Doing Business in Norway 2012 - Lex Mundi -

Doing Business in Norway 2012

Table of Contents THE COUNTRY AT A GLANCE ................................................................................................. 5 Languages. Exchange rates ............................................................................................ 5 Geography. Climate ...................................................................................................... 5 Cultural influences or prohibitions on the way business is conducted .................................... 6 Religious influences on the way business is conducted........................................................ 6 Infrastructure............................................................................................................... 6 GENERAL CONSIDERATIONS ................................................................................................. 7 Investment policies ....................................................................................................... 7 Diplomatic relations ...................................................................................................... 7 Government ................................................................................................................. 7 Environmental considerations ......................................................................................... 8 Intellectual property ...................................................................................................... 8 INVESTMENT INCENTIVES .................................................................................................... 9 Export incentives and guarantees .................................................................................... 9 Grants, subsidies and funds to foreign investors ................................................................ 9 National tax incentives for foreign investors ..................................................................... 10 Regional tax incentives open to foreign investors.............................................................. 10 FINANCIAL FACILITIES ....................................................................................................... 10 Banking and financial facilities ....................................................................................... 10 EXCHANGE CONTROLS ........................................................................................................ 11 Business transactions with nationals, residents or non-residents ......................................... 11 Investment controls ..................................................................................................... 11 Money transfer ............................................................................................................ 12 IMPORT/EXPORT REGULATIONS ........................................................................................... 12 Customs regulations..................................................................................................... 12 Exports ...................................................................................................................... 13 Foreign trade regulations .............................................................................................. 13 Imports ...................................................................................................................... 13 Manufacturing requirements .......................................................................................... 14 Product labelling .......................................................................................................... 14 STRUCTURES FOR DOING BUSINESS .................................................................................... 14 General ...................................................................................................................... 14 Limited liability companies ............................................................................................ 14 Partnerships etc .......................................................................................................... 16 European company ...................................................................................................... 16 Branches and representative offices ............................................................................... 16 REQUIREMENTS FOR THE ESTABLISHMENT OF A BUSINESS ..................................................... 16 Alien business law........................................................................................................ 16 Antitrust law ............................................................................................................... 16 Environmental regulations............................................................................................. 17 Government approvals ................................................................................................. 17 Insurance ...................................................................................................................17 Licenses/permits ......................................................................................................... 17

Page 2

Table of Contents OPERATION OF THE BUSINESS ............................................................................................ 18 Advertising and marketing ............................................................................................ 18 Bookkeeping requirements ............................................................................................ 19 Business ethics and codes of conduct.............................................................................. 19 Consumer protection law .............................................................................................. 19 Construction ............................................................................................................... 20 Contracts.................................................................................................................... 20 Product Liability ................................................................................................ 20 Sale of Goods ................................................................................................... 20 CESSATION OR TERMINATION OF BUSINESS ......................................................................... 21 Termination ................................................................................................................ 21 Insolvency/bankruptcy ................................................................................................. 22 LABOUR LEGISLATION, RELATION AND SUPPLY ...................................................................... 23 Employer – employee relations ...................................................................................... 23 Employment regulations ............................................................................................... 24 Hiring and firing regulations .......................................................................................... 24 Labour availability........................................................................................................ 26 Work permits .............................................................................................................. 26 Safety standards ......................................................................................................... 28 Unions ...................................................................................................................... 29 TAX ON CORPORATIONS ..................................................................................................... 29 Tax residency .............................................................................................................. 29 Taxable income and rates ............................................................................................. 29 The exemption method ................................................................................................. 30 Special tax regimes ...................................................................................................... 31 Taxation of non-resident corporations ............................................................................. 31 TAX ON INDIVIDUALS ......................................................................................................... 31 Tax residency .............................................................................................................. 31 Taxable income and rates ............................................................................................. 32 Income from shares in limited liability companies and partnership shares ............................ 32 Taxation of non-resident individuals ............................................................................... 32 TAX ON OTHER LEGAL BODIES - PARTNERSHIPS .................................................................... 33 GENERAL TAX CONSIDERATIONS ......................................................................................... 34 Tax period .................................................................................................................. 34 Net wealth tax............................................................................................................. 34 Pay roll taxes .............................................................................................................. 34 Property tax ................................................................................................................ 34 Stamp duty................................................................................................................. 34 Inheritance and gift tax ................................................................................................ 34 Transfer pricing rules ................................................................................................... 34 Thin capitalisation ........................................................................................................ 35 CFC-legislation ............................................................................................................ 35 VAT

