Many consultants and freelancers who are about to start on their own hit the same obstacle early in the process: a potential client is ready, but requires you to invoice through a registered limited company. Without an organization number you cannot sign the agreement, and without the agreement you cannot start.
A shelf company solves this problem directly. You take over a ready-made registered Norwegian AS with an organization number, and can in principle start on assignments the same day the takeover is completed.
Why do consultants need an AS faster than others?
For most business owners, a few weeks' wait for a new limited company is an inconvenience. For consultants and freelancers it can have a concrete and measurable cost.
Consulting assignments tend to arise suddenly and with short deadlines. A client needs capacity next week. A framework agreement must be signed within a few days. Staffing agreements with clauses requiring the supplier to invoice through an AS do not necessarily leave room to wait for the Register of Business Enterprises.
For a consultant with a daily rate of a few thousand kroner, the extra cost of a shelf company compared with self-incorporation can equal one to two lost assignment days. For most, that is a simple calculation.
Shelf company or sole proprietorship?
Many consultants start as a sole proprietorship because it is the fastest and simplest. A sole proprietorship can be registered digitally with Brønnøysund in a few minutes and is up and running immediately. There is no share capital, no registration fee of any size, and no formal board requirements.
But a sole proprietorship has some clear limitations:
- You are personally and unlimitedly liable for the business's obligations.
- Surplus is taxed as personal income, including national insurance contributions, without the tax advantages an AS can give by retaining capital in the company.
- Many larger clients and consulting brokers require the supplier to invoice through an AS, not a sole proprietorship.
Tax-wise, an AS is normally more favourable from around NOK 500,000–600,000 in turnover, but this depends on your specific situation, cost structure and whether you take salary or dividends. It is worth checking this with an accountant.
If you need to get started quickly and have a client that requires an AS, a shelf company is a natural answer.
What you actually take over
A shelf company is an ordinary Norwegian limited company already registered in the Register of Business Enterprises, but that has never traded. You take over the shares, and then change the name, purpose, board and address so the company fits your business.
You will find a thorough overview of the concept in what is a shelf company, and when is it worth it.
What you get at the time of takeover:
- A Norwegian limited company registered in the Register of Business Enterprises
- An organization number
- NOK 30,000 in share capital
- Prepared transfer and company documents
What you do not get immediately, and must arrange yourself:
- Bank account – must be opened after takeover
- VAT registration – done when turnover passes the threshold, or by advance registration
- Engagement agreement in the company's name – entered into after takeover
Purpose and articles: make sure the company covers consulting activity
A shelf company is normally delivered with a general purpose covering most forms of business activity. Check that the purpose clause actually covers what you intend to do.
For most consultants – advisory work, IT, engineering, marketing, recruitment, management consulting and similar – a general purpose will normally be sufficient. Some clients, especially in financial advisory or regulated professions, may however require specific wording.
Purpose and articles can be changed after takeover. The change is filed with the Register of Business Enterprises and triggers a public fee.
Organization number and invoicing
The organization number is ready from the moment you take over the company. You can put it on quotes and agreements immediately.
But invoicing requires that you also have a bank account to receive payment. Clients will normally not pay to a private account for business activity, and banks' own customer due diligence processes for business accounts take time.
In practice this means you should start the bank process in parallel with the takeover – ideally the same day. Most Norwegian banks offer digital application for a business account, and processing time varies from a few days to a couple of weeks depending on the bank.
VAT registration
Consulting activity is generally subject to VAT. Value added tax must in principle be calculated and reported when turnover exceeds the current VAT registration threshold in a calendar year.
You can however apply for advance registration if you have entered into agreements that will give you turnover above the threshold, and you have already had acquisition costs in connection with the business.
The shelf company is not delivered VAT-registered. That is something you arrange yourself afterwards.
Incorporate an AS yourself vs. buy a shelf company: calculation for consultants
To make the assessment more concrete: an independent consultant with NOK 7,500 in daily rate and 20 billable days per month has a monthly income of NOK 150,000. That gives around NOK 7,500 per day.
The extra cost of a shelf company compared with self-incorporation is the provider's fee – see what does a shelf company cost in Norway for current prices.
If the shelf company means you can start two assignment days earlier, the extra cost is already recovered. For many consultants this calculation is straightforward.
A full comparison of time, cost and risk is in incorporate an AS yourself or buy a shelf company.
What you should do after takeover
The takeover itself is quick. What takes a little time is getting the company ready for ordinary operations:
- Change name, purpose, board and address to what you want. This is filed with the Register of Business Enterprises.
- Open a business account. Start the application process early – the bank carries out its own customer due diligence.
- Enter into the engagement agreement in the company's name. Not as a private individual – in the company.
- Consider VAT registration. Talk to an accountant about whether you should register in advance.
- Set up simple accounting routines. The shelf company has existed since the incorporation date, and you must submit accounts for the entire period from incorporation – not just from takeover.
The last point is worth noting: the limited company was incorporated long before you took it over. The first accounting year under company law began the day the company was incorporated, not the day you took over. In practice this means you need an accountant to help you handle the incorporation period correctly.
Consultants in regulated professions
Some consulting services require approvals, authorisations or permits regardless of company form. This applies for example to:
- financial advisory and investment advisory
- audit and accounting
- estate agency
- legal practice
- healthcare services
A shelf company gives you the company form, but not the necessary permits. Make sure the company has, or applies for, the necessary permits in time.
Summary
For consultants and freelancers who need a limited company quickly, a shelf company is usually the most practical choice. The organization number is ready from day one, the process is short and predictable, and the extra cost compared with self-incorporation is in many cases lower than the value of one lost assignment day.
What you pay extra for is time. And for most consultants, time is the scarce resource.
Related articles
- What is a shelf company, and when is it worth it?
- Incorporate an AS yourself or buy a shelf company – what should you choose?
- What does a shelf company cost in Norway? Full price overview
- Checklist: what to check before buying a shelf company
Stift helps you get started quickly
At Stift you can take over a ready-made registered Norwegian AS with prepared documents and an orderly takeover process – without ordinary incorporation time.
Unsure what fits best for you? Contact us and we will help you assess the right solution.
