Norway

Executive Summary

Norway is a modern, highly developed country with a small but very strong economy. Per capita GDP is among the highest in the world, boosted by decades of success in the oil and gas sector and other world-class industries like shipping, shipbuilding, and aquaculture. The major industries are supported by a strong and growing professional services industry (finance, ICT, legal), and there are emerging opportunities in fintech, cleantech, medtech, and biotechnology. Strong collaboration between industry and research institutions attracts international R&D activity and funding. Norway is a safe and straightforward place to do business, ranked 9 out of 190 countries in the World Bank’s 2020 Doing Business Report, and fourth out of 180 on Transparency International’s 2021 Corruption Perceptions Index. Norway is politically stable, with strong property rights protection and an effective legal system. Productivity is significantly higher than the EU average.

Norway has managed the coronavirus pandemic with relative success two years in, maintaining a low death rate, protecting health facilities’ capacity, and cushioning economic shocks. Swift implementation of social mobility restrictions, strong political unity, and broad public support were among the country’s key success factors. Norway’s solid financial footing, including fiscal reserves in its trillion-dollar sovereign wealth fund and monetary policy maneuverability, enabled the government to finance generous support packages to mitigate the pandemic’s economic impact on workers and businesses.

Norwegian lawmakers and businesses welcome foreign investment as a matter of policy and the government generally grants national treatment to foreign investors. Some restrictions exist on foreign ownership and use of natural resources and infrastructure. The government remains a major owner in the Norwegian economy and retains monopolies on a few activities, such as the retail sale of alcohol.

While not a member of the European Union (EU), Norway is a member of the European Economic Area (EEA, which also includes Iceland and Liechtenstein) with access to the EU single market’s movement of persons, goods, services, and capital. The Norwegian government continues to liberalize its foreign investment legislation with the aim of conforming more closely to EU standards and has cut bureaucratic regulations over the last decade to make investment easier. Foreign direct investment in Norway stood at USD 160 billion at the end of 2021 and has more than doubled over the last decade. There are approximately 8,100 foreign-owned companies in Norway, and over 700 U.S. companies have a presence in the country, employing more than 58,000 people.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2021 4 of 180 http://www.transparency.org/research/cpi/overview 
Global Innovation Index 2021 20 of 132 https://www.globalinnovationindex.org/analysis-indicator 
U.S. FDI in partner country ($M USD, historical stock positions) 2020 USD 21.5 billion https://apps.bea.gov/international/factsheet/ 
World Bank GNI per capita 2020 USD 78,290 http://data.worldbank.org/indicator/NY.GNP.PCAP.CD 

1. Openness To, and Restrictions Upon, Foreign Investment

Norwegian lawmakers and businesses welcome foreign investment as a matter of policy and the government generally grants national treatment to foreign investors. The Government established “Invest in Norway,” an official investment promotion agency, to help attract and assist foreign investors, including in the key offshore energy sector and in less developed regions such as northern Norway.

While not a member of the European Union, Norway is an EEA signatory and continues to liberalize its foreign investment legislation to conform more closely to EU standards. Current laws, rules, and practices follow below.

Norway’s investment policies vis-á-vis third countries, including the United States, will likely continue to be governed by reciprocity principles and by bilateral and international agreements. The European Economic Area (EEA) free trade accord, which came into force for Norway in 1995, requires the country to apply principles of national treatment to EU members and the other EEA members – Iceland and Liechtenstein – in certain areas where foreign investment was prohibited or restricted in the past. Norway’s investment regime is generally based on the national treatment principle, but ownership restrictions exist on some natural resources and on some activities (fishing/ maritime/ road transport). State ownership in companies can be used as a means of ensuring Norwegian ownership and domicile for these firms.

The Organization for Economic Cooperation and Development (OECD) conducted an Economic Survey for Norway in 2022: https://www.oecd-ilibrary.org/economics/oecd-economic-surveys-norway-2022_df7b87ab-en 

The OECD also conducted a Peer Review of Norway in 2019: https://www.oecd.org/dac/oecd-development-co-operation-peer-reviews-norway-2019-75084277-en.htm 

The World Trade Organization (WTO) conducted a Trade Policy Review for Norway in 2018: https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/TPR/S373.pdf

