Japan — 9 min
Norway — 11 min
If you’re thinking of setting up as an independent contractor in Norway, then congratulations: you’re about to embark on a journey as epic and awe-inspiring as the country’s rugged landscapes and majestic fjords.
Whether you’re looking to set up shop in the cool Nordic idyll of the capital Oslo, breathe the North Sea air in Stavanger, or find inspiration under the Northern Lights in Tromsø, Norway is an ideal location for mixing business and pleasure.
Before you can start making a living on your terms, though, you’ll need to know how to:
Register your business in Norway
Avoid misclassification as an employee
Create compliant contracts that protect you
Invoice and collect payments from around the world
In this article, we’ll cover all these things, and help you navigate your tax responsibilities as a self-employed worker. We’ll also discuss some of the other risks and liabilities you should be aware of, so let’s begin.
First, it’s important to clarify how Norway defines independent contractors.
Independent contractors are workers who provide paid services (or products) to another party. However, they are classified differently to employees, and are usually not entitled to the same benefits, such as paid leave, sick days, and minimum wage. On the flip side, contractors have more freedom and flexibility in the way they work.
See also: Why businesses hire contractors vs. international employees
In Norway, the distinction between contractor and employee is assessed on a case-by-case basis. In most cases, though, there are several key differences, the biggest of which is that a contractor operates at their own expense and risk. In general, you are considered an independent contractor if you:
Are entitled to subcontract work
Provide your own tools and equipment
Work when, how, and where you see fit
Are entitled to work for other businesses at the same time
When you work with clients, it’s important to be correctly classified to avoid penalties and fines, and to ensure that you are paying the right taxes.
Before you can begin working as an independent contractor in Norway, you’ll first need to choose a formal structure for your business. Some of the most popular models include:
Sole proprietorship (ENK): A simple structure that is ideal for independent, individual contractors. You have full control of the enterprise, although there is no legal separation between you (the owner) and the business; you are personally responsible for all its debts and liabilities.
Partnership (ANS/DA): A simple partnership agreement. Again, there is no legal separation between the individual and the business; you and your partners are personally responsible for any debts and liabilities.
Limited Liability Company (AS/ASA): A formal, legal entity that is separate from you, the individual. All income and losses are attributed to the company as opposed to you personally (i.e. you are only liable for the capital you invest in the company).
There are pros and cons to each of these structures, but most independent contractors choose the sole proprietor model, as it is fairly simple to set up and operate. If you’re unsure, it’s a good idea to speak with a registered solicitor or accountant first.
If you do opt for a sole proprietorship, you must register your business with the Central Coordinating Register for Legal Entities. Be careful when describing your business activity, as this will influence the industrial code you will be assigned (and may affect your VAT obligations later on). Your business name must also include your surname.
You may also need to register with the Register of Business Enterprises if you:
Are selling goods that you buy for resale
Have more than five employees
Are pledging your inventory
Operate as a state-authorized auditor or accountant
As an independent contractor, it’s down to you to handle your invoices and payment collection. Unfortunately, this means billing each client individually and collecting payment through their preferred payment method — which can be inefficient and time-consuming.
Some of the most common ways to collect payments include:
Digital transfer services like PayPal and Wise
These methods all have their own pros and cons. For instance, bank and digital transfers can be pretty quick, but often come with hefty service fees. And if you have clients in other countries besides Norway, the payment collection process can be even more complicated.
Alternatively, you can use a trusted solution like Remote. Our platform is a simple, secure, and reliable way to get paid quickly in Norwegian kroner — and with no hidden fees. Learn more about how our platform can help.
As an independent contractor, you’re responsible for filing and paying your own taxes and social contributions.
The good news is that, as a sole proprietor, you pay personal income tax on your business profits (using your personal tax number). This means that you do not have to fill out a separate tax return, or pay additional corporate taxes.
In Norway, self-employed people must estimate and pay their tax in advance across four quarterly payments (in March, June, September, and December). To do this, you will need to obtain a KID number, which acts as a form of ID. You will also need to file an annual tax return by May 31 each year. Note that, if you miss the deadlines for any of these filings, you will be subject to late penalties.
Norway operates a dual tax base system consisting of general income and personal income. The general income tax (which includes state, municipal, and local taxes) is set at a flat rate of 22%. This is then supplemented by personal income tax, which can be anywhere between 1.7% and 17.5% of your income, depending on your level of earnings.
If you earn more than NOK 69,650 (around $6,500), you’ll also need to make national insurance contributions. As a sole proprietor, you’re liable for the highest rate of 11.1% of your income.
