Do I Need a Local Entity to Hire in Norway?

In Norway, a "local entity" refers to a recognized employing presence, typically a subsidiary or branch office, that allows you to be acknowledged as an employer. This setup is essential for managing payroll and fulfilling local employment obligations.

Without a local entity, you can't effectively register as an employer, handle mandatory social security processes, or issue compliant employment contracts. An Employer of Record (EOR) can serve as a solution, allowing you to hire employees without the need for a local entity.

What is Required to Employ Someone in Norway?

• Local employing entity required to directly employ? Yes (necessary for payroll and compliance with the Norwegian Labour Inspection Authority)
• Payroll registration required? Yes (mandatory registration with the Norwegian Tax Administration)
• Withholding/tax remittance required? Yes (employers must withhold taxes and remit to the tax authority)
• Social contributions required? Yes (mandatory contributions to the National Insurance Scheme)
• Local employment agreement required? Yes (written agreements are standard practice in Norway)
• Mandatory benefits to budget? Yes (includes holiday pay and pension contributions)
• Works council/collective agreements considerations? Often (many sectors are influenced by collective agreements)

Best Options If You're Hiring in Norway

Can I Hire Contractors Instead of Setting Up an Entity?

Yes, but it can be risky if the contractor is misclassified as an employee.

Hiring contractors in Norway allows you to bypass the need for a local entity; however, the risk of misclassification is significant. Norwegian law emphasizes worker protections, and if a contractor's role resembles that of an employee, you could face legal repercussions.

• Ensure the contractor has autonomy in their work.
• Be cautious if the contractor is integrated into your operations.
• Monitor the exclusivity of the contractor's services to your business.

How Long Does Entity Setup Take And What Does It Cost?

Typical entity setup timeline: It often takes 4–8 weeks to establish an entity in Norway, depending on the type of business and required registrations.

Ongoing cost categories (entity route):

• Accounting, bookkeeping, and statutory filings: Estimated 5,000–15,000 NOK per month ($470–$1,400)
• Payroll provider: Estimated 1,000–3,000 NOK per employee per month ($95–$280)
• Employer registrations and recurring compliance: Varies by complexity
• Corporate tax filings and annual reporting: Estimated 50,000–150,000 NOK per year ($4,700–$14,100)

EOR cost components (no-entity route):

• A per-employee EOR service fee (from $399 p/month with Playroll)
• Pass-through statutory costs (e.g., employer social security contributions, typically around 14.1% of gross salary)
• Any optional benefits you choose to provide beyond statutory minimums

How an Employer of Record Can Help You Hire in Norway

Hiring in Norway can be complex, but it doesn’t have to require setting up a local entity or taking on long-term overhead. With an Employer of Record like Playroll, you get a simple, predictable way to hire compliantly while keeping costs transparent and under control. We help you:

• Hire employees in Norway quickly without establishing a local entity, eliminating incorporation costs, ongoing administration, and exit complexity.
• Stay fully compliant with local payroll, tax, and employment regulations with Playroll’s payroll services.
• Control your total employment costs, with a clear monthly EOR service fee (from $399 per employee).
• Focus on growing your business, while we manage contracts, payroll, compliance, and labor law obligations end to end.
• Scale up or exit the market easily, without the financial or legal burden of closing a local entity.