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Norway Routes to Market

So you've decided to expand your business in Norway and researched your market. Now it's time to decide how you will register and set up the business. What is the best, most viable option for your company, your products, and yourself? Which is the path of least resistance?

Here are your typical options when expanding a business into Norway:

Limited Liability Companies
There are two types of Limited Liability Company when setting up a business in Norway;

• a private limited liability company (AS)
• a public limited liability company (ASA)

The shareholders are not responsible for legal obligations of the company and liability is limited to the amount of capital they originally invested.

This type of company can be set up in Norway by one or more people and must file for registration within 3 months from the date which the memorandum of association was signed. The founders are personally liable for debts until the company is registered with the Norwegian Register of Business Enterprises.

The minimum share capital required is NOK 100 000 for a private limited liability company and NOK 1,000,000 for a public limited liability company.

Limited liability companies must have a board of directors and it is made up of:

• Two members, one director and one deputy member, if the company has less than NOK 3,000,000
• The board must be made up of three members if the share capital is more than NOK 3,000,000

Partnerships

There are several types of partnerships in Norwegian law:

General Partnership

All partners in this type of business in Norway are general partners with unlimited liability, and are jointly and severally liable.

General Partnership with Shared Liability

This differs from the general partnership in Norway in that the obligations are unlimited, but is shared pro rata between the partners.

General partnerships and general partnerships with shared liability do not need a minimum committed capital.

Limited Partnership

This type of company started up in Norway needs one partner who is limited to the amount of their financial share and one partner who has unlimited liability for the responsibilities of the business. In order to register a limited partnership with the Norwegian Register of Business Enterprises, it is essential that each partner contribute at least 20% of their committed capital. Additionally, the partners have to pay in a further 20% of the committed capital within two years after the date of registration of the partnership.

Each limited partner must have NOK20,000 capital.
General partner must have at least 10% of total capital.

Internal Partnership

This partnership started up in Norway must have at least one general partner with unlimited liability. If there is just one general partner, it is essential to have at least one silent partner. Silent partners can have unlimited liability or liability limited to the partner's share of the capital. The general partners are given any and all rights or obligations; the silent partners are not involved in this process.
A partnership in Norway is established by either two or more individuals or legal entities, who enter into a partnership agreement. Except for internal partnerships, all partnerships must have a written partnership agreement. The agreement must be drawn up referring to and according to the stipulations set out in the Norwegian Partnership Act. The agreement should include:

• The name of the partnership
• The name and place of residence of the partners (except for silent partners)
• The goal/purpose of the partnership
• The municipality of the head office of the partnership
• Whether the partners will make contribute capital to the partnership, and the
• Value of any assets

Branch office

This type of company a branch of a parent company located elsewhere, and run by local management and employs local people. The foreign company is liable for the debts of the branch without limitation. The name of the branch must include "Norsk avdeling av utenlandsk foretak" (Norwegian branch of foreign company). Certain limitations apply regarding the name of the company.
It is not essential for a branch to have a separate board of directors or a general manager. However, if there is no general manager, the branch must register a contact person with the Norwegian Register of Business Enterprises, who must be a resident of Norway and can be either an individual or a company. If a branch closes down, it is essential to deregister it in the Register of Business Enterprises.

Exporting

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Licensing

Licensing is the permission for someone else to use your intellectual property rights: either a patent, trademark, trade secret, or copyright. Different types of license include:

Non-Exclusive License - A non-exclusive license implies that your intellectual property rights can be awarded to more than one licensee.

Exclusive License - A little more complex because, although the license may not be exclusive to one licensee, it may be exclusive to a geographic location, a certain product, or limited area of use. For instance, you may grant a licensee exclusive use of the rights in France, yet grant another licensee its use in Germany.

Patent License - The allowance of another party to use your patented product, design or process.

Trademark License - Trademark licensing means permission is awarded to a licensee to sell a product or service. However, the licensor retains more control in order to ensure that quality is maintained. Quality control is in place to uphold the image of the brand / product / service / licensor, and therefore sustain customer confidence and satisfaction.

Franchising In Norway

Franchising is the licensing out of a business name, product, technique, philosophy, trademark, etc, for a percentage of the income. Instead of setting up new outlets as part of your expansion, you license your existing business blueprint out to franchisees who then set up and manage it for you.

The benefits of franchising your business in Norway include: more freedom, as the franchisee takes on major responsibilities; minimal expense; lower cost and higher profits; potential for fast growth; brand building.

Disadvantages of franchising a business in Norway: although few, rely predominantly on your franchisees. They include: poor quality franchisees; franchisees not declaring all income; poor performance.
Norway has its own federal body to help with advice and resources when considering starting up a franchise in Norway. The Norwegian Franchise Association or the HSH is there for your convenience

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