Doing Business in Norway

Transcription

1 Doing Business in 2011

2 Contents 1. Introduction Business environment Foreign investment Setting up a Business Labour Taxation Accounting & reporting UHY firms in UHY offices worldwide... 17

3 1. Introduction UHY is an international organisation providing accountancy, business management and consultancy services through financial business centres in over 81 countries throughout the world. Business partners work together through the network to conduct transnational operations for clients as well as offering specialist knowledge and experience within their own national borders. Global specialists in various industry and market sectors are also available for consultation. This detailed report providing key issues and information for investors considering business operations in has been provided by the office of UHY representatives: RevisorGruppen AS (Oscars gate 30) Postboks 7154 Majorstuen N-0307 Oslo Phone: You are welcome to contact Leif Aase for any inquiries you may have. Information in the following pages has been updated so that they are effective at the date shown, but inevitably they are both general and subject to change and should be used for guidance only. For specific matters, investors are strongly advised to obtain further information and take professional advice before making any decisions. This publication is current at September We look forward to helping you do business in RevisorGruppen AS (the Firm ) is a member of Urbach Hacker Young International Limited, a UK company, and forms part of the international UHY network of legally independent accounting and consulting firms. UHY is the brand name for the UHY International network. The services described herein are provided by the Firm and not by UHY or any other member firm of UHY. Neither UHY nor any member of UHY has any liability for services provided by other members. Copyright 2012 UHY International Ltd -1-

4 2. Business environment As one of the wealthiest nations in the world, is an attractive prospect to international businesses wishing to establish a presence in Scandinavia. This elongated country stretches from the capital city, Oslo, in the south, to Tromso in the far north, known as the Gateway to the Arctic. is home to 4.95 million inhabitants. There are three official languages: Bokmål, Nynorsk and Sámi. Bokmål is the dominant language; Nynorsk (new Norwegian) is a dialect and Sámi is spoken by fewer than 5%. Most Norwegians also speak English or German. In the 1960s, the discovery of oil and gas deposits transformed into one of the world s wealthiest countries. Fossil fuel trade now accounts for half of the nation s exports. A proportion of income from fuel exports is re-invested into a government-controlled fund for the benefit of future generations when fossil fuels run out. Other exports are timber, machinery, metals and fish. has several times been ranked the best or one of the best countries to live in the last ten years. In 2011 the Swiss bank UBS ranked Oslo as the most expensive city in the world (after Zurich and Geneva). Despite their new-found wealth, Norwegians are not ostentatious by nature. There is a high rate of public ownership of the nation s main industries. s provision of state benefits, in keeping with other Scandinavian countries, is exemplary. is also known for being largely corruption-free. is a constitutional monarchy. It is not a member of the EU, but is a member of the EEA (European Economic Area). In a 1994 referendum, Norwegians rejected membership of the EU. The Norwegian government is a centre-left alliance led by the leader of the Labour Party, Jens Stoltenberg. General Population Area Civilian working population ± 4.95 million 386,958 sq. km around 2.5 million Main trading partners are found in the Northern parts of Europe. Copyright 2012 UHY International Ltd -2-

5 Currency 1 US $ = 5.86 NOK pr January Euro= 7.81 NOK pr January 2011 Value added tax rate (standard) 25% Distances (by car) between some main cities Oslo Trondheim 540 km Oslo Tromso 1600 km Oslo Bergen 477 km Oslo Stavanger 452 km Copyright 2012 UHY International Ltd -3-

6 3. Foreign investment The Norwegian government encourages foreign investment, particularly in the oil industry and in the underdeveloped northern regions. Certain sectors are excluded from foreign investment - fisheries, maritime transport and government-owned enterprises such as the Norwegian postal service and railway. Foreign investment in hydropower is also restricted. However, the electricity distribution network is open to foreign investment. In 2007, foreign direct investment in was NOK 658 billion. Government benefits and incentives SkatteFUNN is a scheme that gives companies a tax break for expenses related to pre-approved R&D projects. Registration to SkatteFUNN can be completed online at: Tax breaks are given to companies engaged in oil exploration and to shipping companies. Copyright 2012 UHY International Ltd -4-

7 4. Setting up a Business The following types of companies are recognised by Norwegian company law: Branch (Filial) Private Limited Liability Company (AS) Public Limited Liability Company (ASA) Partnership (ANS, DA, KS and indre selskap) European Public Limited Liabilities companies. Registration All types of partnership, branches and limited liability companies have to be registered with the Norwegian Register of Business Enterprises (Foretaksregisteret). It can take two to three weeks to process a paper application or just three to four days if you submit an online application. Branches A branch is not a separate legal entity but is a registered office of a foreign company. The advantages of setting up a branch in are that it is straightforward to establish and easier to wind up. Branches have to keep separate accounts for their Norwegian operations and financial statements have to be filed annually. The financial year in is the calendar year. It is possible, with permission from the Norwegian Ministry of Finance, for a branch to file its accounts in keeping with its foreign parent company s financial year. Private Limited Liability Companies (AS) and Public Limited Liability Companies (ASA) The fee of registering a company in is NOK 6400, NOK 5300 if electronic registration is used (2011 prices). Minimum share capital of NOK 30,000 is required for a private limited liability company. Share capital of NOK 1,000,000 is required for a public limited liability company. Financial statements of private limited liability companies are available for public inspection. All Limited Liability Companies are required to have a board of directors. Copyright 2012 UHY International Ltd -5-

