EOR – Employer of Record

We provide personnel and payroll services. Employment, tax returns and employee payments have never been so simple.

What is EOR?
EOR, or Employer of Record, refers to the assumption by another entity of the responsibilities associated with the employment of workers abroad. This method makes it easier to enter a new market, as it relieves you of the need to create new staff. By paying a monthly subscription, you do not have to worry about any formalities.

We take it upon ourselves:
- administrative activities;
- Payroll management;
- payment of taxes;
- insurance for employees;
- and all other employee benefits.

Companies whose business is international often choose to use EOR because it saves time and reduces costs. At the same time, the risks associated with the company's entry into new markets are reduced. The company providing the EOR service therefore commits itself to the requirements:
- Regulatory and legal issues related to the employment of workers;
- immigration;
- and payroll;

The entity does not have a management function, so the contracting company has full control over the management of the posts. The solution we propose saves not only money but also time. The administration of the HR and payroll section becomes much simpler from a strategic as well as operational point of view. EOR is particularly helpful during the first period of activity in a new market.
Effective and sustainable development is based on three pillars: time, budget, experience. Norwegian law operates at national, regional and local level. Navigating these areas efficiently requires experience, which is why it is worth taking advantage of the knowledge of a reliable partner such as Uniqorm. Working with our partner company will help strengthen your position in the market.
Let our partner company Uniqorm handle your HR and payroll matters in Norway. Don't let local taxes and administrative regulations and benefits stop you from growing your business any longer.

They trusted us: Let's build your staff abroad together.
Simple terms and express pace of creating jobs. Dealing with Norwegian contractors has never been so easy. Let us help you and take advantage of our international background and experience, which will save you valuable time. Ensure your employees are paid in the local currency, medical care, pension insurance and other employee benefits with one good decision.

We are the market leader in EOR services in Norway.





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What is the EOR service and what are its characteristics in Norway?
Norway
How do I get started in the Norwegian market?
Setting up a business
Employer of Record in Norway
What are the forms of business in Norway?
Sole trader Sole trader (Enkeltpersonforetak – ENK)
Capital company
Branch office of a foreign company
Company employees
Visa
Misclassification
Personal income tax
Probationary period and termination of contract
Holiday leave
Health insurance
Sickness insurance
Maternity and paternity leave
Employee benefits in the EOR model

The development of a company most often involves the expansion of the company into foreign markets. However, such an undertaking must be preceded by thorough preparations. Not only to gain information about the local market, but also to prepare our company technically for new, unfamiliar regulations and standards.

Norway is a country where, according to the rankings, it is quite easy to do business. The country’s infrastructure is especially favourable for small businesses. However, it is important to bear in mind that, despite everything, there will also be some difficult issues to resolve. Hence, many entrepreneurs today opt for an innovative solution that allows them to safely take their first steps in the “unknown land”. It turns out that setting up a new business is not the only solution. Many entrepreneurs choose to use the EOR service, which allows them to start their activities almost immediately. What is the Employer of Record service, and is it worth using when entering the Norwegian market? Let’s find out.

What is the EOR service and what are its characteristics in Norway?

The Norwegian market is quite demanding. Knowledge of the law is only part of the story, as it is also necessary to have a good understanding of the market, which is characterised by specific features. Of course, a lot depends on the industry in which you are operating.

Nevertheless, setting up a fully independent company is quite time-consuming. In addition to this, the entrepreneur will need qualified accountants, lawyers and advisors who know what Norway stands for.

We have already talked about the possibility of setting up a business in various forms, from a sole proprietorship to a company to a branch office. However, it turns out that there are more possibilities. One of the most commonly considered is Employer of Record. What is the EOR service?

Employer of Record is a form of business based on remote management of a team of employees. How? Well, with the help of an external entity that provides such services. Such organisations include companies that have a smaller footprint, as well as those that have branches almost all over the world. Companies that focus on providing services globally are commonly referred to as PEOs (Professional Employment Organisation) and GEOs (Global Employment Organisation). Both are concerned with the provision of Employer of Record services, but are primarily used to enter different markets of the world simultaneously. By using the services of a smaller organisation, the entrepreneur can focus on the chosen target market and start his or her activities almost immediately. How is this possible?