...................................................................................................................... 35

Tax treaties ................................................................................................................35

Page 3

Table of Contents IMMIGRATION REQUIREMENTS ............................................................................................ 35 Immigration controls .................................................................................................... 35 Immigration requirements and formalities ....................................................................... 35 Visa

...................................................................................................................... 36

EXPATRIATE EMPLOYEES ..................................................................................................... 36 Cost of living and immigration ....................................................................................... 36 Driving licences ........................................................................................................... 36 Education ................................................................................................................... 37 Housing...................................................................................................................... 37 Importing personal possessions ..................................................................................... 37 Medical care ................................................................................................................ 37 Moving costs ............................................................................................................... 37 Tax liability ................................................................................................................. 37 Work permits .............................................................................................................. 37

Page 4

The country at a glance Languages. Exchange rates Norwegian is spoken throughout the country. In addition to Norwegian, there are two official minority languages; Sami is spoken by the Sami population especially in regions in the northern part of Norway, and Kven is spoken in certain northern areas. Most Norwegians understand the other Scandinavian languages well (Danish and Swedish). The level of spoken and written English is in general high and is used extensively in business relations. Most of the larger businesses and law firms have employees who speak German, French and Spanish.

Norway is, with some exceptions regarding fish and agricultural products, fully integrated in the EU’s internal market and free travel area through the European Economical Area (EEA) and Schengen agreements. Norway is not, however, a member of the EU and consequently not a member of the EU’s economical and monetary union and its currency (euro).

The currency in Norway is krone (NOK). The NOK has in general been strengthened in relative terms over the last few years. As per January 2012, the exchange rate was around NOK 6.00 for one US dollar; NOK 7.70 for one euro and NOK 9.30 for one pound sterling.

Geography. Climate Norway is situated on the Scandinavian peninsula in north-west Europe bordering the North Sea in the southwest and the Skagerrak inlet to the south, the North Atlantic Ocean (Norwegian Sea) to the west and the Barents Sea to the northeast. Norway has land borders and close political cooperation and business and cultural relations with Sweden, Finland and Russia to the east and north. Norway also has strong cultural and economic ties with Denmark to the south, Iceland to the west and with Britain and Ireland to the southwest. Being an open trade oriented economy Norway furthermore has deep economical and cultural connections with the other parts of continental Europe, especially with Germany, France, the Baltic states, Poland and the Benelux countries.

Open borders between Norway and the EU and market access with respect to goods, services, capital, workers and the right of establishment is secured through the EEA and Schengen agreements linking Norway effectively to the EU’s internal market and free travel area.

The transatlantic ties with the USA is strong, i.a. due to substantial emigration from Norway to the US in the nineteenth century and in the early twentieth century, a longstanding strategic partnership through NATO and extensive business relations e.g. in the energy and shipping sectors.

Geographically Norway is characterized by one of the world’s longest and most rugged coastlines with deep fjords and indents and tens of thousands of small and large islands. Parts of the western and eastern main land hold fertile farming lands; the eastern part bordering Sweden has substantial wood belts. Both the coastal areas and the inland are to a large extent dominated by the Scandinavian mountain range; the coastal areas are typically more alpine in character than the large inland mountain massif.

