Norway Economy Overview

Currency

Norwegian Krone (NOK)

Working hours

37.5 – 40 hours

Public/bank holidays

12 public holidays

Capital

Oslo

Languages

Norwegian

Population

5.4 million

Minimum hourly salary

No statutory min salary

Tax year

1st Jan – 31st Dec

Date format

DD/MM/YYYY

Misclassification penalties

Up to two annual salaries when misclassifying an employee as a contractor.

Fun fact

Norway’s Government Pension Fund Global is the largest sovereign wealth fund in the world by assets under management.

With a strategic location in Northern Europe and close relations to the EU, Norway offers foreign investors access to a highly skilled and educated workforce, a robust local economy, and an efficient business environment free of corruption.

Overview of the Norway Economy

Norway is a highly developed, prosperous country with a mixed market economy. The country is known for its high standard of living, extensive social welfare system, and strong emphasis on equality.

In 2021, Norway’s GDP was approximately NOK 3,581 billion (US$362 billion), with a high per capita GDP of around NOK 671,800 (US$68,000).

Economic Sector Contribution to GDP Key Industries
Services 60% Finance, telecommunications, and tourism
Oil and gas 18% Petroleum sector (over 60% of exports)
Manufacturing and mining 10% Shipbuilding, fishing, and aluminum production

Once dependent on agriculture, fishing, and forestry, Norway has a highly developed economy with heavy state ownership in strategic areas such as natural resources. Specifically:

  • Is one of the largest oil exporters in the world and a leading natural gas supplier to the European Union.
  • Is a heavy producer of renewable energy thanks to hydropower and has the potential to develop wind, wave, and biomass power even further.
  • Has one of the largest fleets of electric vehicles per capita in the world.
  • Is a leading producer of seafood products from fishing or fish farms.
  • Has the largest individual sovereign wealth fund in the world in terms of total assets under management.

Norway has the world’s largest sovereign wealth fund, the Government Pension Fund Global (GPFG), which is valued at over US$1 trillion. The fund invests the country’s oil and gas revenues in global financial markets to ensure long-term financial stability and support future generations.

Norway is an open, trade-dependent economy. Its main trading partners are the European Union, the United Kingdom, and the United States. The country is a member of the European Economic Area (EEA) and the European Free Trade Association (EFTA).

Norway has a low unemployment rate, which stood at 3.2% as of February 2023. The country’s labor market is characterized by a highly skilled and educated workforce, with a strong emphasis on gender equality and work-life balance.

Today, Norway’s government is making efforts to lessen dependence on oil by investing oil revenues in new sectors (e.g., Biotech, Cleantech, FinTech, Edtech, Medtech, and other new technology areas) as well as using its sovereign wealth funds to invest in international financial and real estate markets not connected to the local economy.

Taxes

Employer Tax: 14.10%

Social security

14.1% (can be lower for some sparsely populated areas and increases for income exceeding NOK 850,000)

Employee Tax: 8%

Social security

8%

Income tax

22% + the following progressive supplements

Gross Income (NOK)

Up to 226,100

226,101 – 318,300

318,301 – 725,050

725,051 – 980,100

980,101 – 1,467,200

More than 1,467,200

Tax Rate

 0%

 1.7%

 4%

 13.7%

 16.8%

 17.8%

Business Regulation in Norway

Norway offers a favorable environment for business operations, supported by clear regulatory frameworks and a robust economy. Here is a breakdown of some key areas you would need to consider if you’re looking to expand into the country.

Incorporation

To incorporate a business in Norway, you must register with the Brønnøysund Register Centre (Brønnøysundregistrene). The main types of business entities are private limited companies (Aksjeselskap – AS), public limited companies (Allmennaksjeselskap – ASA), partnerships (Ansvarlig selskap – ANS/DA), and sole proprietorships (Enkeltpersonforetak – ENK).

  • Private Limited Companies (AS): Requires a minimum share capital of NOK 30,000. Must have at least one shareholder and a board of directors.
  • Public Limited Companies (ASA): Requires a minimum share capital of NOK 1,000,000. Must have at least two shareholders and a larger board.
  • Registration Process: Submit necessary documents, including the memorandum of association, articles of association, and details about shareholders and directors, to the Brønnøysund Register Centre.
  • Legal Framework: Governed by the Norwegian Companies Act, which outlines rules for company formation, operation, and dissolution.

Taxation

Norway’s tax system is known for being transparent and efficient, designed to support business operations while ensuring compliance. For example, as of 2024, the standard corporate tax rate in Norway is 22%, which is lower compared to other countries in the continent. Norway also has various tax incentives for businesses, especially those involved in research and development (R&D) and renewable energy sectors.

Employment

Employment laws in Norway are robust and designed to protect employees while providing flexibility to employers. Governed by the Working Environment Act (Arbeidsmiljøloven), these laws cover areas like contracts, working hours, health and safety, and termination procedures.

Benefits of Doing Business in Norway

From being home to a highly educated workforce to well-developed infrastructure, there are a number of key benefits of expanding into Norway.

Strategic Location in Northern Europe

Norway is located in Northern Europe and has close geographic and economic ties with the European Union (EU), even though it’s not an EU member. However, the country is a part of the European Economic Area (EEA), which provides access to the EU’s single market.