If a company is well established in its home market, but would like to expand into foreign markets, but is not strong enough to start in several places at once, then a single point of focus is chosen. Targeting can start with a reduction in risk, thanks to the help of EOR entities, as the entrepreneur receives competent assistance from specialists as part of the service, to whom he or she would normally have to pay separately, which in the end is usually much less cost-effective. Thus, hiring a professional organisation involves the help of, among others, an accountant and a lawyer, thus saving money and time. In addition to this, by choosing proven service providers, very often the support you receive at the same time minimises the risk of failure, as the entrepreneur is guided by people who know the market in question well, as they have been operating in the area for many years (this applies to reputable companies). This is why the Employer of Record in Norway is one of the more popular solutions.

Employer of Record in Norway is an opportunity to test the market and adapt ongoing activities to its needs. This happens through an entity that is present on the ground and familiar with reality. This allows you to optimise your operations, which does not immediately have to mean setting up a separate company, hiring employees, creating payroll, registering with various tax registers, taking on responsibility as an employer and much more.

Norway

At the outset, let us consider what conditions are like in Norway. Is the economy stable and what are the growth opportunities for new entrepreneurs?

Norway is a country located in the north of Europe. It has vast areas with a low population density due to its climate and mountains. The extensive sea areas around its territory are the habitat of many species of sea creatures and the route of many ships.

The country borders Finland, Russia, Denmark and Sweden. The Kingdom of Norway has a rich culture, a strong economy and prospects for new businesses. Highly developed education means that the market is full of well-qualified workers. However, it is worth remembering that skills are the main currency of employees. In addition, the state authorities, together with trade unions, ensure that they have decent working conditions. For companies, this entails a high cost of living for employees, who must be provided with, among other things, social benefits and other perks. This obligation is, of course, incumbent on the employer. Therefore, if the entrepreneur chooses to work with an EOR entity, then costs and responsibilities are reduced significantly, as the formal employer is our hired organisation and not our company.

At the same time, the country’s population is approximately 5 million people, which consequently translates into the specifics of both the labour market and the economy, which is more developed in some sectors and less developed in others. The most developed sectors certainly include the chemical industry, the fuel industry (oil, gas) and aquaculture. Ecology, the transport industry, IT and ICT, on the other hand, are sectors that Norway wants to develop and are therefore worth investing in. In addition to this, funding can be obtained for investments in the development of the northern regions of the country. The reason for this is that the northernmost region is not very attractive to live in due to the climate. It does not help that lower tax rates, reduced electricity prices and “free” student loans are provided for residents of these areas. The state authorities are planning even more concessions in the near future, hoping that this will encourage the population to settle in this part of the country. From an entrepreneur’s perspective, this is quite an interesting prospect, which will reduce employment costs while attracting skilled workers. It is worth noting that by using the services of Employer of Record entities in this case, the entrepreneur will not have to set up a physical branch of the company there and, in addition, does not have to worry about registering employees or settling taxes. This is because these tasks are automatically transferred to the service provider, who follows the instructions of the client company.

According to the World Bank, Norway ranks 4th in terms of per capita income. Entrepreneurs feel particularly comfortable there in terms of dealing with official matters, which can largely be done online. And the tax system is based on simple rules. However, it should be noted that Norway is not a member of the European Union, but only a part of the EEA – the European Economic Area; and the so-called Schengen Area. Of course, this simplifies the establishment of business relations with other countries in many respects, but it should not be forgotten that the Kingdom of Norway also has a number of regulations separate from European law, which must be observed by entrepreneurs wishing to open their own business or a foreign branch of a company there. This is completely different with the EOR service, as Employer of Record in Norway allows you to use the structures of a legal entity that is already operating in Norway. At the same time, the entrepreneur has access to qualified accountants, lawyers and other specialists who can advise on how to circumvent various formal pitfalls.

Navigating the Norwegian market is difficult in that a company must convince a society that has a high degree of trust in local entrepreneurs and demands above all good quality and high standards from new players.

It is worth considering that the layout of public holidays and days off in the fjord country differs from ours. Public holidays in Norway include:

• New Year’s Day – 1 January;
• Maundy Thursday;
• Good Friday;
• Easter Sunday;
• Easter Monday;
• Labour Day – 1 May;
• Constitution Day – 7 May;
• Ascension Day – 13 May;
• Whit Monday – 24 May;
• Christmas Day – 25 December;
• Boxing Day/Second Day of Christmas – 26 December.

