Expand your organization into Norwaywithout a Norwegian entity
The Scandinavian country of Norway is widely seen as an excellent place to do business. Its educated workforce, high standard of living, and advanced economy all make it a good choice for any organization’s international expansion.
However, as with any country, Norway can present some difficulties for foreign businesses. The language barrier is an obvious factor, but businesses should also consider the complex and wide-reaching Norwegian labor laws that dictate employment protocols.
At Horizons, we specialize in helping organizations expand internationally, including into Norway. Our professional employer organization (Norway PEO), employer of record, and payroll outsourcing services provide everything necessary to expand your business into Norway, whether or not you have registered an entity there already.
Our in-house recruitment team can also source, recruit, and onboard your local workforce, as well as handling any ongoing HR administration. Our dedicated team will provide everything you need to expand into Norway as efficiently as possible and can potentially save you thousands in expansion costs.
Our Norway PEO simplifies your expansion
Horizons enables your business to expand its operations into Norway, without having to establish a legal subsidiary.
Employment & Labour Laws in Norway
📝 Employment contracts in Norway
Norway is famous for having some of the most comprehensive labor laws in the world. It is an excellent place for workers, which contributes to the high standard of living, but this can also make it difficult for businesses to ensure compliance with the law.
It is always important to provide your employees in Norway with a written contract of employment, including all relevant details of employment such as salary and benefits. It needs to be written in Norwegian and use the local currency of the Norwegian Krone.
By partnering with our Norway PEO, Horizons’ team of local experts can provide assistance for drafting strong employment contracts that are compliant with local regulations.
⏰ Working hours in Norway
The normal hours of work in Norway are 40 hours per week and nine hours per day (including a one-hour lunch break). Anything over this will usually need to be paid at overtime rates, which are 140% of normal pay (or more).
Overtime limits are in place, with employees generally not allowed to work more than ten hours overtime in a week, 25 hours over a four-week period, or 200 hours over a one-year period.
📅 Public holidays in Norway
New Year’s Day
Second Day of Christmas
🏖 Norway vacation leave
Norwegian employees are entitled to four weeks and a day of paid vacation leave, but many employers offer five weeks of leave. This is usually covered by the employer, and is accumulated over the first 12 weeks of each year.
The pay is usually equivalent to 10.2% of the qualifying period, or 12% if the allowance is five weeks, or 12.5% if the employee is over the age of 60.
😷 Norway sick leave
Employers in Norway will usually need to pay for the first 16 days of employee sick leave. Beyond this, the government covers payments (unless a different agreement has been made beforehand).
Sick leave payments are limited to 600% of the standard national insurance payments.
👶 Parental leave in Norway
Women in Norway can take three weeks of paid leave before giving birth, and generally need to take a minimum of six weeks paid leave after giving birth. Men are entitled to two weeks of unpaid leave.
Parental leave payments are usually made by the government, not employers. There is a salary cap beyond which parental benefits will not be paid, but employers may choose to cover the extra for their employees.
Employees can take up to 47 weeks with 100% of salary, or 57 weeks (with 80% of salary) until their child turns three years old.
💰 Terminations and severance in Norway
Notice periods of between three months and six months are usually provided to Norwegian employees prior to termination, and three months is common. The exact length depends on several factors, such as age, length in a role, and so on.
Employees in a probationary period are entitled to a shorter notice period, which is usually around two weeks. Probation generally lasts around three to six months.
Norway has particularly robust employee protections, so it’s crucial that proper procedures are followed, such as holding an official meeting about the termination where employees can bring a representative, and that employers have proper cause for termination.
Navigating employee terminations and handling severance packages can be complicated for companies expanding overseas for the first time. Horizons’ Norway PEO can mitigate risk for foreign companies and provide guidance through this process.
🏦 Taxation in Norway
Norway’s extensive social benefits are funded by relatively high rates of taxation. Income tax is a flat rate of 22%, but there is an additional ‘tax bracket rate’ which works progressively, so higher earners pay more. This bracket tax ranges from 0% to 16.2%, depending on income level.
Employees must also make national insurance contributions, which is 8.2% of gross wage/salary income, with lower contribution rates for other forms of income such as pensions. Employers must also contribute to this fund. The rates vary depending on salary, but usually are between 16% and 29% of salary.
Employers also need to pay towards employee pension funds, but the exact terms can vary depending on your circumstances and your employees’ preferences.
For companies, the tax rates differ for either resident or non-resident businesses. Resident businesses are taxed on their worldwide incomes, and non-resident businesses are taxed only on Norway-based income. The rate of corporate tax is 22% of profits.
🏥 Health coverage in Norway
Norway has a universal public healthcare system, so all healthcare is free at the point of use. Because of this, it is not the norm for employers to offer private health insurance, but some do choose to as part of their benefits packages.
💳 Norway compensations & benefits
Compensation laws in Norway
Norway does not have a legally regulated minimum wage. However, trade unions may have negotiated a minimum wage in some industries, so it’s important that you understand the relevant rules for your situation before hiring.
Benefit management in Norway
Setting up your Norwegian benefits system can be a confusing process if you are not familiar with the complex labor laws, language, and cultural differences. Be prepared for a time-consuming process and potential delays.
Horizons can help you bypass this complicated part of your Norway expansion by offering benefit system outsourcing that can save you time and money. Our experts will advise you on the best course of action and take care of your benefit setup and management, helping you focus on the rest of your expansion.