Altinn.no is a web portal that serves as a one-stop shop for establishing a company and contains the necessary forms; it also provides an electronic platform for dialogue between the business/industry sector, citizens and other stakeholders, and government agencies. The business registration processes are straight-forward, complete, and open to foreign companies. Please note, however, that registration of Norwegian Registered Foreign Business Enterprises (NUF) cannot be done electronically. A guide for establishing a business is available at the following address: https://www.altinn.no/en/start-and-run-business/ 

The government does not directly incentivize outward investment. However, the Government of Norway (GON) acknowledges that for Norwegian companies to be successful, they need to grow in markets and economies that are larger than Norway, so the trade and investment promotion agency Innovation Norway has offices in key foreign markets, including four offices in the United States, in Houston, New York City, San Francisco and Washington D.C.. Norway’s Government Pension Fund Global, the largest sovereign wealth fund in the world, owns 1.4 percent of all listed companies in the world.

3. Legal Regime

The transparency of Norway’s regulatory system is generally on par with that of the EU. Norway is obliged to adopt EU directives under the terms of the EEA accord in the areas of social policy, consumer protection, environment, company law, and statistics.

The Norwegian Accounting Act requires, in line with EU Directive 2014/95/EU, Norwegian public companies and other large companies to publish annual reports on environmental, social, and governance (ESG) factors. In addition, ESG implementation is receiving increasing public attention and support, and companies with strong ESG profiles may experience a competitive advantage.

All draft bills are made available for comment through a public consultation process. The Norwegian parliament, the Storting, exercises legislative power in Norway and must approve all formal laws (acts, directives, and regulations). Draft bills are available at: https://www.regjeringen.no/en/find-document/consultations/id1763/  Norwegian laws and regulations are available at: https://lovdata.no/info/information_in_english 

Norway’s public finances and debt obligations are transparent. The Government publishes the National Budget and revised budget on the website http://www.statsbudsjettet.no  and an annual White Paper to Parliament on the State’s account: https://www.regjeringen.no/no/tema/okonomi-og-budsjett/statlig-okonomistyring/statsregnskapet/id438868 .

The Ministry of Finance has a webpage on Government debt: https://www.regjeringen.no/en/topics/the-economy/economic-policy/the-central-governments-outstanding-debt/id443404/ 

Norway is a member of the European Economic Area (EEA) and as such implements applicable EU directives under the terms of the agreement.

Norway is a member of the World Trade Organization (WTO) and notifies draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT).

The Norwegian legal system is similar to that of other Nordic countries but does not consist of a single comprehensive civil code. Norwegian law is based on the principle of freedom of contract, subject only to limited restrictions. Contracts, whether oral or written, are generally binding on the parties.

Norway welcomes foreign investment as a matter of policy and generally grants national treatment to foreign investors. Ownership restrictions exist on some natural resources and on some activities (fishing/maritime road transport).

A new National Security Act entered into force January 1, 2019, and provides the legal foundation for enhanced government screening of foreign investments based on national security concerns. Norway’s legal system is robust and trusted.

Current legislation governing competition went into effect in 2004 and is enforced by the Norwegian Competition Authority (NCA). Under the authority of the Ministry of Trade, Industry and Fisheries the NCA is authorized to conduct non-criminal proceedings and impose fines, or “infringement fees,” for anti-competitive behavior. The size of the fees may vary according to a number of factors, including company turnover and severity of the offense. The 2004 legislation also empowers the NCA to halt mergers or acquisitions that threaten to significantly weaken competition. Companies planning such transactions are generally obliged by law to report their plans to the NCA, which may conduct a review. However, if the combined annual turnover in Norway does not exceed NOK 1 billion (USD 113 million) or the annual turnover of one of the companies is less than NOK 100 million (USD 11.3. million), notification is not required.

There have been no cases of questionable expropriation in recent memory. Government takings of property are generally limited to non-discriminatory land and property condemnation for public purposes (road construction, etc.). The Embassy is not aware of any cases in which compensation has not been prompt, adequate, and effective.

Norway has strong bankruptcy laws and is ranked 5 out of 190 for ease of “resolving insolvency” on the World Bank’s 2020 Doing Business report. According to the World Bank, the average duration for bankruptcy proceedings in Norway is half that of the OECD, at just under a year. A new temporary Restructuring Act entered into force on May 11, 2020, making the judicial restructuring process applicable to companies in financial difficulties. The Act, which was adopted in response to the economic consequences of the global Covid-19 pandemic, replaces the National Bankruptcy Act until 1 July 2023. The Storting hopes to enact permanent legislation based on the experience gained from this interim period.

