poles living in Norway running your own business is a chance to get better earnings, especially in the construction industry. They are respected as employees and Norwegians appreciate the diligence, commitment and professionalism of the services provided. In addition, it is enough to work in this way for 3 years to obtain the right to an incomplete pension. However, it is worth remembering that an entrepreneur running a sole proprietorship is liable with all his assets. In the event of bankruptcy or losses, he must cover all liabilities from his own resources.

Assistance in setting up a company in Norway

Use the services of an Authorized Accounting Office, service in Polish: