
When
opening a company in Norway through a
franchise the investors will have to choose a legal entity under which their business will operate. In this particular case, the most suitable business forms are represented by
partnerships and
private or public limited liability companies. However, in practice, most of the
Norwegian franchises are registered as
public or limited liability companies and
our team of consultants in company registration in Norway can assist with advice on the
registration of one of these business forms.
What is the tax system applicable to Norwegian franchises?
In terms of taxation, a
Norwegian franchise will be taxed depending on the legal entity that was chosen for
company formation in Norway. In the case of
franchises operating here that are not
tax residents of Norway, the taxation system will be applicable only for the income obtained from commercial activities developed on the local market. As a general rule, the following will apply:
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• taxation of profits obtained from business activities – as a foreign entity, the franchise will be entitled to benefit from the provisions of the double tax treaties signed here;
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• taxation of income deriving from immovable or movable property – the tax rate applicable in this case is of 24%;
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• taxation of employment – the taxation of the company’s employees is applied on a progressive base and it can increase up to a tax rate of 46,7%;
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• value added tax (VAT) – the VAT in Norway stands at a standard rate of 25%.
Types of franchise agreements in Norway
In order to
start a Norwegian franchising business, it is necessary to
sign a franchise agreement and in this country, there are several
types of contracts, which can be detailed by
our team of specialists in company formation in Norway. Investors can choose between
distribution agreements and service agreements.
As their name suggest, the
service agreement is enforced when the
franchisor provides services, while the
distribution agreement is used for
selling, through a franchisee, various products on a given market. Investors may also sign a
production franchise agreement and we invite them to
contact our team of representatives in company registration in Norway for more details concerning these types of
agreements.