4. Industrial Policies

Norway’s SkatteFUNN research and development (R&D) tax incentive scheme is a government program designed to stimulate R&D in Norwegian trade and industry. Businesses and enterprises that are subject to taxation in Norway are eligible to apply for tax relief.

For more information, see: https://www.oecd.org/sti/RDTax%20Country%20Profiles%20-%20NOR.pdf

Norway has no foreign trade zones and does not contemplate establishing any.

Norway generally does not impose performance requirements on foreign investors, nor offer significant general tax incentives for either domestic or foreign investors. There is an exception, however, for investments in sparsely settled northern Norway where reduced payroll taxes and other incentives apply. There are no free-trade zones, although taxes are minimal on Svalbard, a remote Arctic archipelago which is subject to special treaty provisions but administered by Norway. A state industry and regional development fund provides support (e.g., investment grants and financial assistance) for industrial development in areas with special employment difficulties or with low levels of economic activity.

Norway does not require “forced localization” nor imposes requirements on data storage.

5. Protection of Property Rights

Norway recognizes secured interests in property, both movable and real. The system for recording interests in property is recognized and reliable. Norway maintains an open and effective legal and judicial system that protects and facilitates acquisition and disposition of rights in property, including land, buildings, and mortgages.

Norway adheres to key international agreements for the protection of intellectual property rights (IPR) (e.g., the Paris Union Convention for the Protection of Industrial Property, the Berne Copyright Convention, the Universal Copyright Convention of 1952, and the Rome Convention). It has notified its main IPR laws to the World Trade Organization (WTO). Norway’s IPR statutes cover the major areas referred to in the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

The chief domestic statutes governing IPR include: the Patents Act of December 15, 1967, as amended; the Designs Act of March 14, 2003; the Copyrights Act of May 12, 1961, as amended; the Layout-design Act of June 15, 1990, as amended; the Marketing Act of January 9, 2009; and the Trademarks Act of March 26, 2010. The above legislation also protects trade secrets and industrial designs, including semiconductor chip layout design. As a European Economic

Area (EEA) member, Norway adopted legislation intended to implement the 2001 EU Copyright Directive, though subsequent court cases exposed shortcomings in the legislation (see below).

6. Financial Sector

Norway has a highly computerized banking system that provides a full range of banking services, including internet banking. There are no significant impediments to the free market-determined flow of financial resources.

Foreign and domestic investors have access to a wide variety of credit instruments. The financial regulatory system is transparent and consistent with international norms. The Oslo Stock Exchange, which was acquired by Europe’s largest stock exchange Euronext in 2019, facilitates portfolio investment and securities transactions in general.

Norwegian banks are generally considered to be on a sound financial footing, and the banking sector holds around USD 530 billion in assets. Conservative asset/liquidity requirements limited the exposure of banks to the global financial crisis in 2008-2009. The Ministry of Finance reduced the requirement for banks’ countercyclical capital buffer from 2.5 percent to 1 percent in March 2020 as part of the government’s economic response to COVID-19. Norges Bank’s (Norway’s Central Bank) Monetary Policy and Financial Stability Committee has advised the Ministry of Finance to raise the countercyclical capital buffer requirement to 1.5 percent, effective from June 30, 2022.

The Ministry of Finance increased the systemic risk buffer requirement for banks from 3 percent to 4.5 percent from year-end 2020. Foreign banks have been permitted to establish branches in Norway since 1996.

Norway’s sovereign wealth fund, the Government Pension Fund Global (GPFG), was established in 1990 and was valued at NOK 11.673 trillion (USD 1.356 trillion) at year-end 2021. The management mandate requires the fund to be invested widely, outside Norway. Petroleum revenues are invested in global stocks and bonds, and the current portfolio includes over 9,100 companies and approximately 1.4 percent of global stocks. The fund is invested across four asset classes. The fund aims to invest in most markets, countries, and currencies to achieve broad exposure to global economic growth. 41.6 percent of the fund’s investments in 2021 were in the United States, which is its single largest market. The fund plays an active role in its investments and aims to vote in almost all general shareholder meetings.