The territorial sea (12 nmi beyond the baselines), and the exclusive economic zone—totalling 1,979,179 sq km making it the largest in Europe—hold rich fish stocks. A long lasting delineation

Page 5

discussion with Russia regarding the economic zone in the Barents Sea and part of the Arctic Ocean was solved in 2010. The accord was accepted by the Russian Duma and the Norwegian Storting in 2011 and was put into force 7 July 2011. The agreement caters for further exploration of the area’s resources. The expanding extraction from the late 1960’s of oil and gas resources from Norway’s continental shelf has led to a cutting edge off shore sector. Substantial oil and gas reserves have been identified in 2011 and 2012.

The archipelago Svalbard is part of the Norwegian territory and it consists of a cluster of mountainous arctic islands situated between the main land and the North Pole. Svalbard is a growing tourist destination and is also host to one Norwegian and one Russian mining company.

Research activities are constantly growing. The island Jan Mayen to the far northwest towards Greenland and the Bouvet Island in the South Atlantic Ocean are both part of the Norwegian territory. Peter I Island in the South Pacific Ocean is regarded as an external dependency.

Norway’s claim in Antarctica consists of Queen Maud Land which is a substantive sector stretching to the South Pole.

In spite of its high latitude the climate is fairly temperate with warm summers and relatively mild winters in the coastal areas. This is due to the North Atlantic current which raises the air temperature.

Cultural influences or prohibitions on the way business is conducted Norway is a typical Scandinavian country with high work and business ethics and a transparent business climate. There are no cultural prohibitions on the way business is conducted.

Religious influences on the way business is conducted In cultural-religious terms Norway can still be seen as a largely mono cultural protestant society, but there are quite substantial numbers of immigrants holding other religious beliefs. Religious influences on the way business is conducted are limited to the national holidays.

Infrastructure Norwegian infrastructure to some extent relies on its geography and climate. Mountains, valleys and fjords may consequently make inland transportation challenging, especially during winter.

Railroads are located mostly in the south connecting Oslo with the major cities (e.g. Bergen, Stavanger, Trondheim, Kristiansand) and leading to neighbouring Sweden. A high-speed and efficient service connects the international airport at Gardermoen with downtown Oslo and its surrounding region.

Air transport is extensively used and covers the whole country. All major cities have an international and modern airport in its proximity.

Shipping is an important part of the transportation system. All cities along the coast and on the fjords have securely built ports, e.g. Oslo, Drammen, Fredrikstad, Kristiansand, Stavanger, Ålesund, Trondheim, and Bergen. There are many ice-free ports on the coastline, also in the extreme north e.g. at Narvik, Vardø, Tromsø and Kirkenes. The west and northwest coasts form an important international shipping route for cargo and passengers from the Atlantic and into the Arctic Ocean and eastwards.

Page 6

Telecommunication: Norway’s telecommunications infrastructure is highly developed and completely digitised. The internet penetration is very high at 94.8 % of the population according to a 2010 ITU report. Fast internet connections are normal throughout the business community.

The rapid development of the telecommunications sector stems i.a. from the liberalisation from the nineties onwards of the telecom sector and thus the opening of the market to foreign competition.

Public services are in general highly developed. Water supply is abundant and is supplied by public authorities at low cost. The electricity sector is efficient and liberalised, and it forms part of the Nordic and European energy market (see below in Chapter 0 regarding public ownership in large companies). Gas and fuel is provided through national and international energy providers.

General considerations Investment policies With certain exceptions, Norway’s foreign investment regime is open and offers national treatment to foreign investors. According to the OECD, Norway’s score coincides with the overall average in the foreign direct investment (FDI) regulatory restrictiveness index, which measures the restrictiveness of OECD countries towards FDI in nine economic sectors.1 There is no single law governing foreign investment in Norway, the relevant legislation is found in a number of statutes (see further below in Chapters 0, 0 and 0). Norway maintains restrictions on foreign investment in certain activities related to audiovisual services, air transport, fisheries and maritime transport. Under the EEA agreement these restrictions should not apply to citizens or companies established in another EEA state (the EU member states and Iceland and Liechtenstein).

