How to switch from ENK to AS and when it pays off
How to switch from ENK to AS and when it pays off?
Good morning, I run an ENK in Norway, my turnover is growing, and I am wondering whether I should switch to an AS. Can I simply change the company form?
This is one of the most common questions we hear from owners of sole proprietorships in Norway. The answer is: an ENK cannot technically be changed into an AS with the same organization number. You set up a new AS and then transfer the business, assets, contracts, and accounting to it.
In this article, we explain when switching from ENK to AS makes sense, what the procedure looks like, what skattefri omdanning is, and what costs and obligations you need to prepare for in 2026.
ENK vs AS - the most important differences before you decide
ENK, or enkeltpersonforetak (sole proprietorship), is directly linked to the owner. You run the business on your own account and at your own risk, and you are personally liable for the company’s obligations with your private assets.
AS, or aksjeselskap (limited liability company), is a separate legal entity. The company has its own organization number, its own assets, and its own obligations. In principle, the owner is liable only up to the contributed capital, although a bank or business partner may require a personal guarantee for a loan or a large contract.
If you are still comparing business forms, our article ENK or AS - which business form should you choose in Norway? may also be helpful.
When does switching from ENK to AS pay off?
Switching to an AS pays off when the benefits of limited liability, a better ownership structure, and the ability to keep profits in the company outweigh the costs and additional administrative obligations.
| Situation | Does AS usually make sense? | Why |
|---|---|---|
| You have large contracts, loans, leasing, inventory, or a risk of claims | Yes | AS limits the risk to the owner’s private assets |
| You plan to bring in a partner, investor, or sell part of the business | Yes | Shares in an AS are easy to divide and transfer |
| You do not need to withdraw all profits privately | Often yes | Profit left in the AS is taxed at the corporate tax rate of 22% |
| You want to be an employee in your own company | Yes | In an AS you can take a salary and build employment rights |
| You have a small service business with no employees and no major risk | ENK is often enough | ENK has less administration and a lower entry threshold |
| You withdraw all profit for living expenses every month | AS does not always give a tax advantage | Salary requires employment, and dividends are taxed additionally |
From a tax perspective, AS is especially attractive when part of the profit stays in the company for growth. In 2026, corporate tax on AS profit is 22%. Only when you withdraw money privately as salary or dividends does additional taxation arise for the owner.
In an ENK, profit is taxed to the owner as business income. In practice, this consists among other things of 22% tax on alminnelig inntekt (ordinary taxable income), trygdeavgift (National Insurance contribution) on business income of 10.8%, and trinnskatt (progressive tax on higher incomes). As a rule of thumb, the effective taxation of an ENK usually falls in the range of about 33% - 50.6%, depending on income.
How do you formally switch from ENK to AS?
The most important rule: you do not transfer the organization number from the ENK to the AS. You set up a new AS and then transfer the business. This means you need to sort out contracts, invoicing, bank accounts, VAT registration, and accounting.
There are two main options:
| Option | What it involves | When it fits |
|---|---|---|
| Ordinary setup of an AS | You set up an AS and start operating in the new company, possibly transferring selected assets | When the ENK has few assets, no inventory, no major fixed assets, and a simple structure |
| Skattefri omdanning | You transfer the business to an AS while preserving tax continuity | When the ENK has assets, liabilities, fixed assets, inventory, a car, leasing, or significant tax positions |
With a normal transfer of assets, the tax consequences must be checked. Selling fixed assets, inventory, or goodwill from an ENK to an AS may trigger taxation in the ENK. That is why, for larger businesses, we first assess whether skattefri omdanning based on skatteloven § 11-20 is the safer solution.
To set up an AS, you need among other things an incorporation document, articles of association, share capital, and a filing with the Foretaksregisteret. The filing must be submitted no later than 3 months after signing the incorporation document.
If you contribute the capital in cash, the payment must be confirmed by, among others, a bank, attorney, auditor, or authorized accountant. If the capital consists of assets other than money, additional documents and auditor confirmation are required.
Skattefri omdanning - when is it worth it and what are the conditions?
Skattefri omdanning is a tax-neutral restructuring of a business into an AS. In simple terms: you transfer the business from the ENK to a new AS without immediate taxation of hidden gains, provided that you meet the continuity requirements.
