Question Norway working contract + consulting

[HoneyBoo]

Help!

I was offered employment contract in Norway. At the same time I wish to keep doing on side consultancy to my clients located in Turkey and Bangladesh. Is it ok to have employment contract and simultaneously some company in another jurisdiction for consulting purposes?

 

[Sols]

Are you an EU/EEA or Swiss citizen or close family member of one? In that case, no problem, as long your employment contract doesn't forbid it (or the employer never finds out).

Are you not? Then you are probably not allowed, as your work visa might be limited to just this one employer. However, enforcement is quite lax in such cases. Especially if you're dealing with non-EU clients. However, you may run into issues if you don't declare the income and pay Norwegian tax on it. At the same time, paying tax could potentially trigger an investigation by the immigration authorities.

 

[HoneyBoo]

Are you an EU/EEA or Swiss citizen or close family member of one? In that case, no problem, as long your employment contract doesn't forbid it (or the employer never finds out).

Are you not? Then you are probably not allowed, as your work visa might be limited to just this one employer. However, enforcement is quite lax in such cases. Especially if you're dealing with non-EU clients. However, you may run into issues if you don't declare the income and pay Norwegian tax on it. At the same time, paying tax could potentially trigger an investigation by the immigration authorities.

Thanks Sols!

I am an EU citizen.

Are there any jurisdictions that you could recommend opening a company that would provide consulting services? The aim is to have as much privacy as possible (always appreciated), low cost and easiness of maintenance, bank account.
A company that could be shareholder in other companies without any issue.

The funds would not be paid out from the company, would be rather reinvested. So no dividend.

I truly appreciate help! I am a newbie

*No accounting would be great too. Is there any existing match above criteria?

 

[Sols]

Are there any jurisdictions that you could recommend opening a company that would provide consulting services? The aim is to have as much privacy as possible (always appreciated), low cost and easiness of maintenance, bank account.
A company that could be shareholder in other companies without any issue.

*No accounting would be great too. Is there any existing match above criteria?

Zero-tax, zero-accounting offshore companies with bank accounts are a thing of the past.

All in all, the easiest will be to just form a Norwegian company. 30,000 NOK paid up share capital is a bit hefty but running costs aren't too bad and the paperwork is quite simple for a small, one-person business.

The only benefit an offshore company would have is lower paid up share capital but when you consider that setting up a modern offshore company with all the bells and whistles costs a few thousand EUR/USD, paying 30,000 NOK in share capital and a few more thousand in admin costs isn't that bad of a deal.

The funds would not be paid out from the company, would be rather reinvested. So no dividend.

The company is tax resident in Norway and has to comply with Norwegian law, though, so you will have to pay Norwegian corporate tax. And to pay Norwegian tax, you probably need proper accounting done to prove how much should be taxed (otherwise they might just tax you on total revenue/apply standard taxation, sjablongtakst).

 

[HoneyBoo]

Zero-tax, zero-accounting offshore companies with bank accounts are a thing of the past.

All in all, the easiest will be to just form a Norwegian company. 30,000 NOK paid up share capital is a bit hefty but running costs aren't too bad and the paperwork is quite simple for a small, one-person business.

The only benefit an offshore company would have is lower paid up share capital but when you consider that setting up a modern offshore company with all the bells and whistles costs a few thousand EUR/USD, paying 30,000 NOK in share capital and a few more thousand in admin costs isn't that bad of a deal.


The company is tax resident in Norway and has to comply with Norwegian law, though, so you will have to pay Norwegian corporate tax. And to pay Norwegian tax, you probably need proper accounting done to prove how much should be taxed (otherwise they might just tax you on total revenue/apply standard taxation, sjablongtakst).

Isn’t it that if there is no income due to investments there is no tax?

I am missing some basic tax knowledge I believe.

Bank accounts in Norway are really painful.

Any other suggestion?

 

[Sols]

Isn’t it that if there is no income due to investments there is no tax?

What you're describing isn't investments, though. You are talking about running an active business from Norway.

I am missing some basic tax knowledge I believe.

The thing that trips most people up today is the concept of tax residence, especially tax residence for companies.

Norwegian law — in line with modern standards — says that any company managed and controlled from Norway is Norwegian for tax purposes.

So if you create an offshore company and do business through that company from Norway, the company is for all intents and purposes Norwegian and has to pay Norwegian tax (corporate income tax, VAT, social insurance, and so on). Any income you derive from it is taxed the same as if the company were a Norwegian AS. So you might as well just form a Norwegian AS and save yourself a nightmare of paperwork.

Any other suggestion?

Learn Norwegian prison slang.