The participation of foreign investors (as well as of private nationals) is restricted by the state monopolies in certain postal services, certain railway services and in the retail sale of alcoholic beverages.

Diplomatic relations Norway has more than 100 diplomatic and consular missions located all over the world. All have their own web sites, which provide detailed information about their services.2 A large number of foreign states are represented in Norway through their embassies. All embassies are situated in Oslo, mostly in the city centre. Several states also have consular representation in the major cities.3

Government Norway is a constitutional monarchy with a parliamentary democratic system of government.

Public power is formally distributed among the Government (the executive), the Storting (the legislature) and the courts (the judiciary). The Government’s most important functions are to

1

WTO review of Norway with further references part II, available at www.wto.org

2

Links to the web sites can be found at http://www.norway.info/

3

A full list with links to web sites of foreign representations and consular contacts is available at

http://www.regjeringen.no/en/dep/ud/about_mfa/diplomatic_relations.html?id=447053

Page 7

submit bills and budget proposals to the Storting and implement legislation and other decisions through the ministries. The wording of the Constitution grants many executive powers to the King, of which all substantial powers are exercised by the Council of State, which comprises the Prime Minister and the other ministers.

The legislative authority is vested in the Storting, a unicameral parliament composed of 169 members. Parliamentary elections are held every four years; the latest was in September 2009.

The Storting passes legislative acts, adopts the fiscal budget, and fixes taxes and indirect taxes, including import tariffs.

The court system comprises courts of first instance, courts of appeal and the Supreme Court.

There are some specialised courts, but the courts normally hear all types of cases. The courts are in general considered effective and the cases are dealt with by modern procedural rules. As an alternative to the ordinary courts, disputes between business relations are often solved through arbitration.

Environmental considerations Norwegian environmental legislation is for a large part on a par with EU environmental law and policy through the EEA agreement, and products satisfying e.g. the EU’s REACH rules regarding chemicals, which are fully operative in Norway, will automatically be accepted in Norway. The same goes for rules on air and water quality, noise, industrial waste, ship pollution and the marine environment. Norway has also implemented the EU rules on genetically modified organisms (GMO’s). Norwegian authorities follow a strict line on GMO’s when that is permitted by the directive.

In addition to rules incorporating the EU environmental law into Norwegian law, there are national rules governing a wide range of activities, for instance on the energy and the industrial sectors, where there normally is needed concessions or licences where the activities can influence the environment.

Intellectual property Norway is a member of the World Intellectual Property Organization (WIPO) and has signed a number of international agreements on intellectual property rights. It is not, however, a signatory of the WIPO Copyright Treaty (WCT), the WIPO Performances and Phonograms Treaty (WPPT), The Patent Law Treaty or the Singapore Treaty on the Law of Trademarks. In the alternative, Norway has incorporated into its national law the EU’s copyright directive, which is in accordance with the WCT and WPPT. Norway acceded to the European Patents Convention in 2008.

Norway has implemented the TRIPS-Agreement into national legislation. Norway’s main IP laws cover the major areas referred to in the TRIPS Agreement: 

Patents: The Patents Act of 15 December 1967 No. 9 (as amended)



Plant Varieties: The Plant Breeders Right Act of 12 March 1993 No. 32 (as amended)



Designs: The Designs Act of 14 March 2003 No. 15



Trade Marks: The Trademarks Act of 3 March 1961 No. 4 (as amended)

Page 8



Copyright: The Copyright Act of 12 May 1961 No. 2



Geographical indications: The Marketing Act of 9 January 2009 No. 2 and the Food Production and safety Act of 19 December 2003 No. 24

Investment incentives Export incentives and guarantees Various export incentives and guarantees are available in Norway. An example is the Norwegian export credit agency, GIEK, which guarantees for Norwegian companies' export credits on behalf of the Norwegian government.4 With assistance from GIEK, exporters can offer credit or finance without carrying the entire risk themselves. GIEK secures competitive terms for the industry and promotes the export of Norwegian goods and services and investment abroad.

