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Opening a Branch vs. a Subsidiary in Norway

Opening a Branch vs. a Subsidiary in Norway

Updated on Friday 03rd November 2017

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The foreign companies which intend to extend their business in Norway should consider two main options: either opening a branch in Norway or a subsidiary. Each of these versions provides advantages and drawbacks that you need to analyse and detail before taking a decision of which option is more suitable to your business objectives. The difference between the two legal forms consists in the type of liability that they hold and in the degree of independence which they might have from the parent company. Before initiating the opening procedure it is advisable to contact a law firm in Norway for professional counselling in these matters. 
 

Steps for the establishment of subsidiaries in Norway

The opening of a subsidiary is a choice for foreign investors who intend to extend their portfolio in this country. Subsidiaries can have an independent management because they have legal personality. Usually organized as limited liability companies, subsidiaries can take strategic decisions for which they bear responsibility. Subsidiaries are often subject to tax incentive, which may help speed up its development on the Norwegian market. The parent company can own shares in the Norwegian subsidiary, and most of the capital in the subsidiary is owned by the foreign company, however, the newly organised legal form remains a separate legal entity. Concerning the legal structure for subsidiaries, you might want to know that most of them are registered as private or public limited liability companies.

A subsidiary can be established in the same industry with the parent company or in a different one, depending on the marketing strategy adopted by the board. A new bookkeeping must be created in order to keep record of the payments and taxes applied to the subsidiary

The registration of a subsidiary in Norway must go through a series of steps such as:

 
  • Finding a unique name, according to the Trademark Act;
  • Opening the bank account for the future subsidiary with a local bank;
  • Deposition of the capital;
  • Preparing the documentation for the Registration;
  • Application for VAT number, if the revenues of the subsidiary go over the amount of NOK 150,000.

If you are interested to find out more on the advantages of opening a subsidiary in Norway you can rely on our Norwegian lawyers who remain at your disposal with updated information.

Opening a branch office in Norway 

The branch is an entity which depends on the parent company. This is also why in Norway, the branch must have attached at the ending of its name the standard abbreviation NUF, which stands for ’Norwegian branch of foreign company’. Nevertheless, the company can employ its preferred currency and it remains entitled to the same legal treatment as the Norwegian enterprises.  

In order to open a branch in Norway there are several documents concerning the parent company which must be provided on registration. These documents require most of the time professional notarization. The most important files that you will need to include in your aplication for registration are:
 
  • articles of association of the parent company, providing information on the profile and objectives of the enterprise;
  • the board’s decision to establish a branch in Norway;
  • the designation of the branch, name and address in Norway;
  • other documents required for the purpose of having evidence on the good standing of the Parent company. 
     
These documents need to be translated prior to the registration procedure. The company may choose to be represented instead of going itself directly through all the branch establishment procedures. A good choice would be to call on our lawyers in Norway and employ their legal services. 
 
Don’t hesitate to contact our law firm in Norway in order to prepare in good time the establishmeny of a branch or subsidiary in this country.  
 

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