8 Private companies with a share capital of less than NOK 3 million can have as few as one director and one deputy member of the board of directors. Those with more than NOK 3 million in share capital must have at least three members of the board of directors. Public companies must have at least five directors serving on the board, and at least half of the directors have to be either Norwegian nationals or Norwegian residents. Public companies must have both sexes serving on the board, more detailed regulations depending on the actual number of directors. Employees have the right to representation on the board if there are more than 30 employees and if there is no corporate assembly. Partnerships All partnerships have to be registered at the Norwegian Register of Business Enterprises. Partnerships with an annual turnover of less than NOK 5 million do not require an audit. European Public Limited Liabilities companies This may be set up in the form of a Societas Europaea (SE). Setting up a business in Since s accession to the EEA agreement in 1995, it has become a lot easier for foreign business people to set up a company in. According to the US Department of Commerce, While the Norwegian government officially endorses a level playing field for foreign investors, existing regulations, standards and practices often marginally favour Norwegian, Scandinavian and EEA investors, in that order. The International Monetary Fund reports that both residents and nonresidents may hold foreign exchange accounts. There are no restrictions on payments or transfers. As of January 2011, there is no ceiling on the amount of foreign equity that can be invested in a Norwegian financial institution. Copyright 2012 UHY International Ltd -6-

9 5. Labour In 2011, just 3.3% of the workforce was registered unemployed. A large proportion of the workforce is female, and around half of women work part-time. This is largely due to the excellent, state-subsidised childcare schemes. There are a high proportion of women in high-profile political and senior executive roles. There is no legal minimum wage in, although wages tend to be higher than the EU average. According to the Norwegian Embassy, there is no extreme poverty in. EEA nationals and their immediate families can live and work in without the need for a work permit. They have the same rights as Norwegian nationals on pay, working conditions and housing. All employees in have automatic membership of the Norwegian National Insurance scheme. The petroleum industry attracts skilled foreign workers, mostly from the EU and the US. The healthcare sector also recruits many qualified foreign medical staff to work in hospitals. Social security has an extensive range of welfare benefits: Sickness benefits Disability benefit Survivors benefit Maternity benefit Child/family benefits Old age pension Unemployment benefit. All Norwegian citizens and residents have access to welfare benefits and healthcare. Some 1.4 million Norwegian citizens and residents receive welfare benefits as their main source of income. Most recipients are old age pensioners. The statutory retirement age is 67 years for both sexes, although many people choose to retire earlier, at around 62 years. Copyright 2012 UHY International Ltd -7-

10 At present, around half of the labour force has an occupational pension scheme. All companies must contribute 2% of annual employees salary into a pension plan. Copyright 2012 UHY International Ltd -8-

11 6. Taxation Scandinavian countries are perceived as being high tax zones and is no exception. The top rate of income tax, including National Insurance contributions, is almost 51%. In 1992, tax reforms were brought in to simplify the taxation system. This created a two-tier system in which income was classed as personal income and general income. Since the reforms there has been a flat rate of corporation tax at 28%. Limited liability companies in are in general subject to tax on their worldwide income, still there are some exceptions (fritaksmetoden). MVA (merverdiavgift a value added tax) is payable on most goods and services. The threshold for registering for MVA is NOK 50,000 for companies. Charities and non-profit organisations have a more generous threshold. Corporation tax (for corporations or branches) 2011 rate (no local income taxes): 28% Withholding tax Nil (for EU and EEA residents) Income taxes on individuals Standard rate of income tax = 28% Higher rate of income tax = 47.8% The higher rate is payable on earnings over NOK Other significant taxes MVA The standard MVA rate is 25%. However, there are some reduced rates of MVA, and some goods and services are zero-rated. Inheritance and gift taxes Up to NOK 470,000 can be transferred tax-free. Thereafter, between NOK 470,000 and NOK 800,000 is taxed at 8% (or 6% if inherited from parents). Over NOK 800,000 the tax rate is 15% (or 10% if inherited from parents). Gift tax is levied at the same rates as inheritance tax (see above). Gifts and inheritances between spouses are not taxed. Copyright 2012 UHY International Ltd -9-

