ENK or AS – which business structure should you choose in Norway?
ENK or AS – which business structure should you choose in Norway?
In Norway, the two most common ways of running a business are sole proprietorships (Norwegian: enkeltpersonforetak, abbreviated as ENK) and limited companies (aksjeselskap, AS).
Both options have their advantages and limitations. In this article, we explain how ENK and AS work, who each structure is best suited for, and what you should consider before making a decision. The information is up to date for 2025. We encourage you to read the full article.
ENK – Sole proprietorship (Enkeltpersonforetak)
Enkeltpersonforetak (ENK) is the simplest and most popular business structure in Norway, especially among people who want to start working for themselves without large initial investments. In 2025, ENK remains the best solution for one-person service businesses such as construction, cleaning, transport, or IT.
Ownership and registration
An ENK can be established by any individual who has a Norwegian personal number or a temporary D-number. Registration is done via Altinn.no and costs 2,683 NOK (2025). In many cases, the business can be registered in less than one day—often within a few hours for simple activities.
No startup capital required
ENK does not require any initial share capital, which is a major advantage for those who want to start a business quickly and at low cost.
Liability
The owner is personally liable with all personal assets for the company’s obligations. This means that if the business incurs debt, creditors may claim against private assets such as a personal bank account, car, or even the owner’s home.
Taxes and income
ENK is not a separate legal entity. All business income is treated as personal income. The owner pays income tax according to the standard tax rules (social security contributions, ordinary income tax, and progressive tax brackets). There is no salary or dividend payout—all profit is taxed, regardless of whether it is withdrawn or left in the business.
Accounting
If annual turnover exceeds 50,000 NOK, the business must register for VAT (merverdiavgift) and keep proper accounts. With higher turnover or employees, additional reporting to Altinn is required (usually handled by an accountant).
Only ENK businesses with turnover below 50,000 NOK are exempt from bookkeeping obligations, but they must still keep documentation such as incoming and outgoing invoices.
Social security contributions and benefits
The owner of an ENK pays trygdeavgift (social security contributions) and advance tax payments themselves. As a self-employed person, you are entitled to sick pay only from day 17 of illness, and only at 80% of the calculated income base.
It is possible to purchase voluntary insurance from NAV (frivillig forsikring) to receive sick pay from day 1 and/or at 100%, but this involves additional costs.
No employee rights
When running an ENK, you are not employed by your own company. This means you are not entitled to paid vacation, severance pay, or unemployment benefits (dagpenger), even if you have regularly paid taxes and social contributions. You also do not receive holiday pay (feriepenger).
Business development
ENK does not have legal personality and cannot have partners. If you plan to expand your business or look for investors, this can be a limitation. Additionally, an ENK cannot be sold as a company—you can only transfer assets, and the new owner must register a new business in their own name.
ENK is an ideal option for people starting a business in Norway who want to run a small operation with minimal bureaucracy. However, before choosing this structure, it is important to carefully consider liability and social protection, as ENK does not offer the same level of security as an AS.
AS – Limited company (Aksjeselskap)
Aksjeselskap (AS) is the most common choice for entrepreneurs who are planning a larger business, intend to hire employees, or want to limit their personal financial risk. Unlike ENK, an AS is a separate legal entity, meaning the company exists independently from its owner.
Ownership and registration
An AS can be established by one person or several shareholders—no partner is required to start the company. Registration is done via Altinn.no. A registration fee of 6,500 NOK (2025) applies, and the required documents must be prepared: articles of association (vedtekter), a memorandum of incorporation, and a bank account for depositing share capital. Once approved, the company is registered in the Brønnøysund Register Centre.
Share capital
The minimum share capital for an AS is 30,000 NOK. These funds can later be used for business expenses, so they do not need to remain unused—but they must be documented during the incorporation process. Share capital can also consist of assets, such as equipment of equivalent value.
Liability
The owner of an AS is not personally liable for the company’s obligations. Liability is limited to the contributed share capital. This is one of the main advantages of an AS, especially for businesses operating in higher-risk industries or handling large contracts.
Profit distribution
In an AS, the owner can receive a salary as an employee and/or dividends from company profits. Company profits are taxed at a 22% corporate tax rate (ordinary income tax). Salary is taxed like that of any other employee, while dividends are subject to capital income tax (effectively 37.8% in 2025). This allows for flexible income planning.
