On 12 March 2025, the EFTA Surveillance Authority (ESA) approved extensions to the option scheme for start-up companies, and the Ministry of Finance amended the regulations on 13 March 2025 to implement these changes. The extensions mean that more companies can now benefit from the favourable tax scheme.
The most important changes are:
These changes came into effect for options granted from 13 March 2025. Other terms of the scheme, including requirements for the company's operating revenues and requirements for employees, will continue unchanged. For example, the company's total operating revenues in the income year before grant must not exceed NOK 80 million.
An important – and sometimes overlooked – point in the regulations is that options under the scheme can only be granted to people who are employed for at least 25 hours per week . This means that pure board members, without an employment relationship, are not included. Companies must have control over this to ensure that the grant falls under the tax-favorable scheme.
In addition, there is a cap on ownership: the employee cannot own more than 5% of the shares in the company at the time of grant – either directly or indirectly via a holding company or related parties. The employee must own the option personally , not via a holding company or other legal entities.
Remember that the granting of such options must be reported to the tax authorities by February 1st following the year of grant!
What does the option scheme entail?
The Start-up Stock Option Scheme is a tax incentive scheme that allows such companies to grant employees stock options with favorable tax terms. This is particularly useful for start-up and growth companies that want to attract and retain key personnel by offering them a share in the company's future success.
In this special scheme, no tax is triggered on the grant or exercise of the option. Tax is only imposed upon the realization (sale) of the shares, and then as capital income, not as wage income. This means a much lower effective tax rate – in 2025 it is 37.84%, including upward adjustment according to the shareholder model. This is in contrast to regular options, where the benefit is taxed as salary upon exercise (marginal tax up to 47.4% + employer's social security contributions).
The stock option scheme is a targeted tool to help entrepreneurs build strong teams. It rewards patience and effort over time, and it makes it possible for more people to get a share of the value creation without triggering taxes until there is actually a profit.
Companies still have to do their homework: written agreements, good documentation and an understanding of the regulations are required. But for those who do it right, this is a powerful incentive in Norwegian business policy.