Employees are charged a normal day's pay for the said public holidays, even though they do not work during this time.

How do I get started in the Norwegian market?

As previously mentioned, entrepreneurs have various options when entering the Norwegian market. One of them is to establish a new company or a foreign branch. An alternative, which is no less interesting, is to employ staff in the EOR model. Both of these options have a lot to offer. It all really depends on the entrepreneur’s needs and preferences, so let’s take a closer look at them in order to assess which of them will be better for your business in the current situation.

Setting up a business

In order to start the process of establishing a new business in Norway, the entrepreneur should notify the relevant authorities that represent the state apparatus. This is a fairly simple step, which is most easily done via the domain altinn.no. Once this simple formality is completed, a company account should be set up with a bank, which will allow business transactions to take place. The next step is the entry in the register. The register to which the entrepreneur should report the business depends on the type of business. In Norway, there is:

• the VAT payers’ register, or Merverdiavgiftsregisteret. Entrepreneurs with an annual turnover of more than NOK 50.000 are obliged to register;
• the commercial register – Foretaksregisteret – in which companies with more than five employees on their payroll or who run a business as an AS company must register;
• Aa-registeret, or the employers’ register. Everyone who has at least one employee must register with the register. This means that a company that wants to start up in Norway, but already has well-functioning structures in another country, will not only have to join this register, but will also have to set up a foreign branch of the company. In addition, the company bears the costs of employing an employee, which amount to a total of approximately 18.1% of the agreed salary:
  • pension plan – 4%;
  • employee social security – 14.1%;
  In addition to this, annual payments must be taken into account, which include:
  • holiday bonus, which amounts to 12% on salary;
  • a holiday bonus from Employer Social Security (ER SS) of 1.7%.

Registries are only part of the process of establishing a company or branch in Norway. It is also worth noting that the desire to operate in certain economic sectors requires permits. This applies in particular to the construction sector and companies that provide cleaning services. The regulations require employees to have trade cards, which are a kind of confirmation of their skills and thus the right to practise the profession. The cost of obtaining one badge is approximately NOK 104 net. In addition to this, employees must be properly trained in health and safety rules. Training should also be given to the owner of the company, who is the employer or subcontracts tasks, and to the manager, who is responsible for the safety of employees.

Ongoing formalities in a Norwegian company include paying taxes and keeping company records in accordance with the state’s generally accepted guidelines.

In summary, when entering the Norwegian market, an entrepreneur should:

1. Register the business;
2. Open a company account with a local bank (bedriftskonto);
3. Register the business in the relevant registers;
4. Meet deadlines with authorities;
5. Pay the relevant taxes;
6. Keep company records;
7. Observe health and safety rules;
8. Monitor payments.

Employer of Record in Norway

The situation is quite different when operating through an EOR service. This is due to the fact that the formal employer and the entity responsible for all obligations related to the operation of the company is in this case the hired EOR entity. However, the entrepreneur should take into account the fact that it is most often the entrepreneur’s responsibility to find suitable candidates for the position and to carry out the recruitment. In the next phase, the Employer of Record provider in Norway enters the scene.

The provider, to whom the entrepreneur will entrust the management of their personnel and the supervision of the employees’ performance of their duties, will be responsible for, among other things, registering the employees with the authorities, obtaining personal numbers for them and, in the case of employing a foreigner, obtaining visas. Once these formalities have been completed, the EOR entity is responsible for inducting the workers into their duties.

As the EOR entity assumes the formal function of the employer, it is responsible for paying the relevant taxes, insurance and administrative tasks.

The entrepreneur, using the Employer of Record service, is contractually obliged to pay a fixed monthly rate. It is worth remembering that it is advisable to use a reputable service provider who offers a fixed price guarantee. If the rate changes, it is only by mutual agreement between the parties and is the result of a change to the existing mode of operation, which may be extended or limited in some way. For, the company using the EOR has the right to manage the positions and has full freedom in filling them.

It is also worth noting that usually the role of the EOR is not limited to managing the payroll or ensuring that official matters run smoothly, but also advises the client on among other things, business culture in order to avoid faux-pas and to work seamlessly with other business partners. In addition, the client company does not have to worry about company documentation, as this is taken care of by the service provider.

