Does a sole proprietorship separate business assets from personal ones?

No. In an ENK the business is not a separate legal entity, so the owner is liable for its obligations with all of their assets, including personal ones. This is the key difference from an AS, where liability is limited to the company's assets.

How is tax settled in a sole proprietorship?

An ENK's profit is taxed as the owner's personal income in the annual return (skattemelding); there is no separate company tax and you do not pay yourself a salary. During the year you pay advance tax (forskuddsskatt). Specific rates and deductions depend on the situation — confirm them with a tax adviser.

How much does it cost to set up a sole proprietorship in Norway?

An ENK requires no capital, and entry in Enhetsregisteret is usually free. A fee only appears when entry in Foretaksregisteret is required (e.g. when trading in goods or hiring). The main costs are ongoing accounting, not the registration itself. It is worth confirming current fees before starting.

Does a sole proprietorship need VAT (MVA)?

Only after taxable turnover exceeds a threshold — as a rule NOK 50,000 over a 12-month period. Below that, an ENK usually does not charge MVA. Registration is done at Skatteetaten, not BRREG. Thresholds can change.

When is an AS better than a sole proprietorship?

Usually when financial risk grows, you plan to hire, want partners or want to separate business assets from personal ones. An AS limits liability to the company's assets but requires NOK 30,000 of capital and full accounting. We expand on the comparison in a separate guide on the AS company.

Sole proprietorship in Norway (enkeltpersonforetak) — taxes and costs

Published: 2026-07-23

Enkeltpersonforetak (ENK) is the Norwegian sole proprietorship — the simplest business form, run by one person responsible for the business. It requires no capital and is cheap to set up, but the owner is liable for obligations with their entire personal assets. For tax, the business is reported together with the owner's income rather than as a separate entity. Below we explain liability, taxes, costs and VAT (MVA) in an ENK, and who this form suits. To compare it with an AS company or see the full registration path, see our umbrella guide on starting a company in Norway.

What is an enkeltpersonforetak (ENK)?

An ENK is a business run by one person who is personally responsible for it. The business is not a separate legal entity distinct from the owner — this is the key difference from an AS. In practice, the owner is liable for the business's debts with all of their assets, including personal ones.

An ENK receives an organisation number (organisasjonsnummer) once entered in Enhetsregisteret, and if it trades in goods or hires, it also registers in Foretaksregisteret. An ENK's name usually contains the owner's surname. The form is most often chosen by freelancers, tradespeople and those starting out on a small scale.

How is a sole proprietorship taxed?

In an ENK, the business profit is taxed as the owner's personal income — there is no separate company tax. The owner does not pay themselves a salary; they report the business profit in their annual tax return (skattemelding). On business income you pay income tax and a national insurance contribution (trygdeavgift), which for the self-employed can be higher than for employees.

During the year, an ENK usually pays advance tax (forskuddsskatt) set by the tax office based on estimated income. It is worth stressing that specific rates, thresholds and deduction rules change and depend on the situation — it is best to confirm the settlement with a Norwegian adviser or accountant. This guide is not tax advice.

What does an ENK cost and what obligations does it have?

An ENK is cheap to start: it requires no share capital, and entry in Enhetsregisteret is usually free (a fee only appears when entry in Foretaksregisteret is required). This is the main cost advantage over an AS.

Obligations are simpler than in an AS but not zero: the business keeps accounts (bokføring), files tax and — once turnover exceeds NOK 50,000 over 12 months — registers for VAT (MVA) with Skatteetaten. An ENK usually has no requirement for an auditor to review its accounts. If the business hires, employer obligations apply.

The main risk is not the cost but personal liability — with higher risk or debts, the AS form protects personal assets better.

Who is an ENK for, and when is an AS better?

An ENK suits a small scale, a single owner and limited risk best — when you value simplicity and a low start-up cost. As turnover grows, with hiring, partners or greater financial risk, limiting liability — which an AS provides — matters more. The table below summarises the main pros and cons of an ENK.

Sole proprietorship (ENK) — pros and cons
Aspect	Pro	Con
Start-up	no capital, cheap registration	—
Liability	—	full, with personal assets
Administration	simpler accounting, usually no audit	no clear separation of business from person
Tax	no separate company tax	profit taxed as personal income (trygdeavgift)

Frequently asked questions

Does a sole proprietorship separate business assets from personal ones?: No. In an ENK the business is not a separate legal entity, so the owner is liable for its obligations with all of their assets, including personal ones. This is the key difference from an AS, where liability is limited to the company's assets.
How is tax settled in a sole proprietorship?: An ENK's profit is taxed as the owner's personal income in the annual return (skattemelding); there is no separate company tax and you do not pay yourself a salary. During the year you pay advance tax (forskuddsskatt). Specific rates and deductions depend on the situation — confirm them with a tax adviser.
How much does it cost to set up a sole proprietorship in Norway?: An ENK requires no capital, and entry in Enhetsregisteret is usually free. A fee only appears when entry in Foretaksregisteret is required (e.g. when trading in goods or hiring). The main costs are ongoing accounting, not the registration itself. It is worth confirming current fees before starting.
Does a sole proprietorship need VAT (MVA)?: Only after taxable turnover exceeds a threshold — as a rule NOK 50,000 over a 12-month period. Below that, an ENK usually does not charge MVA. Registration is done at Skatteetaten, not BRREG. Thresholds can change.
When is an AS better than a sole proprietorship?: Usually when financial risk grows, you plan to hire, want partners or want to separate business assets from personal ones. An AS limits liability to the company's assets but requires NOK 30,000 of capital and full accounting. We expand on the comparison in a separate guide on the AS company.

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This guide is for information purposes only and does not constitute legal or tax advice. Laws and registry rules may change — the information held in the relevant country's official registers is always decisive.