How to Register a Business in the US from Norway

Step 1: Benefits of starting your US business from Norway

Starting a US business from Norway offers a plethora of benefits, opening doors to one of the world's largest and most dynamic markets. One of the primary advantages is the vast consumer base in the United States, which provides ample opportunities for growth and scalability. By tapping into the US market, Norwegian entrepreneurs can access a diverse audience with varied preferences, enabling them to tailor their products or services to meet different needs and maximize revenue potential. Additionally, the US is a hub for innovation and technological advancements, providing businesses with access to cutting-edge technologies and a highly skilled workforce.

Furthermore, the regulatory environment in the United States is conducive to business growth and development. The US offers a supportive legal framework with strong intellectual property protections, helping ensure that innovative ideas and products are safeguarded. Financial incentives such as tax benefits and grants are often available to startups, making it easier for Norwegian businesses to establish a foothold. Moreover, doing business in the US provides enhanced credibility and networking opportunities, allowing Norwegian entrepreneurs to form valuable partnerships and collaborations. This can lead to increased visibility and trust, both in the American market and globally.

Step 2: How to start your US business from Norway

Starting a US business from Norway involves several key steps. Initially, you should decide on the type of business entity that best suits your needs. Common entities include Limited Liability Companies (LLCs), Corporations, and Sole Proprietorships. Each type has its own legal requirements and implications.

Once you have chosen an entity, you will need to register your business with the appropriate state government. This typically involves filing articles of incorporation or organization, paying a registration fee, and possibly registering for state taxes. After registration, you'll need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) for tax purposes. Additional considerations include setting up a US bank account, understanding US tax obligations, and possibly enlisting the help of a legal or financial advisor familiar with US-Norway business operations.

Step 3: Opening a Business Bank Account

A business bank account is a separate account that is used exclusively for business transactions. But why is it important to open a business bank account?

Keeping your personal and business finances separate is crucial. A dedicated business bank account allows you to do just that, making it much easier to track your business’s income and expenses. This clear separation translates to simpler tax reporting come tax season.

But the benefits go beyond bookkeeping. Having a separate account can provide legal protection. It establishes your business as a distinct entity from yourself. In the unfortunate event of a lawsuit or bankruptcy, this separation can help shield your personal assets from business liabilities.

Furthermore, a business bank account can boost your credibility and project professionalism.

It demonstrates to clients and vendors that you take your business seriously and are committed to maintaining accurate financial records. This can be especially important in establishing trust with potential partners.

Finally, a business bank account is essential for accepting payments, even if you utilize a merchant account. Whether you use doola or another service, funneling those customer funds into a dedicated business account is necessary.

doola partners with banks that allow you to open a bank account remotely from anywhere in the world, like Mercury. Shop around and compare different banks’ fees and services.

Look for a bank that offers the features you need, such as online banking, mobile banking, or overdraft protection.

You may also want to consider working with a bank that specializes in small business banking.

Step 4: Understanding Your Compliance Requirements in Norway

Understanding Compliance Requirements for Running a US Business in Norway

Operating a US business in Norway involves navigating a complex regulatory landscape. The following outlines some of the key considerations to ensure compliance with Norwegian laws and regulations.

Legal Structure and Registration

The first step in establishing a business in Norway is deciding on a legal structure. Common options include:

• Aksjeselskap (AS): Similar to a corporation, it offers limited liability to its shareholders.
• Enkeltpersonforetak (ENK): A sole proprietorship suitable for single owners.

All businesses must register with the Brønnøysund Register Centre, which tracks company information and ensures legal compliance.

Taxation

Understanding the Norwegian taxation system is crucial. Key points include:

• Corporate Income Tax: Set at 22%, it is applicable to companies operating in Norway.
• Value Added Tax (VAT): Charged at 25% for most goods and services.

Businesses must regularly report and pay taxes to the Norwegian Tax Administration (Skatteetaten).

Employment Laws

Norway places a strong emphasis on worker rights. Key employment law considerations include:

1. Working Hours: Typically limited to 40 hours per week.
2. Employee Benefits: Includes mandatory holiday pay and pension contributions.
3. Termination Policies: Strict regulations govern employment termination processes.

Data Protection

Compliance with data protection laws is paramount. The General Data Protection Regulation (GDPR) applies, enforcing stringent data handling and privacy standards.

Business Practices

Adapting to local business practices can also facilitate smoother operations. Norway values transparency, sustainability, and innovation.

Establishing a US business in Norway requires thorough understanding and adherence to local regulations. Consulting with legal and tax professionals can further ensure compliance and smooth business operations.

doola offers a Total Compliance package, including bookkeeping services, to help you stay on top of your compliance requirements. This ensures your business operates smoothly and adheres to all legal and regulatory standards.