In 2004, Norway adopted ethical guidelines for GPFG investments that prohibit investment in companies engaged in various forms of weapons production, environmental degradation, tobacco production, human rights violations, and what it terms “other particularly serious violations of fundamental ethical norms.” In March 2019 the GON announced that companies classified by index provider FTSE Russell as being in the subsector “0533 Exploration & Production” in the sector “0001 Oil & Gas” no longer would be part of the GPFG portfolio. Current holdings in these companies will be phased out over time. More broadly focused energy companies, which have investments in renewable and sustainable energy sources as well as oil & gas divisions, may still be included. The fund currently has over 174 companies on its exclusion and observation list, at least 45 of which are U.S. companies. The ethical guidelines also highlight seven focus areas in term of sustainability: children’s rights, climate change, water management, human rights, tax and transparency, anti-corruption, and ocean sustainability. The fund adheres to the Santiago Principles and is a member of the IMF-hosted International Working Group on Sovereign Wealth Funds.

7. State-Owned Enterprises

The government continues to play a strong role in the Norwegian economy through its ownership or control of many of the country’s leading commercial firms. The public sector accounts for nearly 66 percent of GDP. The Norwegian government is the largest owner in Norway, with ownership stakes in a range of key sectors (e.g., energy, transportation, finance, and communications). 74 State-Owned Enterprises (SOEs) are managed directly by the relevant government ministries, and approximately 33 percent of the stock exchange’s capitalization is in government hands. State ownership in companies can be used as a means of ensuring Norwegian ownership and domicile for these firms.

Norway is party to the Government Procurement Agreement (GPA) within the framework of the World Trade Organization (WTO) and a signatory to all relevant annexes. SOEs are thus covered under the agreement.

Successive Norwegian governments have sustained stable levels of strong, transparent, and predictable government ownership. The former center-right government took limited steps to reduce ownership stakes.

The GON publishes the annual state ownership report, available in English here: https://www.regjeringen.no/en/topics/business-and-industry/state-ownership/statlig-eierskap-publikasjoner/id737457/  and a white paper on state ownership in companies available here: https://www.regjeringen.no/no/dokumenter/meld.-st.-8-20192020/id2678758 .

Norway has no current plans to privatize any SOEs.

8. Responsible Business Conduct

Corporate Social Responsibility (CSR) is very much part of Norwegian corporate and political consciousness. Significant attention has been given to ethical and sustainable business practices over the last several years; the GON has issued a series of white papers, most recently in 2015, on promoting human rights through foreign policy and foreign development assistance. In 2009, a white paper laid out responsibility of Norwegian businesses in the global economy and in 2006-2007, the GON set down guidelines for ethical and responsible conduct in state-owned enterprises, and incorporated climate policy, procurement policy, and development policy as parts of the GON’s broader CSR vision.

As an OECD member, Norway adheres to the OECD Guidelines for Multinational Enterprises. Norway’s National Contact Point (NCP) for the OECD Guidelines raises awareness of the due diligence approach of the Guidelines and handles complaints against Norwegian businesses with international operations, in the event they are not behaving in accordance with the Guidelines. The NCP facilitates resolution of these complaints through dialogue and mediation. Kompakt is the Government’s consultative body on matters relating to CSR: https://www.regjeringen.no/en/topics/foreign-affairs/business-cooperation-abroad/innsikt/kompakt_en/id633619/ 

The Norwegian Accounting Act requires companies listed on the Oslo Stock Exchange to provide a report on their policies and practices for corporate governance. The Norwegian Corporate Governance Board, composed of nine independent organizations, issues and updates the Norwegian Code of Practice for the above-mentioned companies. Transparency and disclosure are key to the development of corporate social responsibility. Large enterprises are required under Section 3-3c of the Accounting Act to report on their CSR activities. Public disclosure requirements are increasingly regulated. The work of the EU in this area may lead to the development of regulations of relevance to Norway.

In the mining sector, Norway encourages adherence to the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Afflicted and High-Risk Areas and participates in the Extractive Industries Transparency Initiative (EITI).

In order to prevent tax evasion and the use of tax havens to conceal financial information, large enterprises and public-interest entities that are active in the extractive industry or in the logging of primary forests are required to report on a country-by-country basis. In addition, Norway has entered into a number of new bilateral tax information exchange agreements in recent years.

Norway is a signatory of The Montreux Document on Private Military and Security Companies, a supporter of the International Code of Conduct or Private Security Service Providers, and a participant in the International Code of Conduct for Private Security Service Providers’ Association (ICoCA).

Department of State

Department of the Treasury

Department of Labor

In 2021, Norway ranked 11th out of 34 countries in the Information Technology and Innovation Foundation’s (ITIF) Global Energy Innovation Index (GEII)  which provides a multifaceted assessment of national contributions to the global clean energy innovation system. Norway aims to reduce greenhouse gas emissions by 50 to 55 percent by 2030, and to become a low-emission country by 2050. To promote the implementation of Norway’s climate targets, the Climate Change Act was implemented in 2017 ( https://lovdata.no/dokument/NL/lov/2017-06-16-60 ).