GIEK can offer coverage for the export of most types of products and services to over 150 countries. The guarantees can cover single or multiple transactions, and commercial as well as political risk. Commercial risk means the risk of the buyer going bankrupt or failing to pay for other reasons. Political risk includes for instance war, expropriation and actions of the public authorities that prevent payment.

GIEK’s guarantees are issued on behalf of the Norwegian Government. They can be used as security for Norwegian and international banks and other financial institutions to facilitate funding. GIEK’s guarantee terms and premiums largely follow the standards and rates applying to comparable guarantees internationally.

Grants, subsidies and funds to foreign investors Various grants and incentives are available to investors depending on the type of business.

However, few apply to foreign investors.

An example is Eksportfinans which is the Norwegian export credit institution for Export Financing. Eksportfinans is owned by a consortium of banks operating in Norway, as well as the Norwegian Government.

Export financing is offered to foreign buyers to help them purchase Norwegian capital goods and services. Eksportfinans also provide financing to Norwegian buyers with international business activity such as ship owners with revenues in foreign exchange. Additionally, Eksportfinans offers loan to Norwegian exporters to help finance foreign investments, acquisitions and other types of international expansion. The scheme is offered within the OECD framework for export financing (“CIRR-rates”). According to a press release from the Office of the Prime Minister on 18 November 2011, a public entity will assume responsibility for the government-supported export credit scheme that until now has been managed by Eksportfinans. Eksportfinans has accepted to manage the scheme temporarily until a permanent public sector solution is in place, by 1 July 2012 at the latest.

4

Further information on GIEK is available their http://www.giek.no/en

Page 9

National tax incentives for foreign investors Norwegian tax legislation has no incentives designed specifically to attract foreign investors.

However, according to the Norwegian tax act there is no withholding tax on royalty and interest paid to foreign investors. Please note that such income will not be exempt from Norwegian taxation if derived through business activities that are deemed as a taxable business activity carried out in Norway.

Regional tax incentives open to foreign investors There are no regional tax incentives open to foreign investors in the Norwegian tax legislation.

Financial facilities Banking and financial facilities Norwegian legislation differs between banks which may be authorised to provide one or more of the services mentioned in the EU Directive 2000/12/EC Annex 1, including accepting deposits from the general public, and financial companies which may be authorised to provide the services in the mentioned Annex 1 of the directive, except on the funding side. This means that a financing company has to be wholly funded by equity or by its owners.

Conducting financing activity in Norway requires a license as a financial company from the Ministry of Finance or the Norwegian Financial Supervisory Authority (the NFSA). Financing activity is defined as the granting, negotiating, or furnishing of credit or guarantees for credit or otherwise participating in the financing of third parties. This rather broad definition is narrowed down by some exemptions, most noteworthy is that credit provided by a seller of goods or services and certain forms of financing are exempted from the license requirement.

The license requirement in Norway is triggered regardless of how the financing activity is funded.

This means that even though a company has no external funding (either by issuing notes or bonds or accepting deposits) the license requirement might be triggered.

In order to obtain the license referred to above, an application has to be filed with the NFSA. The formal requirements to such applications are that they shall contain all information deemed to be of significance to the processing of the applications. The license application shall have enclosed copies of the (draft) articles of association and an operating schedule for the three first years of operation. The operating schedule shall, as a general rule, contain information about the company’s corporate structure after the establishment or acquisition, an overview of the operating set-up and routines for the business and services that the undertaking will offer, information about the company’s capital composition, a budget for the establishment and administrative costs, budgets including the profit and loss account, balance sheet and cash flow statement for each of the first three operational years and a forecast of the financial position for each of the first three years. Furthermore, information on the company’s shareholders shall be submitted to the extent any shareholder controls more than 10 % of the voting rights in the company. Further, information on the members of the different required corporate bodies shall be submitted, including information in order to evaluate the fit and suitability of the members of the board and the CEO of the company.

Page 10

The NFSA or the Ministry of Finance has up to six months after the reception of complete application to process the application and decide on the license application.