Step 5: Understanding Your Tax Obligations in Norway

Understanding Tax Obligations for Running a US Business in Norway

Operating a US business in Norway involves navigating a complex landscape of tax obligations. Below are key considerations to help ensure compliance and optimize your tax strategy:

1. Corporate Tax Residency

Determine if your business is considered a tax resident of Norway. This depends on factors such as the location of management and control. A tax-resident company in Norway is subject to Norwegian corporate tax on its worldwide income.

2. Tax Treaties and Double Taxation

The United States and Norway have a tax treaty that helps prevent double taxation. Understand the provisions of this treaty to determine where and how your profits will be taxed. Claiming foreign tax credits can also mitigate double taxation.

3. Value-Added Tax (VAT)

Businesses operating in Norway are required to register for VAT if their annual turnover exceeds NOK 50,000. VAT-included sales and purchases must be documented, and periodic VAT returns filed. Familiarize yourself with the standard VAT rate, which is currently 25%, and any applicable reduced rates.

4. Payroll and Employment Taxes

If you have employees in Norway, you're responsible for withholding income tax, as well as paying social security contributions on their behalf. This includes contributing to the National Insurance Scheme, which provides health and welfare benefits.

5. Transfer Pricing

Transactions between related entities must be conducted at arm's length. Norway's tax authorities closely scrutinize transfer pricing to ensure appropriate tax revenue. Maintain thorough documentation to justify your transfer pricing policies.

6. Accounting and Reporting

Adopt Norwegian accounting standards and ensure accurate financial reporting. Annual financial statements must be filed with the Norwegian Register of Business Enterprises. Adequate bookkeeping helps demonstrate compliance and supports tax filings.

7. Permanent Establishment

Understand what constitutes a permanent establishment (PE) in Norway. A PE triggers Norwegian tax obligations. Common examples include a fixed place of business or significant managerial activities conducted within Norway.

8. Withholding Taxes

Norway imposes withholding taxes on certain types of payments made to non-residents, such as dividends, interest, and royalties. Review these rates and applicable exemptions under the US-Norway tax treaty to avoid unnecessary tax liabilities.

In summary, successfully navigating tax obligations when running a US business in Norway requires a thorough understanding of both countries' tax regulations and treaty provisions. Consulting with tax professionals experienced in international tax law can further ensure compliance and strategic tax planning.

It’s a good idea to consult with a tax professional or an accountant (or to hire these roles in-house) to make sure you’re not missing anything.

doola's Total Compliance package can handle your tax filings for you, ensuring you remain compliant with federal, state, and local tax requirements.

Step 6: How doola Can Assist

doola simplifies the incorporation and setup process for your company, ensuring you’re ready to charge customers, hire your team, and raise funds as quickly as possible.

Fill out your company details in the doola form in less than 10 minutes. Then, we’ll incorporate your company in any of the 50 US states, get your IRS tax ID (EIN) for you, and file your 83(b) tax election if needed. 

doola can also help you open a bank account and start accepting payments even before the IRS assigns your tax ID.

doola founders also gain access to exclusive discounts at leading software partners, one-click onboarding with select partners, and free CPA consultations.

The doola Application

It takes less than 10 minutes to fill out the details of your new company. You’ll choose your company structure (C corporation, limited liability company) and pick a company name.

Our instant company name checker will let you know if it’s available before you submit your application. You’ll add an address and phone number and review and sign your EIN SS4 letter in one click.

Forming the Company

doola will review your application and file your formation documents in the state within one business day. doola charges $297 for our Starter Plan and your first year of registered agent services (a state compliance requirement), and $297 each year thereafter to maintain your registered agent. 

You can also opt for our Total Compliance plan.

Getting Your IRS Tax ID (EIN)

After your formation in the state is complete, doola will file for your company’s IRS tax ID. Founders who provide a US Social Security number, US address, and US phone are eligible for expedited processing. All other users will receive standard processing. 

For standard orders, doola will fax your form SS4 to the IRS and then call the IRS to retrieve the EIN for you to expedite the process if we can, using real-time IRS data to determine when your filing is likely to be available.

Filing Your 83(b) Tax Election

Many startup founders choose to file an 83(b) tax election to potentially save on future personal taxes. doola can file and mail your 83(b) tax election in one click for both US and non-US founders — no trip to the post office required.

We’ll file it using USPS Certified Mail with tracking, and you’ll get a copy of your signed 83(b) election and proof of filing in your Dashboard.

Partner Perks and Discounts

doola partners with a range of third-party tools to offer special pricing or access to founders. We offer discounts on engineering, tax and finance, compliance, and operations tools, including Amazon Web Services.

doola also partners with Mercury to provide faster, automatic onboarding using your doola company information so you can get ready to bank and fundraise even faster.

Founders may also access discounts on other doola products, including up to one year of free credits toward payment processing.

Read our guides for startup founders, or learn more about doola and how we can help you set up your new business quickly and easily.

Turn your entrepreneurship dream into reality today!

We do our best to provide accurate and up to date information, however the information provided here are just guidelines. Please speak with a tax and compliance professional in your country