The government implemented several initiatives to achieve its climate targets, some of which provide financial incentives to invest in green technologies:

  • Norfund (Norway’s development finance organization):
  • Enova:
  • Innovation Norway:
  • Nysnø Invest:

Norwegian laws, regulations, and white papers on climate and environment can be accessed at: https://www.regjeringen.no/en/find-document/id2000006/?topic=925 

9. Corruption

Business is generally conducted “above the table” in Norway, and Norway ranks fourth out of 180 countries on Transparency International’s 2021 Corruption Perceptions Index.  Corrupt activity by Norwegian or foreign officials is a criminal offense under Norway’s Penal Code. Norway’s anti-corruption laws cover illicit activities overseas, subjecting Norwegian nationals/companies who bribe officials in foreign countries to criminal penalties in Norwegian courts. In 2008, the Ministry of Foreign Affairs launched an anti-corruption initiative, focused on limiting corruption in international development efforts.

Norway is a member of the Council of Europe’s anti-corruption watchdog Group of States against Corruption (GRECO) and ratified the Criminal Law Convention on Corruption in 2004, without any reservations. Norway has ratified the UN Anticorruption Convention (2006) and is a signatory of the OECD Convention on Combating Bribery.

The Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (ØKOKRIM)
(Mailing) Address: Postboks 2096 Vika, 0125 Oslo
Telephone: +47 23 29 10 00
Email: post.okokrim@politiet.no

Contact at “watchdog” organization:

Guro Slettemark (Secretary General)
Transparency International Norge
Address: Kristian Augusts gate 14, 0164 Oslo
Telephone: +47 908 74 626
E-mail: slettemark@transparency.no

10. Political and Security Environment

Norway is a vibrant, stable democracy. Violent political protests or incidents are extremely rare, as are politically motivated attacks on foreign commercial projects or property. However, on July 22, 2011, a Norwegian individual motivated by extreme anti-Islam ideology carried out twin attacks on Oslo’s government district and on the Labor Party’s youth summer camp in Utøya, killing 77 people. The individual, now in prison, operated alone and this incident is not generally considered an indicator of increased political violence in the future.

11. Labor Policies and Practices

Obtaining work permits for foreign labor, particularly for semi-skilled workers, can be cumbersome.

Skilled and semi-skilled labor is usually available in Norway. The labor force as of year-end 2021 totaled about 2.917 million persons, representing 72.3 percent of the working-age population. 2.817 million persons were employed at year end 2021 (72.3% of male labor force and 67.3% of female labor force), with unemployment at 3.4 percent.

Union membership is in excess of 1.94 million persons, 68 percent of the labor force. The unions are independent of the government but some, such as the largest (LO), have close and historic ties with the Labor Party. Norway has a highly centralized and constructive system of collective bargaining. The government may impose mandatory wage mediation should strikes threaten key sectors of the economy, particularly the oil and gas and transportation sectors. Mandatory wage mediation has been used 120 times since 1953, most recently in 2021 to end a strike among municipality workers ranging from nurses and teachers to janitors.

Employee benefits are generous, e.g., one year paid parental leave (shared between parents, and financed chiefly by the government), and unemployment benefits for up to 104 weeks. There are special provisions for layoffs linked to lower activity for the employer.

The average number of hours worked per week in one’s primary job, 33.6 in 2020, is the third lowest in the OECD, after the Netherlands and Denmark. Productivity, however, is high – significantly higher than the EU average. Sickness and absenteeism rates have been between 6-8 percent over the last decade and stood at 6.1 percent at the end of 2020. Relatively high disability rates, especially among young people, are a concern.

Norwegian blue-collar hourly earnings are comparatively high. High wages encourage the use of relatively capital-intensive technologies in Norwegian industry. Top-level executives and highly skilled engineers, on the other hand, are generally paid considerably less than their U.S. counterparts, which, when combined with relatively high wages at the bottom of the wage scale, contributes to Norway’s very high level of income equality relative to other OECD countries.

14. Contact for More Information

Stephen SCHLIEMAN
Economic Officer
Embassy of the United States of America
Morgedalsvegen 36
0378 Oslo
Norway
+47 2130 8665
oslopolecon@state.gov

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