The most important conditions are specific:
| Condition | What it means in practice |
|---|---|
| The ENK carries out business activity for tax purposes | The activity has permanence, scope, is conducted on your own account and at your own risk, and has profit potential |
| The AS is newly established | Before the restructuring, the company does not carry on normal business |
| The business is transferred | The AS takes over the business, main assets, and liabilities connected to the ENK |
| Ownership continuity is preserved | The current ENK owner receives shares in the AS, without bringing in new owners at the restructuring stage |
| Tax values are preserved | The tax values of assets and items are carried over to the AS under the continuity principle |
| The minimum capital requirement is met | The AS must have at least 30,000 NOK in share capital |
Important: if the net tax value of the transferred assets is too low, you must make up the difference with cash or another contribution so that the 30,000 NOK requirement is met.
Costs and obligations after switching to an AS
An AS gives you more opportunities, but it also requires more administration. Before making the decision, it is worth comparing the costs and ongoing obligations, because they affect the real profitability.
| Item | AS in 2026 |
|---|---|
| Minimum share capital | 30,000 NOK |
| Electronic registration of an AS | 6,825 NOK |
| Paper registration of an AS | 7,912 NOK |
| Aksjonærregisteroppgaven | Every year by 31 January |
| Skattemelding (tax return) | Every year by 31 May |
| Årsregnskap (annual accounts) | Approval within 6 months after year-end, submission no later than 31 July |
| Maximum penalty for late årsregnskap | Up to 69,940 NOK in 2026 |
Every AS keeps accounting records and submits annual accounts to the Regnskapsregisteret. In practice, it is worth setting up a proper accounting system from the start (for example, Efirma.no) or working with an accounting firm (for example, Efirma Regnskap AS). If you are wondering when accounting is necessary and how to organize it, we discuss it in more detail in the article Do you need an accountant in Norway?
If the owner starts taking a salary from the AS, the company becomes an employer. That means an obligation to file a-melding (monthly report on wages and employment), withhold forskuddstrekk (payroll tax withholding), and calculate arbeidsgiveravgift. You file the a-melding every month by the 5th day of the following month.
If the business is subject to MVA, or merverdiavgift (Norwegian VAT), and exceeds 50,000 NOK in net MVA-liable sales in any 12-month period, the relevant entity must be registered in the Merverdiavgiftsregisteret. After switching to an AS, make sure invoices are issued with the correct organization number of the new company. For invoicing, we recommend e-faktury.no. More about the MVA threshold itself can be found in the article VAT registration - when is it required and what does it give you?
The most common mistakes when switching from ENK to AS
The biggest problems arise when an entrepreneur sets up an AS, starts invoicing, but does not formally arrange the transfer of the business.
| Mistake | Consequence |
|---|---|
| Setting up the AS after the deadline for skattefri omdanning | Loss of tax continuity from 1 January of the given year |
| Bringing in a co-owner at the restructuring stage | Risk of violating the ownership continuity requirement |
| Transferring assets without valuation and documentation | Risk of taxation or registration issues |
| Invoicing with the wrong organization number | Problems with accounting, MVA, and business partners |
| Failing to update contracts with customers and suppliers | Risk of disputes over who is the contracting party |
| Leaving the ENK without a decision | Tax and reporting obligations may still remain |
If the ENK has fixed assets, a car, inventory, large receivables, leasing, or tax losses to be transferred, it is not worth taking shortcuts. First, you need to prepare a tax balance sheet and a transfer plan.
FAQ - frequently asked questions
Summary
- Switching from ENK to AS means setting up a new AS with a new organization number and transferring the business.
- AS usually pays off when there is greater risk, planned growth, investors, employees, or when profits are to remain in the company.
- Skattefri omdanning allows a tax-neutral restructuring, but it requires meeting specific conditions and keeping to the 1 January - 1 July deadline.
- AS has more obligations than ENK, including årsregnskap, aksjonærregisteroppgaven, potentially payroll, a-melding, and more accounting administration.
If you need help switching from ENK to AS, call us: +47 21 38 38 21. We help you choose the right option and safely handle the formalities.
Article author: Marcin - marcin@efirma.no