So how does the cooperation with an EOR entity work in a nutshell?

1. The entrepreneur finds a suitable candidate for the job and, if he wants to hire him, sends his details to the EOR entity with which he is working.
2. Together with the formal employer, the entrepreneur sets the rate of pay and the period of employment.
3. The client company submits at the end of the month an hourly report of the employees employed in the EOR model.
4. The EOR entity handles the payment and documentation.

What are the forms of business in Norway?

There are many different types of legal business structures in Norway, but among the most common are:

• sole proprietorship;
• partnership (capital company, limited liability company, general partnership);
• a branch of a foreign company, or NUF for short (Norskrefistrert utenladsk foretak).

The legal form of a business translates into further action into obligations and the manner of settlement with authorities, which is why an entrepreneur should first familiarise themselves with the various types of forms in order to be able to fully optimise their operations on the Norwegian market. In the case of a branch of a company, it is important to take into account that the subsidiary will need to have the legal form in Norway that best suits its form in its home jurisdiction. Hence, many companies choose to use, in the first moments of their presence on the Norwegian market, the Employer of Record service in Norway, which allows them to get started while the branch registration process is ongoing.

Sole trader (Enkeltpersonforetak – ENK)

The establishment of a sole trader is advantageous on a limited budget as no start-up capital is required for its establishment. In addition, the official procedures take between four and six working days, assuming that the entire process takes place via an electronic system. However, in order to be able to use this solution, the entrepreneur must have a Norwegian personal number (obtaining this requires prior contact with the relevant authorities) and MinID codes, which are used to log in to the office’s website.

The most important information for the entrepreneur here should be the fact that this form of business is not recognised by the authorities as a legal entity, but a physical one. Consequently, the owner of the business is liable for all of the company’s obligations with all of his or her property. At the same time, he is subject to personal income tax at 22%. Social security contributions are voluntary in this case, although their voluntary payment guarantees the entrepreneur assistance in case of accident, illness or other events that make it impossible to run the business.

Entrepreneurs who need employees in their one-person company are obliged to register as employers. However, if you are not ready to do so, you can use the EOR service to shift the obligation to formally declare the employed employee to an external entity. The monthly rate for the full service is discussed and consulted in advance between the parties, so it is worth arranging a free meeting with a consultant who will provide us with details of the offer tailored to our needs.

Capital company

An AS company, or capital company – Aksjeselskap – is a legal form of business that can take up to four weeks to set up. In addition to this, the initial capital is at least NOK 30 000 and stamp duties entail costs of NOK 5 570 to NOK 6 797. Due to the nature of the business, the shareholders’ assets, so the company is only liable for liabilities up to the amount of the share capital.

An incorporated company is top-down obliged to keep accounts. The regulations governing these matters require a thorough knowledge of local law. Otherwise, both the company and its shareholders may be exposed to serious consequences as a result of negligence, non-compliance with the facts and in many other respects.

Income tax on the company’s profits is paid based on the amount of income from previous years. The company will receive the relevant documents from the office in January of each year, and will pay advance payments in two instalments, with the first payment due on 15 February and the second on 15 April. In addition, companies should pay particular attention to certain dates, as certain documents must be submitted to the office by this time: by 31 January - aksjenærregisteroppgaven; by 31 May - skattemelding for aksjeselskap; by 31 July - årsregskap.

Running a company requires the entrepreneur’s full commitment and knowledge of local regulations. It also often takes time to build up sufficient start-up capital. In addition, regardless of the size of the company, many entrepreneurs want to be sure and test the market first when making such a major investment. This is why one of the more popular practices is to work with an EOR service provider, so that we do not have to invest all our efforts and resources in the venture right away. In addition, this solution is convenient in that, after a “trial period”, the entrepreneur can transfer the employees hired under the EOR model to the established company in Norway.

Branch office of a foreign company

Operating as a branch of a company is a form provided for entrepreneurs who already have their business in another jurisdiction. A subsidiary is therefore the result of the development of an established company. In order to enter the Norwegian market as a subsidiary of a foreign company, one must:

1. Register our NUF with Brønnøysundregistrene. This can be done via the official website brreg.no. Registration is necessary in order to obtain an organisation number, which is essential for the operation of the company;
2. Complete the registration application. For this you need: the memorandum of association, the company’s articles of association, entry in the register – KRS or CEIDG, company address details, powers of attorney;
3. Provide data: name of the branch, scope of activity of the company, data of persons who are authorised to undertake legal obligations, data of the management board (in the case of a company).

