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Archives for Norway

Should we appoint an external auditor or not?

Today the Nordic countries have small company provisions making it unnecessary to appoint an external auditor if certain conditions depending on size of turnover, number of employees, and size of balance sheet are met. In the start-up phase of a company it may seem appropriate to save on costs and revert to the issues of appointing an auditor later on.

A frequently asked question by SCANDICORP clients setting up companies in the Nordic region is whether they should appoint an auditor in connection with incorporating the company or save that decision until later.

In most cases our advice to the client has been that it makes sense to appoint a qualified external auditor from the very start in connection with registering the company. Naturally this will depend on the business activities of the company, the structure of ownership, appointed directors and other factors to be considered on a case-by-case basis.

The Pros of having an external auditor:

  • Clients, suppliers, collaborators, banks and other parties involved with the company will be more comfortable in their dealings with the new company.
  • There is less risk of unforeseen problems due to the professionalism and qualifications of the auditor.
  • A way to ensure that the company complies with legal and tax regulations.
  • Having access to independent advice and guidance on short notice from someone who knows the company.
  • Giving the shareholders assurance that the accounting, management and directors have performed up to required standards.
  • A foreign investor or director in a Nordic company, not being totally aware of local rules and regulations, will be more comfortable compared to if the company has no external auditors.
  • The tax office may also be more comfortable with tax returns from an audited company.

The Cons of having an external auditor:

    • The costs associated with external audits.
    • Faster preparation of Annual Reports and tax returns.

SCANDICORP is happy to introduce clients to qualified external auditors suiting their particular needs. Some clients may opt for one of the international “Big Four” firms or maybe the next tier of international firms that are all present in the Nordic countries, while other clients might prefer a smaller local audit firm more suited for their particular business.

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High Nordic rankings in ease of doing business

The Nordic countries ranked high in the world for doing business by the World Bank’s annual Doing Business 2016 report.

Surveying a total of 189 countries, the list is widely considered the most authoritative in the world.

The index takes into account regulations that affect facilitating the smooth flow of business. A total of 10 different areas were assessed, included everything from starting a business, to dealing with construction permits, getting credit, paying taxes, trading across borders and enforcing contracts.

Denmark ranked third, Sweden, Norway and Finland as eight, ninth and tenth. repectively

Singapore once again topped the list this year, followed by New Zealand.

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Norway’s 2016 budget – lower corporate tax rate

On October 7th, 2015 the Norwegian conservative government presented both the 2016 budget proposal and a white paper for a tax reform. The budget proposal as well as the white paper have taken into consideration the proposal from the Scheel Committee delivered to the Government on 2 December 2014.

Some basic points of the 2016 fiscal budget:
• Reduction of the corporate tax rate from 27% to 25%
• Tightening of the interest deduction limitation rule from 30% down to 25% on interest paid to associated companies calculated on interest, taxes, depreciation and amortizations
• Increasing tax deductions allowed for R&D
• The assessment of whether the participation exemption applies at the fund investment level is no longer based on whether the relevant fund qualifies as a bond investment fund and equity fund. Instead, the assessment of whether the participation exemption applies is based on the mix of investments carried out by the fund.

Some basic points of the white paper:
• Reduction of the corporate tax rate down to 22% BY 2018
• Introduction of withholding taxes on interest, royalties, and certain forms of asset leases (in particular bare boat charters)
• The government rejects the Scheel Committee’s proposal to eliminate withholding tax on dividends to shareholders in normally taxed jurisdictions
• An introduction of a statutory general anti-avoidance rule (GAAR) and narrowing the Norwegian concept of a company’s place of residency in line with the Scheel Committee’s proposal
• Possible lowering of the permanent establishment (PE) threshold under Norwegian domestic law
• Changes in CFC rules
• Introducing a withholding tax on outbound interest payments

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Nasdaq to launch first north 25 index

Stockholm, October 1, 2015 — Nasdaq (Nasdaq: NDAQ) today announced the launch of First North 25, a new index for the 25 largest and most traded shares on Nasdaq First North and Nasdaq First North Premier. The First North 25 index will be launched and disseminated on October 15, 2015, and is an important part of Nasdaq’s continuous efforts to provide the leading platform for growth companies.

