Starting a Business in Norway

I'm not really sure what I've gotten myself into yet, but there's a good reason this blog has been a little more quiet than usual over the summer.  A few months ago I wrote a post about why I was excited to not have a job right now. I had a period of self-reflection when I realized that entrepreneurship is my calling in life. It all started several years ago when I got involved in the creation of what has become a blossoming beverage business in the United States. Several years of working on that project and being a member of the Board of Directors was an enlightening experience, which I've since moved on from this year. And while I love this travel website and still enjoy the new opportunities it brings us every day, it's more of a hobby from a financial standpoint.

Photo by Haruko16 from Flickr.

So I launched a new business here in Norway about a month ago. Barn Borealis is a website for helping parents in Norway find what they need in their local area, as well as a content portal that I'm working with some very talented writers to develop. It's still in its infancy, but slowly gaining support on Facebook and hopefully once I expand the promotional efforts, will catch on here. It's all a big experiment, but one that I'm very excited to share with our darling readers here who have been so marvellous in supporting us for the last two and a half years as we built this website.

Before you go rushing over to see it, I should warn you that the whole thing is in Norwegian. What I'm most proud of is the fact that I built it completely by myself from existing platforms. I'm not a computer programmer or coder so there was quite a bit of a learning curve with this project and, along with my first adventure with a do-it-yourself hosting company, I've had more than my share of total meltdowns this year (with the subsequent elation and euphoria that comes when what looked like a game-ending problem gets solved). For me, there is nothing more fulfilling than creating something from scratch, especially when you've never done it before.

But I did not forget that this is a travel blog and so the purpose of this post is not to spruik about my new company (I promise!) I want to talk a little about starting a company in Norway, which goes in hand somewhat with starting a business in Europe. Mine is what they call an aksjeselskap (AS), which is a limited liability company - their version of what we would call a corporation in the United States. Getting started is pretty easy, especially considering that the government lowered the capital barriers to entry at the beginning of the year. You only have to put in around $5,000 of initial start-up capital and they no longer require an auditor to keep an eye on your books if your turnover is less than around half a million dollars (don't quote me on that conversion). According to the version I have of the English Bedin guide, "stimulation of the entrepreneurial spirit is a policy of national priority....the businesses our welfare will depend on 10-15 years from now do not yet exist." Perhaps you've heard of those high Scandinavian taxes and generous welfare systems?

It is true that Norway offers quite a few grants and loans for new businesses through Innovasjon Norge and, according to the Global Entrepreneurship Monitor (GEM), is among the top entrepreneurial countries in Europe. I don't have an opinion on this matter yet, but plenty of other people do. But this is Europe we're talking about and my trusty friend, The Economist, never lets me down with timely articles about that subject. The 28 July issue included a topical feature titled Les misérables, citing the continent's "chronic failure to encourage ambitious entrepreneurs." The article opens with a description of the start-up scene in hip Berlin, saying that it's a good thing the city is so "enticing" to blossoming 'treps because most are unlikely to succeed there due to the usual gloomy suspects: risk-aversion, regulation and the stigma of failure among Europeans. Once in awhile someone tries to seduce us with an article about how fantastic it is to do business in the socialist countries. Er, right...come join us then, sir?

So far the primary complaint I have is my understanding that Norway taxes investors on the amount of money they put into new ventures. So for that 30,000 kr I put into my company, I can enjoy a bill that must be coming next year. I wonder how I'll sell that to potential investors. The registration fees themselves are quite pricey - almost $1,000. And Norway lacks the cheap services that start-ups in my native USA enjoy. Bank fees are ridiculous (Facebook, for example, charges my credit card every two days for ads and guess what? I pay for each individual Visa transaction at the end of the month). On top of that you have VAT at 25% so you really don't think about importing most services from overseas (though often they will be cheaper even with the VAT). Start a business and you finally understand why everything in Norway is so expensive.

And it will be a long, prosperous time before I can even think about hiring an employee. Not only do companies pay high salaries to offset the cost of living, but also 14.1% of salary in social services contributions and pay for sick leave for the first 16 days. And for the high salary you can expect only 37.5 hours of work a week (minus coffee breaks, of course) and a very difficult situation should you wish to terminate an employee who is under-performing. I wonder if the average entrepreneur enjoys such work hours. Before people start jumping down my throat about inhumanity and "what did I expect when I moved here? go back to my own country," let me just stay that I know the realities of starting a business - and what a start-up company needs are little machines of ambition, who aren't deterred (and in fact, thrive) on high-pressure situations where they might be a little sleep deprived for months at a time. Founders usually forgo a salary for long periods of time as they get their companies off the ground. Early employees often take sweat equity in exchange for a normal salary. This is what it takes. Working for a start-up is risky, though with enormous rewards if the company is successful. We only do it because we are in love with the game and the possibilities. Norway can boast several successful start-ups so somehow some people are making it work, but it is difficult to not feel shackled from the start.