The registration process in this case may vary depending on what legal personality our Norwegian branch will have. Even before the official activities start, you can make use of trusted EOR service providers. Employer of Record in Norway will allow you to optimise your operations to be as efficient as possible. Access to specialists in the fields of accounting, law bookkeeping, administration, market, etc. will allow you to quickly start running your business, which will be officially managed by an external company. Of course, as the recipients of the service, we will have full control over the tasks of employees and positions, as well as nothing will happen without our knowledge and consent. On the other hand, once the formalities registering our branch as a fully legal entity have been completed, we will be able to continue with the venture we have started.

Company employees

The company’s employees should be declared to the authorities of the relevant authority, as the employer is obliged to pay the relevant contributions and taxes for each employee. In addition, the employee will be called to account for personal income tax at the end of the fiscal year and will need pay slips for this, which are issued to registered employees. Employees in the EOR model are looked after by a formal employer, which is the provider of the services, where taxes are paid and relevant documents are issued.

The company hiring the employee, according to the current law, should sign a contract with the employee within one month of employment. An entrepreneur who hires employees through an Employer of Record in Norway is not officially responsible for signing the contract, as personnel matters are handled by the service provider, who undertakes the registration of employees with the authorities. The entrepreneur merely agrees in advance with the candidate on the rate of pay and other details of employment, and then, in consultation with the hired external entity, submits a finished document to the employee. The contract document should contain, in particular, information on:

• the terms and conditions of employment;
• your job description;
• the amount of remuneration (in Norwegian kroner);
• the amount of benefits (also in Norwegian kroner);
• conditions and termination of the contract.

The working week in Norway starts on Monday and ends on Friday. The average working time is 7.5 hours per day and 37.5 hours per week, with overtime not exceeding 10 hours per week and 25 hours in a 4-week period. Very important in this case is the issue of overtime pay, which is respectively:

• 140% of the wage for an additional hour of work on a weekday;
• 200% of the overtime rate for an extra hour on a night shift and at weekends.

Visa

It is not uncommon for our company to want to employ foreign workers, or to transfer an employee from the head office to a branch. What does a foreign employee need in order to work legally in Norway?

A visa is an essential document that entitles foreign nationals to stay in the Kingdom of Norway. The type of visa depends largely on the purpose of the stay. If the purpose is to work, it will be necessary to obtain skilled Labor, i.e. a work permit. In order to obtain a visa, you must present the following to the Norwegian authorities:

• your passport, together with a copy of the completed pages of your passport;
• a signed application from stating your genuine intention to take up employment in Norway;
• two recent photographs with a white background of the same size as your passport;
• a tenancy agreement or other document proving residence in Norway;
• a completed form from UDI, the Norwegian Directorate of Immigration;
• school certificates, etc. – documents needed to confirm the applicant’s professional qualifications;
• applicant’s curriculum vitae;
• completed and signed UDI checklist.

A work visa is issued for a period of two years. However, after this time, an extension of the residence permit can be sought. Please also note that it can take up to eight weeks for your application to be processed. The cost of obtaining a visa is NOK 5 400, while in dollar terms it costs $593. It is also worth remembering that when choosing to employ workers through the Employer of Record service in Norway, the issue of a work visa will be fully managed by the service provider, who takes responsibility in dealing with the authorities to legalise the employee’s stay.

If you are applying for a visa if you are posted from your home office to work in a branch office in Norway, then you must:

• have completed a three-year vocational training programme at upper secondary level;
• have a university degree or diploma;
• have evidence of a specific vocational qualification.

Persons who come to Norway for business purposes apply for a Schengen Visa Type C. A business visa is issued by the Norwegian authorities for a maximum of 90 days within 180 days. Once you have entered Norway, it is not possible to extend your visa.