“Supporting small and medium sized enterprises is a part of our Nasdaq DNA”, said Adam Kostyál, Senior Vice President and European Head of Listings. “By launching First North 25, we want to highlight the growing investment opportunities on Nasdaq First North to a broader group of institutional investors, and provide further visibility for companies included in the index.”

Companies included in First North 25 are selected through a two-step process. Firstly, the 30 largest companies measured by market capitalization are selected. The 25 most traded shares within this pool, measured by aggregated trading turnover over a six month period, are selected for the index. The First North 25 portfolio will be reviewed twice a year with new portfolios being effective the first trading day in January and July.

With the First North 25 launch, Nasdaq also introduces four local country indexes for the Nordic markets; First North Sweden, First North Finland, First North Denmark and First North Iceland. The four indices will include shares traded on the respective markets, and are designed to add further visibility for Nasdaq First North in the Nordics.

“Since its launch in 2005, Nasdaq First North has grown significantly and is now home to more than 200 growth companies”, said Adam Kostyál. “Studies show that job creation in small and medium sized companies increase greatly after listing. Providing these companies with visibility and an attractive platform for raising capital is essential for the future growth of our economies.”

First North Sweden, First North Finland, First North Denmark and First North Iceland will be launched and start disseminating on October 15, 2015. For a detailed description of the selection criteria is found here: Read full description

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High Nordic rankings in Global Competitiveness

The Global Competitiveness Report 2015-2016 by The World Economic Forum assesses the competitiveness landscape of 140 economies. Switzerland followed by Singapore and the USA topped the list in this year’s study. Finland’s rank was 8th followed by Sweden as 9th. Norway and Denmark were 11th and 12th in overall rankings.

The Global Competitiveness Report is based mainly on assessments and opinions received from business leaders as well as official statistics, even though other studies are also considered in the analysis of the results. This report is often referred to by politicians, decision makers and various experts.

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Where to grow your business 2015

Grant Thornton, a large international network of independent accounting and consulting firms, just published their annual Global Dynamism Index (GDI) report for 2015 “Going beyond borders: Where to grow your business”. This index combines 22 indicators across five growth areas to rank the business growth environment of the 60 largest economies in the world. Finland shared with Australia the third overall ranking after Singapore and Israel. Sweden ranked as fourth and Norway as 8th. According to Grant Thornton, Finland and Sweden would be the most dynamic economies in Europe from a business perspective. Finland and Sweden ranked high in “Business operating environment” and “Technology”.

In international comparison the strengths of the Nordic countries lies in political and legal stability, a well developed financing environment as well as advanced technology and high R&D spending.

Finland and Sweden should, according to Grant Thornton, offer very good opportunities for you to grow your business.

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Nordea Bank published an outlook for the Nordic countries

The economic performance of the Nordic countries still varies. Sweden is clearly in the lead, with high growth and rising employment. Also the Danish economy has entered a stable recovery phase, although at a more modest pace. Meanwhile, the otherwise strong Norwegian economy is losing steam due to the sharp drop in oil prices, and Finland is still lagging behind the other Nordics due to weak domestic demand and the slowdown of the Russian economy.

 

 

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Planning to expand your business to Scandinavia?

Download our Corporate Fact Sheets today, for free. You will get a PDF document which is easy to read with an overview of how to establish in Sweden, Finland or Norway. Choose a country by pressing one of the brochures: Download for free! The Corporate Fact Sheet will help you to compare common business forms in each country and you can also read about tax, VAT rate, accounting period, name restrictions and foreign exchange controls etc.

Expand your business to Scandinavia, we will help you on the way. Contact us today!

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