What is Enkeltpersonforetak — ENK (Sole Trader)?
Norwegian sole trader structure (Enkeltpersonforetak). No separate legal entity — business income is personal income. Must register with Enhetsregisteret if turnover exceeds NOK 50,000. All profit taxed as personal income including trinnskatt (up to 17.6%) and trygdeavgift (11% for self-employed). No minimum capital required.
Current Rate (Inntektsår 2025)
Personal income tax rates apply: 22% + trinnskatt up to 17.6% + 11% trygdeavgift on self-employment income
Example
Kari runs a design business as an ENK with NOK 400,000 net profit. She pays 22% ordinary income tax + trinnskatt (1.7% on NOK 400,000 minus lower threshold) + 11% trygdeavgift on ENK income — total effective rate approximately 36–40%. No separate company tax return needed.
How Enkeltpersonforetak — ENK (Sole Trader) works in Norway
An Enkeltpersonforetak (ENK) is the Norwegian equivalent of a sole trader or sole proprietorship. It is the simplest and most common way for an individual to start a business in Norway, with no minimum capital, no registration fee, and minimal ongoing compliance — but also no liability protection.
**No separate legal entity**
The ENK is not a separate legal person. The owner and the business are legally the same. This means: - The owner is personally liable for all business debts with no limitation - Business income is inseparable from personal income for tax purposes - There is no corporate tax; all net profit is included in the owner's personal income
**Registration**
An ENK must register in the Enhetsregisteret (via Altinn or brreg.no) when it has taxable turnover exceeding NOK 50,000 per year. Registration is free for ENKs (unlike the NOK 5,100 fee for an AS). The ENK gets an Organisasjonsnummer, which must appear on invoices above NOK 50,000 and on MVA registrations.
Businesses with employees must also register in the Arbeidsgiverregisteret (employer register) regardless of turnover level.
**Tax treatment — three layers**
ENK profit is included in the owner's personinntekt (personal income) and faces all three personal tax layers: 1. **Alminnelig inntekt**: 22% on net profit after business deductions 2. **Trinnskatt**: bracket tax on gross income (1.7%–17.6% depending on income level) 3. **Trygdeavgift**: 11% for self-employed people on ENK income (higher than the 7.9% rate for employees, reflecting that self-employed pay both the employee and employer national insurance portions)
The combined effective marginal rate for a high-earning ENK owner can approach 50%.
**When to use an ENK vs AS**
ENK advantages: - Zero formation cost and complexity - No minimum capital - Simpler bookkeeping (can use the simplified ENK tax rules for very small businesses) - No obligation to have a separate company bank account (though recommended)
ENK disadvantages: - Unlimited personal liability - No ability to retain profits at the lower 22% corporate rate — all profit taxed as personal income immediately - No Fritaksmetoden or Aksjonærmodellen benefits - Self-employment trygdeavgift at 11% vs 7.9% for employees
The typical profit level at which an AS becomes more tax-efficient than an ENK is approximately NOK 500,000–700,000 per year, when the ability to retain profits at 22% corporate rate (rather than paying trinnskatt immediately) outweighs the AS formation and maintenance costs.
Related terms
Norwegian private limited company. The most common business structure for active trading. Minimum share capital NOK 30,000. Registered with Brønnøysundregistrene (BRREG). Shareholders have limited liability — personal assets are protected.
Norwegian personal income tax system. Flat 22% ordinary income tax on net income, plus trinnskatt (bracket tax) on gross income up to 17.6%, plus 7.9% trygdeavgift (national insurance) on earned income. Total marginal rate on highest earners can exceed 47%.
Norway's central business register authority, based in Brønnøysund. Manages the Foretaksregisteret (Company Register) and Enhetsregisteret (Entity Register). All AS companies must register here. Issues the 9-digit Organisasjonsnummer on registration.
Norway's national tax authority. Manages all Norwegian taxes including personal income tax, corporate tax, MVA (VAT), wealth tax, and inheritance tax. Digital services via skatteetaten.no. Business filings use Altinn.no portal.
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