12 Summary of taxes levied in (tax year 2011) The main taxes levied are: Corporate income tax: statutory rate: 28% Dividend withholding tax: 0% - 28% (0% tax payable on shares held in Norwegian companies and companies within EU. 28% standard tax rate is payable on interest, share dividends from foreign companies, rental income and royalties) Interest and royalty withholding tax: 28% Capital gains tax: 28% Value added tax: 25% Individual income tax: 28% 51%. Taxes levied by local governments: Municipal wealth tax of 1.1% on taxable assets. Payable on wealth over NOK Copyright 2012 UHY International Ltd -10-

13 7. Accounting & reporting Financial statements for Private and Public Limited companies must be filed the following year by 31 July or by 31 August if the statement is filed online. Financial statements must be submitted in Norwegian and should be in NOK. Accounting records should be kept in Danish, Swedish, Norwegian or English. As from 2011 it is optional for small limited liability companies to have an auditor. For this purpose, a limited liability company will be regarded as a small company if it has less than NOK 5 million in revenues, and less than NOK 20 million in balance sheet amount, and the average number of employees that does not exceed 10 man-years. A registered auditor has to run an annual audit for branches or partnerships where the turnover exceeds NOK 5 million. Rules for submitting financial statements and accounting procedures are similar to those for Private Limited Liability Companies. Foretaksregisteret= Norwegian Register of Business Enterprises. Information on accountancy and auditing practices in is available at Copyright 2012 UHY International Ltd -11-

14 8. UHY firms in RevisorGruppen AS is a national network of 13 firms in 19 locations throughout. Contact the liaison office for guidance in which firm and location can best serve your needs: RevisorGruppen AS (liaison office) (Oscars gate 30) Box 7154 Majorstuen Oslo N-0307 Contact: Kirsten Vanberg Phone: [email protected] Abrahamsen & Løken AS (Oscars gate 30) Box 7154 Majorstuen Oslo N-0307 Contact: Hallvard Holme Phone: [email protected] RevisorGruppen FMØ DA Oscars gate 30 Postboks 7154 Majorstuen Oslo N-0307 Contact: Mari Østbø Phone: [email protected] Copyright 2012 UHY International Ltd -12-

15 RevisorGruppen Agder AS (Kongensg 4) Postboks 56 Kristiansand N-4661 Contact: Ingemar Kørling Phone: RevisorGruppen Åndalsnes (Nesgata 10) Postboks 116 Åndalsnes N-6300 Contact: Endre Engen Phone: RevisorGruppen Drammen AS Postboks 4130 Gulskogen Drammen N-3005 Contact: Roald Skeide Phone: RevisorGruppen Fjordane AS Naustdalsvegen 1b Førde N-6800 Contact: Roger Hopland Phone: Copyright 2012 UHY International Ltd -13-

16 RevisorGruppen Hordaland DA (Kanalveien 105B) P.O. Box 63 Kristianborg Bergen N-5822 Contact: Ragnar Pettersen Phone: RevisorGruppen Hordaland DA Trollhaugmyra 15 Straume N-3535 Contact: Ragnar Pettersen Phone: RevisorGruppen Hordaland DA P.O. Box 290 (Osen 4) Stord N-5402 Contact: Ragnar Pettersen Phone: RevisorGruppen Hordaland DA (Strandavegen 11) Voss N-5701 Contact: Ragnar Pettersen Phone: Copyright 2012 UHY International Ltd -14-

17 RevisorGruppen Mæland & Østbye AS (Rosenholm Campus, Rosenholmveien 25) Postboks 335 Kolbotn N-1411 Contact: Jan Willem van Woensel Kooy Phone: RevisorGruppen Møre AS (Daaeskogen Næringsbygg) Postboks 7731 Spjelkavik Ålesund N-6022 Contact: Atle Birger Flø Phone: RevisorGruppen Møre AS Sentrum Larsnes N-6022 Contact: Atle Birger Flø Phone: RevisorGruppen Møre AS (Bjørndalsvegen 15) Postboks 331 Ulsteinvik N-6065 Contact: Atle Birger Flø Phone: Copyright 2012 UHY International Ltd -15-

18 RevisorGruppen Østfold DA Hundskinnveien 98 Sarpsborg N-1711 Contact: Kay Å. Minge Phone: RevisorGruppen Telemark AS Kjørbekkdalen 15B Skien N-3735 Contact: Bjørn Sti Phone: RevisorGruppen Trøndelag AS Gjelbakken 3 Selbu N-7580 Contact: Rune Fiskerstrand Phone: [email protected] RevisorGruppen Trøndelag AS Kjøpmanngt. 12 Stjørdal N-7501 Contact: Rune Fiskerstrand Phone: [email protected] Copyright 2012 UHY International Ltd -16-

19 RevisorGruppen Trøndelag AS Øvre Flatåsveg 14B Flatåsen N-7079 Contact: Rune Fiskerstrand Phone: UHY offices worldwide For contact details of UHY offices worldwide, or for details on how to contact the UHY executive office, please visit Copyright 2012 UHY International Ltd -17-