Hire Contractors in Norway

Norway, with its mountainous landscape and midnight sun, has always been a beautiful destination for tourists. But do you know what else it is known for? It is a great place for business ventures. 

The country’s vast natural resources, low level of corruption, and efficient business culture are some of the major factors behind this. 

But the most important reason is the lack of communication challenges. 

The people of this country are well-versed in multiple languages, including English, German, and French. This is a huge benefit, especially for foreign businesses that wish to hire contractors in Norway. 

They no longer have to deal with language barriers, which means greater output and productivity.

Additionally, Norway's workforce is highly skilled. Oil, gas, and seafood are some of the major industries in Norway.

So, if you are keen on hiring contractors in Norway, then this guide is for you. 

Let’s get started by looking at how to hire overseas contractors.

How to Hire Independent Contractors in Norway

One way to hire in Norway is by hiring directly. You must first set up a subsidiary and then register your business. 

It includes various steps, such as,

• Choosing a company name according to the Norwegian naming conventions.
• Preparing the necessary incorporation documents.
• The documents are being submitted to the Norwegian Register of Business Enterprises.
• Paying the required registration fees.
• Depositing your startup capital at a bank.
• Registering your subsidiary with the Registrar of Business Enterprises.
• Filing for VAT registration

After this, you can start with the hiring process. This will involve,

• Specifying the project requirements.
• Create a job description and post it on platforms like LinkedIn or Indeed.
• Reviewing the resumes of job applicants.
• Interviewing potential candidates and onboarding them.

Directly hiring contractors in Norway is extremely complicated and expensive. 

Unless you are handling a long-term project, it is best to avoid this method. 

Hiring Contractors through Skuad AOR

Another way to hire international contractors in Norway is through an AOR, like Skuad. The main benefit of this technique is that you do not have to establish a separate entity in this country. Skuad already has a legal presence in Norway. This means you can start the hiring process directly. 

Skuad will digitally onboard contractors on your behalf, which usually takes a few minutes. It will manage all the payment processes and ensure that your contractors are paid on time. Furthermore, Skuad has a built-in IP system. Its main goal is to safeguard your company’s IP under Norwegian laws.

The best part of this method is that you no longer have to stress about compliance. Skuad already has an in-house team of experienced legal professionals who will handle all compliance-related matters. 

These include formulating legal agreements, overseeing the taxation requirements, and maintaining accurate worker classifications.

How to Pay Contractors in Norway

You can pay contractors by setting up a payroll in Norway. You can use digital wallets, money orders, or even checks to process payments to your workers. 

But, without understanding the local tax deductions or even the latest currency exchange rates it becomes difficult. 

An easy way is to pay contractors with an agent of record in Norway, Skuad. It includes 

various features, like,

• Payroll in 100+ currencies
• Automated invoicing and payments
• Expense and benefits management
• Regulator compliance
• Flexible payment scheduling

Looking to hire employees in Norway? - Use an employer of record Norway.

Hiring Contractors Directly vs Hiring Contractors via Skuad

Let’s take a look at this table, where we will discuss the differences between direct hiring contractors and hiring contractors with an agent of record/contractor software.

Now, let’s see how much does it cost to hire a contractor in Norway.

Cost of Hiring Contractors in Norway

In Norway, a contractor can earn up to NOK 1,002,508 per year and NOK 482 per hour. 

However, this is just a tentative figure. Thus, the cost of hiring contractors in Norway will differ based on various factors. 

Say you are looking for an independent contractor with a track record of success in their respective fields. Their hourly charges will be far more than those of a person who has just started freelancing in Norway or is fresher.

The cost will also change based on the type of project you are offering. You need to offer your workers a higher compensation for tasks that require specialized skills, in contrast to generic administrative projects.

Now, let’s look at converting from contractor to employee salary.

How to Convert a Contractor into an Employee in Norway

To convert a contractor into an employee in Norway, you first need to understand the country's labor laws. They have various guidelines related to the terms and conditions of the working relationship between an employer and employee. 

For example, every employee in this country needs to be provided with 21-25 working days of annual paid leave.

Once you learn these regulations, it will be easier for you to maintain compliance. You can then begin with the negotiation process. Talk to your contractor about this change. 

Discuss their salary expectations, working conditions, benefits, and so on. 

Draft a written employment agreement for your contractor. After it has been signed, start with the onboarding process. This will include collecting relevant personal information for background checks and sending them a formal welcome mail, among many other things.

As the last step, add them to your existing payroll system. Make the necessary social security and tax deductions, and provide the mandatory employee benefits.

Challenges of Hiring Contractors in Norway

Even with so many benefits, businesses continue to face certain challenges when hiring contractors in Norway. They include the following,

1) Understanding the Labor Laws of Norway

Any person who carries out a commercial activity in Norway is considered to be self-employed. Commercial activity means that the person is responsible for the goods and services they sell, uses their own equipment, and can generate profit over time. 

As an independent contractor, the individual does not enjoy the same rights as an employee. For example, they receive sick pay with 80% coverage only from the 17th day. Employees, however, have 100% coverage, starting from the first day of illness. 

Unlike employees, independent contractors are not entitled to any form of unemployment benefits. 

Furthermore, contractors in Norway are not protected from termination at all. Their termination rights are only based on the wording of the employment contract.

It is very important for you, as an employer, to maintain this distinction when hiring international workers in Norway. It will help you to avoid the risk of worker misclassification and legal fines. 

However, without an agent of record in Norway or contractor software, it can be very difficult. This is especially true when you are unaware of the general civil law that governs the independent contractor status in Norway.

2) Tax Liabilities for Contractors in Norway

In Norway, self-employed people are required to file and pay their own taxes. They must also pay an advance tax the same year they earn money. The amount is calculated based on the profit they expect to make.

Independent contractors do not receive a salary. They are required to invoice their clients for their services and receive payment under a cash register system. 

According to Norwegian taxation rules, if a contractor's business income is more than NOK 50,000 per year, they must keep accounts and retain documentation for five years. 

Additionally, if the vatable turnover is more than NOK 50,000 over a 12-month period, then the contractor needs to apply to the VAT register. 

The good thing is that you don’t need to complete this paperwork by yourself as an employer. But you still have to ensure that your contractors fulfill all these responsibilities. It can get quite difficult, especially when hiring multiple contractors for your organization. 

Contractor management software can help you deal with these complexities of international contractor payroll processing.

Hire Contractors in Norway with Skuad

International hiring can be tough. When hiring contractors in Norway or any other country, you must keep yourself updated with all labor and tax legislation. 

This often gets confusing. The result? Non-compliance and expensive legal challenges.

But, with Skuad by your side, you no longer have to stress about all these problems. We are the ultimate global employment solutions provider and will help you at every step of this journey. This includes managing invoicing, expense approvals, reimbursements, and more. 

Also, with Skuad, you can convert your contractors to employees at any time. We keep all past records and employment history intact, so you can always enjoy a smooth transition process. 

Connect with our experts today and enjoy customized international hiring solutions only with Skuad.

FAQs

1. Can I hire an independent contractor from another country?

Yes, you can hire independent contractors from any country across the world. It is a very effective way to access global talent and increase your business’ flexibility. 

2. Can contractors work internationally?

Yes, contractors can work internationally. They are known as global contractors and are commonly hired by businesses for specific projects or temporary periods.

3. How do I pay a foreign contractor?

A simple way to pay your foreign contractor is through Skuad’s global payroll solution. It features a multi-currency payroll and has built-in regulatory compliance. This lowers the risk of non-compliance and legal penalties.