My notes on starting a business in Norway (WIP)
Table of content:
Q: Why use holding structure (have two companies were one ownes the other)?
A: To avoid paying 30% Direct tax on dividend, instead you pay ~3% and can redistribute the dividend to other business ventures as soon as you distribute to private consumption you pay the between 30%. The reasoning is that society has more benefit from people putting money into new business ventures than private consumption. (Also remember that regardless, all company surplus will be taxed with 22% so in many cases its better to do a combination pay high salaries and pay dividend for business redistribution)
Q: Why do I need 30k NOK to start a company?
A: To register a company you add 30k NOK (3k$) to a locked account in your bank. Then get a confirmation from you bank that the money is locked. They are unlocked again after the company registration is complete
- Make company declaration
- make company bank-account and add 30k
- register your company in (call Tlf 75 00 75 00 or 800 33 840 if u need help) alltin.no
- Wait for org nr and give this to bank. then regain access to 30k
Norwegian startup financial aid
- 100k nok for market fit test
- 700k nok (biz dev / prototype dev, match 1/2 priv invest)
- 1.5m nok (must match 1/3 of priv invest, repay within 4yr)
Q: How to split the shares?
A: General rule of thumb is to allocate 10% of shares to future employees. There is also https://slicingpie.com/learn-slicing-pie-model/ Or you can set a up an employee benefit scheme. Where the 10% generates yearly dividend to all employees and then the employees can them self invest in stocks like Appl amzn goog etc.
Q: How do you pay employee?
A: 1. Write a simple contract with amount earn and work hours 2. Register the employment in altinn. 3. Pay gov fees and vacation money to separate company accounts according to this tutorial: https://firmanytt.no/ansette-seg-selv-i-eget-as/
Q: How do you pay contractors?
A: Define the task to be completed, on completion pay the agreed amount. Write it off as an expense in your budget
- Google sheet for company declaration, articles of association, cap table etc: https://www.entrepedia.com/no/dokumenter/cap-table/
- General international startup kit: https://toolkit.techstars.com
- Debunking myths regarding Norwegian wealth-tax and starting a company in Norway: https://fagbladet.no/meninger/her-er-sju-myter-om-formueskatten-6.91.474257.cb3182a204
- incorporation law: https://lovdata.no/dokument/NL/lov/1997-06-13-44
Q: Why you shouldn’t pay consultants with stock in the begining
A: Because when you get VC funding later, these consultants wont have the same insentive as you have to put in the extraordinary efforts required.
Q: Do you need a revisioner?
A: Not unless you bank more than 6mill nok a year. or have 23mil nok in ballance.
Q: Do you need an accountant?
A: No, but you should, to save time. anual cost 10k nok
Q: Are you personally responsible for losses?
A: Not with a AS. If you start a ENK. The you are. so Start a AS