Business structure 2026
ENK vs AS: which suits you best?
Comparison of sole proprietorship (ENK) and limited company (AS) in Norway. Learn when it pays to switch from ENK to AS, and when the sole proprietorship remains the better choice in 2026.
ENK vs AS comparison
| Category | Sole proprietorship (ENK) | Limited company (AS) |
|---|---|---|
| Personal liability | Unlimited — owner is personally liable with all assets | Limited — only the share capital is at risk |
| Share capital at start | None | Minimum 30,000 kr |
| Tax on profit | Personal income tax (up to ~50% effective) | Corporate tax 22% + dividend tax 37.84% |
| Sick pay | Limited (optional insurance costs extra) | Full coverage as employee of your own AS |
| Pension accrual | Low (only basic public pension on business income) | Better — mandatory occupational pension (OTP) |
| Accounting obligations | Limited accounting obligations for most | Full accounting + annual report to the Register of Business Enterprises |
| Audit requirement | No | Can opt out (revisor fravalg) if all three are met: turnover under 7 million kr, balance sheet under 27 million kr, no more than 10 full-time equivalents (årsverk) |
| Administrative costs | Low (1,000–5,000 kr/year) | Higher (10,000–30,000 kr/year for accounting, payroll, OTP) |
| Social security | 10.8% on personal income (personinntekt) in 2026 | 7.6% as employee + employer social security contribution (arbeidsgiveravgift) (standard rate 14.1%, varies by geographic zone) |
| Ability to hire | Yes, but rarely practical | Yes, natural structure |
| Retirement savings | Requires separate private savings | OTP provides base, can be expanded |
| Selling the business | Difficult — only assets can be sold, not the company itself | Easy — shares can be sold |
Last verified against official sources (Skatteetaten, Brønnøysundregistrene): June 2026.
When should you switch from ENK to AS?
When profit stabilises above 800,000 – 1,000,000 kr
The ~800,000–1,000,000 kr rule of thumb is not about pure tax in the year you take everything out — there ENK is often just as good (see the calculator below) — but about when AS's other advantages (retained profit, limited liability, pension, sale) outweigh the extra work.
When you take significant risk
If the business involves contracts with substantial potential liability, or you take out loans in the business name, an AS limits personal liability.
When you plan to hire employees
AS is the natural structure for having employees. ENK can technically have employees, but the administration and personal liability make it impractical.
When you want to sell the business later
An AS can be sold as a unit (shares). An ENK can only be sold as a transfer of assets and contracts, and ceases at change of ownership.
When you want to build pension professionally
AS provides access to OTP (Mandatory Occupational Pension) and contribution-based pension, which are favourable structures. ENK must save for pension separately.
When the business has multiple owners
AS is designed for multiple owners with share classes, voting rights and profit sharing. ENK can only have one owner.
ENK vs AS — tax if you take all the profit out this year
Enter your figures. The calculator shows what you keep after tax and national insurance if all profit is extracted within the year.
Optional. Salary entitles you to holiday pay, OTP and sick pay, but incurs employee and employer national insurance. The remainder is usually taken as dividend.
Sole proprietorship (ENK)
–
Limited company (AS)
–
How we calculate (2026 income year)
Model: We assume all profit is extracted within the year. For the AS we assume you take an annual salary L (optionally 0) and the rest as dividend. Employer's NI on salary is deducted from profit before corporate tax.
ENK: Tax and national insurance are calculated via the shared function beregnSkatt() (personal deduction, bracket tax, NI 10.8 %).
AS: Employer's NI zone I 14.1 % (Lovdata STV 2025-12-18-2748) on salary. Corporate tax 22 % on profit after salary + employer's NI (Skatteetaten general income 2026). Dividend tax is 37.84 % (Skatteetaten adjustment factor 1.72 × 22 %). Salary is taxed with employee NI 7.6 % (employee, 17–69) + bracket tax + standard deduction 46 % (max 95 700 NOK) + general income 22 % on the remainder.
What this calculator doesn't account for
- Retained profit / deferred tax: the AS's main tax advantage is leaving profit in the company and paying only 22% corporate tax now, instead of ~51% on withdrawal. This calculator only models immediate extraction.
- tax-free allowance on dividends (skjermingsfradrag): long-term ownership can reduce effective dividend tax; not included here.
- Accountant/auditor: AS normally has higher admin costs (10,000–30,000 NOK/year).
- Pension: OTP and company pension schemes are often more beneficial than private saving in an ENK; not fully modelled.
- Limited liability: AS separates personal wealth from company debt; ENK has unlimited personal liability.
- Wealth tax and business sale: share sales are taxed differently from transfer of ENK assets.
- Employer's NI zones: we use zone I rate (14.1%); zones II–V have lower rates. Check Skatteetaten for your zone.
Neste steg
Let profit sit and reinvest — what does it mean?
This is an illustration, not a definitive answer.
It shows one thing: if you do not need all the profit privately, an AS can let you reinvest more of the money — because you defer part of the tax.
- In an ENK, you pay tax on the profit immediately. Only what is left after tax can be reinvested.
- In an AS, the company pays 22% corporate tax now. The rest — around 78% — stays and can be reinvested.