Accounting and administrative obligations
An AS must maintain full accounting records in accordance with Norwegian law and submit annual financial statements (årsregnskap). It is also required to keep board documentation, hold general meetings, and report changes in the company structure. These formal obligations apply even if you are the sole owner and director.
Employing the owner
The owner of an AS can employ themselves as an employee and receive a salary, with taxes and social contributions calculated in the same way as for any other employee. This provides full social benefits—sick pay from day 1, paid vacation, holiday pay, pension rights, unemployment benefits (dagpenger), and other benefits offered by NAV. The company also pays employer social security contributions (arbeidsgiveravgift).
Social benefits
Employment in an AS is a major advantage compared to ENK. An AS employee (including the owner employed in their own company) is entitled to 100% sick pay from day 1 of illness (the company covers the first 16 days, after which NAV takes over). They may also be entitled to unemployment benefits, provided the requirements are met (income from salary, not dividends).
Business growth and sale
AS is a flexible legal structure—it allows for easy introduction of new shareholders, sale of shares or the entire company, attracting investors, and signing contracts. This makes AS an ideal structure for businesses planning growth, scaling, or international expansion.
Thanks to its legal personality and structured framework, AS offers greater security and better access to social benefits, but it also requires more administrative effort and financial commitment. It is an ideal choice for entrepreneurs with long-term plans, higher financial risk, or ambitions to build a professional brand in Norway.
Who should choose ENK, and who should choose AS?
The choice of business structure depends on individual plans, business scale, and risk tolerance.
ENK is suitable for small businesses and beginners. Registration is quick, startup costs are low, and administrative requirements are minimal. However, the owner bears full personal liability and does not have full employee rights (lower social benefits).
AS is recommended for larger projects, collaboration with others, or investment plans. Limited liability protects the owner’s private assets (you only risk the invested capital). AS also makes it easier to attract partners and investors and provides full employee benefits (e.g. unemployment benefits from NAV). On the downside, AS requires more capital and involves more formal procedures (registration, accounting). The decision should always be made based on individual circumstances, ideally in consultation with an accountant.
ENK vs AS – comparison
We hope the table below will help you choose the right business structure in Norway:
| Feature | ENK (Sole proprietorship) | AS (Limited company) |
|---|---|---|
| Ownership | 1 individual (no partners) | 1 or more owners (individuals or legal entities) |
| Legal personality | No – owner and business are the same | Yes – separate legal entity |
| Liability for debts | Unlimited personal liability | Limited to company capital |
| Startup capital | No requirement | Minimum 30,000 NOK (2025) |
| Registration cost | 2,683 NOK online | 6,500 NOK online |
| Taxation | Personal income, progressive tax | 22% corporate tax + tax on salary/dividends |
| Owner salary | No | Yes – possible |
| Social contributions | Paid by owner, no employer | Paid by company as employer |
| Sick pay | 80% from day 17 (unless insured with NAV) | 100% from day 1 when employed |
| Unemployment benefits (dagpenger) | Not available | Yes – if employed and requirements are met |
| Pension and vacation | No paid vacation | Yes – as for regular employees |
| Accounting | Required at higher turnover | Full accounting and annual reports |
| VAT (MVA) | Mandatory above 50,000 NOK turnover | Same VAT threshold as ENK |
| Sale of business | Not possible | Possible (shares or entire company) |
| Investors | Not possible | Yes |
| Scalability | Limited | High |
| Market perception | Less formal, often local | More professional, preferred in B2B |
Summary
There is no single “best” option—it all depends on your needs and plans.
- ENK allows for the fastest and cheapest startup, but comes with full personal liability and limited social benefits.
- AS requires more capital and formalities, but protects private assets and provides full employee rights (higher sick pay and access to unemployment benefits).
Poles starting a business in Norway should choose the structure that best matches the scale of their activity and their risk tolerance—small one-person businesses usually work better as ENK, while larger projects with growth plans or investors are better suited to AS.
Are you thinking about registering a business in Norway?
Whether you are considering ENK or AS, contact us at
+47 21 38 38 21.
We are available Monday to Friday, 9:00 AM–9:00 PM, and will be happy to help!
Article author: Marcin – marcin@efirma.no