Misclassification

Work permits are not the only worry that rests on the shoulders of an entrepreneur, as problems can also arise when you do not employ workers. It appears that a partnership with a contractor or a sole proprietorship may not be viewed in the same way by the office. This is then a case of misclassification. This is very often the case if you are not sufficiently familiar with Norwegian employment law. The result of such a mistake is usually fines and other penalties. This is why you have to be very careful when you want to start your company’s expansion into the Norwegian market by working with subcontractors. This is especially the case if you decide on long-term cooperation with one subcontractor. Then, in many countries, not only in Norway, the administrative authorities of the state decide to reconsider the status of our subcontractor. Often, it is also the case that the subcontractor itself, after a long period of cooperation, claims employment rights, because, despite the formal subcontracting agreement, it fulfils all the criteria that qualify it as an employee. Of course, the case is quite different when the entrepreneur uses the services of an EOR, as he or she is not formally seen as a subcontractor by the authorities. Therefore, working with EORs is one of the safer solutions, which, especially at the beginning of a presence in a new market, reduces the risk of misclassification.

Personal income tax

All employees, both residents and non-residents, are liable to pay income tax, the rates of which are respectively:

• 1.9% for income between NOK 180 800 and NOK 254 500;
• 4.2% for income between NOK 254,501 and NOK 639,750;
• 13.2% for annual earnings between NOK 639 750 and 999 550;
• 16.2% above NOK 999 550.

Probationary period and termination of contrach

Norwegian employment law requires the entrepreneur to draw up a contract between the employee and the company no later than one month from the start of the employee's work. Employment is often preceded by a probationary period, which may not last longer than 6 months. After this time, the employee is fully entitled to all social benefits and other entitlements. If, for some reason, the contract needs to be terminated, the law and agreements with the employees' unions must be followed, which clearly state that the notice period depends on how much the employee has worked for the company:

• during the probationary period, the notice period cannot be less than 14 days;
• employees who have worked less than five years should receive one month's notice;
• employees with between 5 and 10 years of service with the company are entitled to two months' notice;
• 10 years and over:
  • employees between the ages of 50 and 55 should be given 4 months' notice of redundancy;
  • employees between the ages of 55 and 60 are entitled to five months' notice;
  • employees over 60 are subject to a six-month notice period.

Holiday leave

The holiday benefit to which every employee is entitled is usually paid around June. Norwegian law stipulates that the basic length of holiday is 4 weeks and one day. However, it is quite common for companies to extend this to five weeks. The rate of pay during holidays with a minimum annual holiday is 10.2% of annual salary. If the employee is entitled to five weeks' holiday, the amount increases to 12%. In addition, contracted members of staff who have reached the age of 60 are entitled to 12.5%.

Health insurance

Medical care is available to all residents of Norway and EU citizens. However, it is worth bearing in mind that public health care facilities are usually very crowded, and although the level of service is of a high standard, many residents opt for private health care for this reason. Many Norwegians also seek medical care in another country.

Sickness insurance

As a general rule, an employee's sickness insurance in Norway is not entirely a matter for the Labour and Welfare Office alone, as in the case of sick leave the office only pays benefits from the 17th day of illness. In contrast, the first 16 calendar days are covered by the employer. The employee is then obliged to notify the company of his or her indisposition and provide the leave within four days. The usual amount of the benefit is six times the basic social security amount. Changes in this area only occur if there are other arrangements in the contract between the company and the employee.

Maternity and paternity leave

Pregnant women employed by the company are entitled to take the first 12 weeks of maternity leave before giving birth. After the baby is born, they are obliged to stay on leave for 6 weeks, unless a medical certificate is presented with a recommendation to return to work sooner. For the period of the aforementioned 12 weeks before the birth and 6 weeks after the birth, the mother receives 100% of the salary. After this time, the benefit received will reduce to 80% of the previous salary.

Fathers of newborn children are entitled to 12 weeks of leave to support the mother after the birth.

Employee benefits in the EOR model

The aforementioned issues of benefits and leave when employed through an Employer of Record entity in Norway may differ from standard benefits. Obviously, the thing refers to the supplementary benefits package, not to those that are mandatory, because even if an employee is hired in the EOR model, contributions to mandatory benefits still have to be paid by the employer (i.e. the EOR entity). Nonetheless, many companies that provide EOR services offer their clients attractive fringe benefit packages that can attract job candidates to the company, while keeping those already working there happy with the benefits. Thanks to this, and thanks to the employment contract, the entrepreneur can count on the turnover of employees in particular positions not being too high, which in turn translates into a more stable position for the company in the Norwegian market.

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