Highly Skilled and Educated Workforce

Norway is a nation and an economy that is known for its highly educated and skilled workforce. The country emphasizes education, which results in a labor force that is well-qualified across various industries. This is particularly true in technology, engineering, and maritime sectors.

Efficient Business Environment

Norway consistently ranks highly on global indices for ease of doing business and low levels of corruption. Transparency International’s Corruption Perceptions Index regularly places Norway among the least corrupt countries globally.

“Norway has a score of 84 this year, with a change of 0 since last year, meaning it ranks 4 out of 180 countries,” writes Transparency.org. Ultimately, this helps create a stable and predictable business environment.

Business Expansion Options in Norway

The following types of Norway business entities are available: sole proprietorships (Enkeltpersonforetak), general partnerships (Ansvarlig selskap), limited liability partnerships (Delt ansvar), private limited companies (Aksjeselskap or AS), public limited liability companies (Allmennaksjeselskap or ASA), and branch offices.    

The most common setups for new foreign businesses in Norway are subsidiaries (private limited companies) and branches.  Here are some more specifics.

Norway Employer of Record (EOR)

The Norway EOR becomes the official legal employer of your Norway team. This method is fast and efficient, making it perfect for companies that need to quickly deploy staff on the ground. 

An EOR handles payroll, benefits, taxes, and compliance with local labor laws, allowing businesses to focus on their core activities. They may also provide additional services, such as Norway talent acquisition and visa support.

LEARN MORE

Norway Professional Employer Organization (PEO)

Partnering with a Professional Employer Organization (PEO) or an Employer of Record (EOR) allows companies to employ local staff in Norway without the need to establish a legal entity in the country. This approach is ultimately simpler, quicker, and less expensive, making it ideal for businesses testing the market or those with limited operations. 

PEOs handle administrative tasks and ensure that companies comply with Norweigian regulations, reducing the complexity and risk associated with hiring local employees. 

The key difference between a PEO and an EOR is that an EOR becomes the legal employer of the staff, while a PEO co-employs the staff along with the client company.

LEARN MORE

Subsidiary Incorporation

A private limited liability company has a share capital of NOK 100,000; shareholders are liable only by the limit of their contributions, shares are non-transferable, and at least one board member must be a Norway resident.  

The company will also need to be registered with the Register of Business Enterprises (Foreningen av Norsk Register of Business Enterprises) and the Norwegian Tax Administration (Skatteetaten). 

Branch Registration

No minimum share capital is required to open a Norway branch office. However, representatives of the parent company are required to provide the following documents: 

  • The certificate of registration of the parent company
  • A copy of the parent company’s certificate of good standing
  • The memorandum of association and the articles of incorporation of the parent company
  • The minutes from the meeting where the decision to open the branch office was made
  • The name of the person responsible for the Norwegian branch
  • The address of the branch headquarters

Although a Norwegian branch office is subordinated to the foreign parent company, it needs to follow applicable Norwegian regulations and laws.

The Norway branch office will also need to be registered with the Register of Business Enterprises if involved in any local commercial activities and register with the Central Coordinating Register for Legal Entities.

Business Opportunities in Norway

Norway presents a multitude of promising business prospects for investors and entrepreneurs, owing to its robust economy, highly skilled workforce, and unwavering commitment to innovation and sustainability.

The nation’s exceptional quality of life, advanced infrastructure, and conducive business environment render it an incredibly attractive destination for investment.

Business OpportunityReasons
Renewable Energy– Government commitment to                       transitioning to a low-carbon                     economy and reducing greenhouse           gas emissions
– Abundant renewable energy                       resources, including hydropower, wind     power, and offshore wind potential
– Opportunities in energy storage, smart     grid technologies, and green hydrogen     production
– Growing demand for clean energy             solutions
Aquaculture– Norway is the world’s second-largest       exporter of seafood
– Strong expertise in sustainable                   aquaculture practices and technologies
– Opportunities in fish farming,                     processing, and value-added seafood       products
– Growing global demand for healthy           and sustainably sourced seafood
Technology and Innovation– Thriving startup ecosystem and                 supportive government policies for           innovation
– Strong research and development             capabilities, particularly in areas such       as oil and gas technology, maritime           technology, and ICT
– Opportunities in emerging                           technologies, such as artificial                   intelligence, Internet of Things, and           cybersecurity
– Potential for collaboration with leading     universities and research institutions
Healthcare and Life Sciences– Well-developed healthcare system and      a focus on public health
– Strong research and development             capabilities in life sciences, particularly     in areas such as cancer research,               neuroscience, and biotechnology
– Opportunities in e-health, medical             devices, and personalized medicine
– Growing demand for innovative                 healthcare solutions and services
Tourism and Sustainable Travel– Unique natural landscapes, including        fjords, mountains, and northern lights
– Growing demand for sustainable and         eco-friendly travel experiences
– Opportunities in adventure tourism,           cultural tourism, and luxury travel
– Potential for development of new               tourism products and experiences that     showcase Norway’s natural beauty and     cultural heritage

These aforementioned business opportunities, along with various others, are bolstered by Norway’s business-friendly policies, robust intellectual property protection, and steadfast dedication to sustainable development.

As the nation persists in investing in innovation, fostering international trade, and upholding its competitive edge across key industries, the potential for business growth and success in Norway is poised to remain formidable in the foreseeable future.