The regulatory authority primarily responsible for the control and supervision of financial institutions is the NFSA. The NFSA is an independent governmental body administratively subordinated to the Ministry of Finance. The NFSA is responsible for granting licenses and supervising credit institutions and other financial institutions. Furthermore, the NFSA participates in international activities and complies with international standards for financial supervision. The NFSA also issues binding regulations and non-binding guidelines for banks and other financial institutions.

In addition, the Central Bank has executive and advisory responsibilities in the area of monetary policy and is responsible for promoting robust and efficient payment systems and financial markets.

Banks and other financial institutions may only conduct business which is deemed as banking or financial institution activities and activities naturally related thereto. More specifically, a bank must not carry on or participate as an unlimited liability partner or co-owner in wholesale or retail trade, manufacturing, shipping, insurance or other business activity not deemed as customary or naturally related to the business of a bank.

There are no legal governmental monopolies regarding banks’ and financial institutions’ activities in Norway. That said, the Norwegian state offers student financing on better commercial terms than the commercial banks normally can, and the Norwegian State Housing Bank provides mortgages for newly built houses on favourable terms.

Exchange controls Business transactions with nationals, residents or non-residents There are no specific limitations, except for limitations that apply equally on nationals, residents and non-residents.

Investment controls Foreign investment is encouraged. However, specific regulations apply in the following sectors: 

The acquisition of waterfalls, supply rights and mining rights are subject to concessions (Industrial Licensing Act 1917, Energy Act 1990, Water resources Act 2000, Mining Act 2009).



The acquisition of long-term lease (more than ten years) of land and real estate is subject to concession (General Concession Act 2003).



Direct investments in petroleum exploration and exploitation require special government license (Petroleum Act 1996).

Since the EEA Agreement came into force in 1994, most sector restrictions are practiced on a non-discriminatory basis towards persons from the EU and European Free trade Association (EFTA) member states. However, specific regulations concerning acquisition of Norwegian farmland and forest remain. In practice, it is difficult for non-Norwegian citizens to acquire such land unless they are willing and able to take up permanent residence in Norway.

Page 11

Money transfer Conducting money transfer in Norway requires a license from the Ministry of Finance or the Norwegian Financial Supervisory Authority (the NFSA).

A central electronic register for information relating to currency exchange and currency transactions is established in Norway (the Currency Exchange Register).

All transfer of funds into or out of Norway must be reported to the Currency Exchange Register.

If the transfer is made through a Norwegian Bank, the bank will make the registration.

On departure from or entry to Norway a physical person is entitled to bring means of payment for a total of NOK 25,000 (or a corresponding amount in another currency). If this amount is exceeded it must be reported on a form to the custom services on entry/departure. In addition the Customs and Excise Department must report currency transactions that are subject to declaration to the Currency Exchange Register.

Currency exchange of an amount exceeding NOK 5,000 or corresponding amount in other currency shall be reported to the Currency Exchange Register by the exchange office.

The police, the Tax Administration, the Customs and Excise Department, the Department of Labour and Welfare and the Norwegian Financial Supervisory Authority shall all have electronic access to the Currency Exchange Register, however only when required in connection with supervision and inspections and when necessary to prevent and combat criminality. The information shall also be available to the Norwegian Central Bank.

Norway has also implemented the EU money laundering directive in the Norwegian Money Laundering Act and the Norwegian Money Laundering Regulation of 2009, implying i.a. that entities with a reporting obligation is subject to know your customer rules and shall report suspicious transactions to the National Authority for Investigation and Prosecution of Economic and Environmental Crime in Norway.

Import/export regulations5 Customs regulations The Norwegian Customs and Excise Service (Nw. Tollvesenet) is responsible for customs procedures. The Customs Commodities and Procedures Act of 21 December 2007 No. 119 consolidates national customs provisions and customs rules and procedures in international customs treaties to which Norway is bound.