On the flip side, you can claim tax deductions for multiple business expenses, including:
Rent and utilities for business premises
Mobile, broadband, and telephone bills
Tools and equipment
If you work from home, you can also potentially claim a proportion of your costs. Keep accurate records of all these expenses, as they will likely be reviewed by the tax authorities.
If you earn more than NOK 50,000 (around $4,700) annually, you must register for — and start charging your clients — VAT. You will then need to report your VAT activity to the tax office every two months, and pay your owed VAT every quarter. You can, of course, also claim back VAT on your own business purchases and expenses.
The standard VAT rate in Norway is 25%, although some goods and services are charged at the lower rates of 15%, 12%, and 0%.
As a sole proprietor, you are personally liable for finance and tax debts, which means your private assets can be forcibly used to settle your business debts. Many independent contractors purchase liability insurance to help mitigate this risk.
It’s also important to cover yourself when drafting and signing agreements with clients. Our legal experts can provide you with fully compliant contract templates, for both Norwegian and international clients.
As a sole proprietor, you don’t need to publish financial statements or accounts. However, you must still keep organized, accurate records of all your commercial activities (including receipts and invoices) for at least 10 years. If you are registered for VAT, you must also properly maintain your VAT records for at least six years.
You can either manage these records yourself using an accounting or bookkeeping tool, or hire a professional bookkeeper or accountant. It is not necessary to open a business bank account, although many accounting professionals recommend keeping your personal and business finances separate.
Note that, if your business generates annual revenue of over NOK 5 million (around $465,000), you will need to be audited.
As we’ve mentioned, independent contractors are classified differently to employees in Norway. Many of the protections and benefits employees enjoy do not typically apply to contractors.
As a result, companies may deliberately misclassify you to circumvent their legal obligations, while at other times, it may happen accidentally. Whether it’s intentional or not, misclassification can result in penalties and fines for both you and your client.
As an independent contractor, you can work with your clients to ensure this doesn’t happen. Discuss your role and responsibilities with them, and review the working arrangement regularly.
If your working relationship changes over time and you become more integrated into a client’s company, you can ask to be converted into an employee.
Open a dialogue with your client and carefully discuss the risks and benefits of moving to an employer-employee relationship. In particular, be clear about how it can benefit both parties — not just you.
You can even suggest the help of a third-party solution, such as Remote, to ease the transition. Our global employment services help both parties stay compliant by taking care of key HR functions (like payroll management and benefits administration) in line with Norwegian law.
As you can see, there’s a lot to take on board when setting up as an independent contractor. Remote can help you with many of these challenges, allowing you to focus on growing your business and delivering to your clients. Here’s how:
Navigating all of your clients’ different invoicing, approvals, and payments systems can be complicated and time-consuming. And manual methods of invoicing and collecting payments can increase the risk of fees, errors, and delays.
Remote gives you access to a highly secure, streamlined dashboard that makes invoice management and international payments cost-effective and efficient. You can use our platform to get paid in Norwegian kroner hassle-free, without any hidden fees.
When you draft agreements and contracts for your clients, you run the risk of non-compliance with local labor laws — especially when working with international clients. Remote offers localized contracts tailored to Norwegian laws, ensuring that you always stay compliant. Our legal experts can also provide guidance on complex issues, such as local classification and intellectual property protections.
With Remote, you no longer need to rely on spreadsheets and other manual tools to invoice for payments; we remove many of the inaccuracies and delays caused by archaic processes and manual management. Our platform lets you create invoices, submit them for approval, and subsequently get paid in your local currency without needing to switch to any other tool or software.
Tax management is notoriously complex work. Remote helps you quickly and efficiently deal with tax management by compiling data about your income based on your invoices and payments received.
Having the freedom and flexibility to work on your own terms is liberating. But your administrative responsibilities can distract from what you really want to be doing: helping your clients, delivering great work, and collecting invoices.
By using a stable, trusted platform like Remote, you can manage these obligations quickly and efficiently, allowing you to focus on your business goals. Specifically, we can help you:
Avoid intermediary fees and delays with international client payments
Draft compliant contracts for both Norwegian and foreign clients
Enhance your invoice management and avoid manual processes
Comply with local labor laws regarding work practices
Our platform makes it quick, simple, and seamless to get started as an independent contractor. Learn more about how our expertise can save you time and resources today.
Subscribe to receive the latest
Remote blog posts and updates in your inbox.