- You therefore keep working with a larger sum in an AS. With returns over several years, the gap grows.
- But this is DEFERRED tax, not saved tax. If you take the money out of the company, dividend tax (37.84%) applies on top. The advantage only comes if you actually let the money keep working.
The part of the profit you do NOT need privately.
Sole proprietorship (ENK)
–
Limited company (AS) — invested in company
–
What is smart to reinvest in — and what to avoid
✅ Do this:
- Things the business actually needs — equipment, tools, software, training, staff. Important: this also gives deductions in an ENK. You do not need an AS to buy deductible equipment.
- Let profit you do not need privately sit and grow — this is where the AS advantage actually lies.
⚠️ Be careful:
- Car through the company — if you use it privately too, it triggers benefit taxation and is often more expensive than people think. Read more about company cars.
❌ Avoid:
- Buying things you do not need just to save tax — you lose 100% of the money to save ~50% in tax. That is a loss, not a saving.
- Thinking money in the company is tax-free — it is deferred tax. The tax waits until you take it out.
How we calculate (2026 income year)
Model: We look at a lump sum reinvested over N years at a fixed annual return.
ENK: You pay personal marginal tax on amount R immediately (via beregnSkatt()). The remainder is personal capital that grows with returns. On withdrawal after N years, gains are assumed taxed at general income 22% (Skatteetaten general income 2026).
AS: The company pays 22% corporate tax on R immediately (Skatteetaten general income 2026). The rest stays in the company and grows. If you later withdraw as dividend, dividend tax 37.84% applies (Skatteetaten adjustment factor 1.72 × 22%).
What this calculator doesn't account for
- Share investments in the company can be taxed lower than 22% via the exemption method — we use a conservative flat 22% rate on gains.
- The calculation covers a lump sum, not annual reinvestment.
- Shareholder shield on withdrawal; accountant/auditor costs in AS; that you can withdraw gradually; that returns are not guaranteed.
Neste steg
When should you keep ENK?
- ✓You operate at a small scale with stable income under 800,000 kr.
- ✓The risk in your business is low.
- ✓You value simplicity — minimal administration, no auditor, low cost.
- ✓You run the business as a side activity alongside a regular job.
- ✓You plan to wind down or reduce the business within 2–3 years.
How to switch from ENK to AS
- 1
Establish a new AS
Register the AS at the Register of Business Enterprises and contribute at least 30,000 kr in share capital. Use Altinn or a lawyer/accountant.
- 2
Transfer assets to the AS
Sell or transfer equipment, inventory, contracts and intellectual property from ENK to AS. Remember to assess market value.
- 3
Inform customers and suppliers
Send notice that the AS takes over invoicing from a specific date. Update contracts, invoice templates and payment information.
- 4
Close the ENK
Delete the ENK at the Register of Business Enterprises once outstanding matters are settled. File final settlement and last tax return.
- 5
Run the AS as usual
Set up salary for yourself, OTP, accounting and reporting. Consider hiring an accountant to handle the formalities.
Frequently asked questions about ENK vs AS
When does it pay to switch from ENK to AS?+
The rule of thumb is profit over 800,000 – 1,000,000 kr per year. Then the combination of 22% corporate tax + dividend tax is often more favourable than personal tax — but the exact tipping point depends on whether you take all the profit out the same year, leave it in the company, or have other needs (liability, pension, sale).
What are the disadvantages of an AS?+
Higher administrative costs (10,000–30,000 kr/year), share capital requirement (30,000 kr), stricter accounting obligations, more formal processes, and double taxation if you take all profit as dividends.
Can I have both ENK and AS at the same time?+
Yes, it is fully possible. Many run an AS for the main business and an ENK for other activities (e.g. rentals, smaller consulting jobs). Keep finances clearly separated.
How much share capital do I need?+
Minimum 30,000 kr. You can increase later, but 30,000 kr is the requirement at incorporation. The share capital serves as working capital in the company.
Do I need an auditor for an AS?+
Not automatically. A small AS can opt out of audit (revisor fravalg) if all three conditions are met: annual turnover under 7 million kr, balance sheet under 27 million kr, and no more than 10 full-time equivalents (årsverk). Most small ASes meet all three and opt out.
How do I withdraw money from an AS?+
Three main ways: 1) Salary as employee (gives holiday pay, OTP, sick pay, but with social security and employer social security). 2) Dividends (22% corporate tax + 37.84% dividend tax). 3) Repayment of share capital (tax-free up to contribution).
What is the social security contribution in an AS?+
As an employee of your own AS, you pay 7.6% social security on your salary in 2026, and the AS pays employer social security contribution (arbeidsgiveravgift) on the same salary — the standard rate is 14.1%, but it varies between 0% and 14.1% depending on the geographic zone where the business is located. In an ENK, you personally pay 10.8% social security on personal income (personinntekt), and there is no employer contribution. The total tax and contribution burden therefore depends on how you withdraw the money — as salary, dividends or a combination.
What happens to my ENK if I start an AS?+
You can choose to close the ENK by deleting it at the Register of Business Enterprises. Assets (equipment, clients, contracts) can be transferred to the AS. Remember to settle tax and VAT before deletion.
Related calculators and guides
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