Norway is a highly developed country with a very strong and stable economy. Per capita GDP is fourth highest in the world, and its inhabitants enjoy one of the highest standards of living in the world with an integrated social welfare system.
WHAT ARE THE BENEFITS OF WORKING IN NORWAY?
The top three benefits of working in Norway are:
- It has one of the strongest economies in the world and is the world’s 6th least corrupt countries.
- It promotes a transparent regulatory framework, which encourages entrepreneurial activity and innovation.
- Norway is ranked 6th out of 190 in the World Bank’s Ease of Doing Business Index, with an increasingly lower rate of taxes in recent years.
MAXIMUM SALARY RETENTION IS IMPORTANT TO ME; HOW MUCH WILL I TAKE HOME?
The maximum salary retention that contractors can expect working in Norway depends upon many factors such as marital status, applicable allowances and deductions, dependents, expenses, and the nature of their business.
It also depends on whether a contractor chooses to work under an employer or through their own personal services company (PSC). Under our employment solution, contractors can expect retention between 56% and 65%, whereas the retention will be between 63% and 75% for those using their own PSC.
WHAT ARE THE LEVELS OF TAXATION IN NORWAY?
Norwegian personal income tax is progressive up to 14.52% for income over EUR 934,050. In addition, there is a flat local municipal tax at the rate of 25%. The tax paid differs slightly dependent upon the municipality in which you live. The corporate tax rate is 24%.
CAN I PAY MY TAXES BACK AT HOME BECAUSE MY STAY IS LESS THAN 183 DAYS?
If you live in Norway for less than six months (183 days) you need only pay tax on your income earned in Norway. If you stay for longer than 183 days, then you will have to pay Norwegian income tax on your worldwide income. This may be affected by the double tax treaties between your home country and Norway.
WHAT ARE THE SOCIAL SECURITY REQUIREMENTS?
Generally, anyone who is resident in Norway is a member of the National Insurance Scheme. This also applies to persons who are resident abroad but who are working in Norway. Self-employed workers within the EEA are also included.
Employees are required to contribute at a rate of 8.2% based on gross wages, while employers contribute at 14.1% on gross earnings.
There are a number of exceptions to these main rules. For example, some employees through the EEA agreement or bilateral social security agreements are entitled to remain covered by the social security scheme of their homeland.
HOW DO I REGISTER LOCALLY IN NORWAY?
To live and work in Norway for more than three months, contractors must register both at the police station and the Norwegian tax administration (Skatteetaten).
To receive a Norwegian Identity Number (necessary if you plan to live in Norway for more than six months) you need a local residential address. If you’re in the country for under six months, it is fine to be based in a hotel or similar with no permanent address.
EU/EEA nationals can move to Norway right away, but they must register no later than three months after their arrival to Norway.
Non-EU nationals must obtain a valid work permit before they can begin the residences registration process. Migration to Norway is regulated by the Norwegian Immigration Authorities (UDI). There are different visa routes for workers, depending on a range of factors. Non-EU/EFTA nationals must apply for and obtain a visa from the Norwegian Embassy in their own home country or country of residence before moving to Norway. Your application can be submitted in person or you can give Access Financial written power of attorney to make the application on your behalf.
IS THE PROCESS FOR CLAIMING EXPENSES DIFFERENT IN NORWAY? WHAT’S COVERED/NOT COVERED?
Norway offers various tax deductions for locals and expatriates. Some of the important deductions are as follows:
- The standard minimum deduction is 43% of earned income, up to NOK 94,750.
- Jointly assessed married couples and single persons with dependents can benefit from a personal allowance of NOK 78,300.
- Expatriates working in Norway for less than two years are granted an additional special 10% deduction from earned income. The maximum deduction is NOK 40,000. Expatriates who cannot benefit from this 10% deduction can still claim various expenses related to commuting, flights, temporary accommodation and similar, simply by submitting their receipts.
- Access Financial helps contractors with all expense claims to maximise their income.
CAN’T I JUST USE MY OWN COMPANY?
Working under your own company is definitely possible in Norway. At Access Financial, we offer a PSC solution to simplify the process of setting up in Norway and ensure that you can work legally through your company. For example, we help with everything from mandatory registrations to maximizing retention and benefits.
WHAT IS THE BEST SOLUTION FOR MY CIRCUMSTANCES?
At Access Financial, we offer local employment and PSC solutions for contractors in Norway. Every contractor has their own individual circumstances which will determine the solution that best suits their needs.
The employed solution may be more attractive to contractors who want to remove the stresses of running a company which include managing compliance and corporate tax in multiple countries. For those willing to take on that managment risk, the rewards can be well worth it. A PSC gives contractors the flexibility to contract with agencies on an individual basis, to claim deductions both at the company and employee level, and to improve their rate of income retention.
For more information on the benefits of each solution, please read our previous article Personal Service Companies Vs Standard Employment in Norway, or get in touch with a representative at Access Financial to discuss your options.
WHAT STEPS DO I NEED TO TAKE TO BE COMPLIANT?
When you partner with Access Financial, you provide us with all your information and requirements, and we do all the rest. If you are a non-EU/EFTA national, you will need a work permit to live and work in Norway, but we can help you with that too.
Depending on the way you choose to work you may need additional permits. Again, Access Financial will be there to advise you every step of the way.