But, hey, I signed up for this and part of what I'm loving about it is the opportunity to get stuck into a part of the culture that I wouldn't have access to otherwise. When you become an expat, you have to choose your identity, especially if you are the "trailing spouse." I spend little time at expat functions because my goals are different. What I'm interested in are business events and gatherings of other entrepreneurs. These are realities of this country as much as visiting the museums or heading off on day trips. You can't do everything, so I'm choosing a slightly different Norway experience than I'd originally envisioned.

What have been the positives of running my company? First, it has helped to accelerate my language learning, albeit more on the reading and writing side. Second, I'm exploring the lifestyle of a vast majority of Norwegians: working in a small company. Apparently 99.5% of all businesses in Norway have fewer than 100 employees. Finally, it's an exciting project and one that is allowing me to use all the skills I have learned until now. Even if it isn't successful, I won't regret it because I tried something new and I learned new skills that can only help me on another venture.

Of course, there are negatives. I spend a disproportionate amount of time behind my desk. I am not afraid of failure but I agree with The Economist that this is not the prevailing attitude in Europe. Most of the Norwegians I've met seem to wonder why I wouldn't just get a job (though one kind local man surprised me the other day with his enthusiasm for my company). I've already experienced the plague of established companies not wanting to deal with "tiny ones." And finally, I don't have my usual network of friends and business contacts in this new place. I'm used to chatting with those people about new ideas (both mine and theirs) and we all get excited about them, brainstorm about each others' projects and promote each others' work, forming a support system. I have always had this in my life and to not have it here is really confronting and difficult. But there is always another day to meet new people and as I get more involved with other entrepreneurs here I hope that will change quickly!

If you're looking to get started on your own business in Norway, consult the following websites:

bedin.no

altinn.no

Have you ever started a business in a new country? What are your tips?

 

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42 Comments on "Starting a Business in Norway"

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Anqi
This post is directly to my situation this month as I just founded my business in Norway, Trondheim area to be exact 🙂 And absolutely I could feel a lot same way as you described regarding the entrepreneurship atmosphere in Norway, include the challenge of lacking social network in early phase business. This is because Norway is not having a robust start-up ecosystem. In the bright side, this could be a lot of opportunities for entrepreneurs in Norway to contribute. From your post, I could also relate to that it’s hard to find contacts here in Norway that we could… Read more »
Mary
Hello Andrea, I hope you are still successful in your endeavor. I just wanted to tell you that I came across your site while researching for my Business Communications class. I have a group project due in three weeks, concerning doing business in another country and which forms of communication would we use there to advertise. It is a fake Kelly Services Staffing business. If you have time, would you mind dropping me a line and fill me in on how to reach the audience – businesses looking to hire personnel – and which mediums would you think the people… Read more »
Sarah
Hi Andrea You have inspired me! My husbands work is bringing us to Norway and they keep saying we will find you a job or something to do, but after working in an office for sooooo long its not an option. I have seen a gap in the market for a product/service and think i am going to go for it. Back in the uk i would know what to do but i am going to take the bull by the horns and do it! I love Norway and the people here, and although i haven’t experienced the winter here… Read more »
Inspiring Travellers
Oh that’s fantastic, Sarah! I found it a bit difficult to promote my business in Norway as people can be a little “wary of new things.” Some advice for what it’s worth: 1. Don’t set up a Limited (AS) Company until you start making money and it becomes worth your while from a tax perspective. It’s costly and a lot of paperwork. 2. Be prepared to pay for marketing. I spent so much money on Facebook ads, for example, because I had an online business. Nothing is free in Norway. Also, people there don’t use Twitter that much, more Facebook.… Read more »
Sarah
Thank you for your reply. I am really looking forward to the move, and although very nervous i am looking forward to being my own boss! Thanks a bundle for the extra tips. I have had a fab week in Arendal, shame it is raining today! Yes EVERY ONE is on holiday (all in Arendal i think) my husband has been the only one in his office most of the week. Im thinking of selling products and services to the equine industry as the nearest shop is over an hour and a half away and they don’t sell on line.… Read more »
Inspiring Travellers

I don’t know what the market is for that but sounds like a great idea – good luck! =)

Andrew

Congrats and all the best Andrea :). I know a few people in Norway (met through AIESEC, its a youth organisation), they are pretty nice and warm people. Again all the best. 🙂 🙂

Inspiring Travellers

Thanks so much, Andrew! =)

Michelle

I can’t imagine how much extra courage it would take to start a business in a country you don’t speak the language. I have found that entrepreneurship has been calling me for the past few years but I have been unable to find an idea that I think is worth committing to.

Good luck!!

Inspiring Travellers

Thanks so much, Michelle – good luck with finding something you want to work on! =)

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