The Norwegian Customs and Excise Service cooperates with other European countries within the frame of the EEA Agreement. Norway has also entered into a row of agreements with states outside the EU regarding cooperation and exchange of information. Norway is a member of the World Customs Organization and is a signatory to the International Convention on the Simplification and Harmonization of Customs Procedures.

5

Ref. WTO report on Norway part III available at www.wto.org

Page 12

There are no general registration requirements for exporters or importers, but in some cases importers of certain products must be registered, e.g. importers of certain plants, animal feeding products and alcoholic beverages above 2.5 %.

Documentation requirements include an import declaration specifying the customs value (the Single Administrative Document – SAD) based on EU rules and used by all EU and EEA/EFTA countries, an invoice, a transport document, a certificate of origin when preferential treatment is requested and an import licence or certificate when required. Customs procedures are computerised and all import declarations are handled by the TVINN electronic system, which is accessible 24/7.

Exports Export declarations are required for statistical purposes. For exports of fish only, exporters must be registered, and export fees are levied. Export prohibitions and controls are mostly maintained to protect the environment, human health and to comply with international obligations (see below in paragraph C). Government assistance to exporters includes official financing and guarantees (see Chapter 0 above), and export promotion and marketing assistance.

Foreign trade regulations Norway applies trade embargos on the basis of UN Security Council Resolutions relating to Iran, North Korea, Sierra Leone, Sudan, Lebanon, the Ivory Coast, the Democratic Republic of Congo, Liberia and Somalia. Norway also applies the EU’s sanctions regime against Iran and other states.

Norway prohibits in its Customs Act the re-exportation of counterfeit goods, as well as the import of such goods. There are also regulations on the export of strategic goods, as well as on hazardous substances and GMOs.

Imports Norway is a founding member of the EEA Agreement between the EFTA states except Switzerland (i.e. Iceland, Liechtenstein and Norway) and the EU, which entered into force 1 January 1994. The agreement links Norway to the EU’s internal market in goods, services, workers and capital. No import taxes, quotas or measures having an equivalent effect are allowed for the goods etc. covered by the agreement. The agreement and its extensive secondary legislation—consisting of the entire EU acquis communautaire covering the four freedoms and beyond is made part of national Norwegian law. This includes i.a. extensive rules on public procurement.

Although the EEA Agreement contains provisions on various aspects of trade in basic agricultural and fishery products, it does not cover the EU’s Common Agricultural and Fisheries Policies, and trade in these goods have been liberalised only to a limited extent.

Norway is an original member of, and active participant in the WTO. It grants at least most favoured nation treatment (MFN) to all its trading partners.6 In addition, Norway has through the European Free Trade Association (EFTA – consisting of Iceland, Liechtenstein, Norway and Switzerland) entered into free-trade agreements (FTAs) with over fifty countries. In general, all 6

MFN tariffs and further trade stats on Norway are available at http://info.worldbank.org/etools/wti/docs/Norway_taag.pdf

Page 13

new FTAs signed by EFTA provide for free trade in non-agricultural goods (including fish and fish products), as well as improved market access for some processed agricultural products; trade in services, investment, public procurement and intellectual property rights.

Norway operates an extensive Generalised System of Preferences (GSP). The GSP system is an offer of duty relief allowing the poorest countries in the world the opportunity to import their goods duty free into Norway or with reduced duty rates. The GSP is an acknowledged exception to the MFN obligations under the WTO/GATT principles.7

Manufacturing requirements In the EEA states, manufacturing requirements and standards are normally embedded in EU secondary law and are implemented in national regulations. In Norway, manufacturing requirements are being monitored by national regulatory agencies such as the Norwegian Food Safety Agency (monitors i.a. food safety re import and export), the Directorate for Civil Protection and Emergency Planning (electrical safety, fire prevention, hazardous substances) and the Climate and Pollution Agency (monitors i.a. pollution, waste and product regulations).

Product labelling Norwegian product labelling and packaging rules are to a large extent EU rules implemented into Norwegian law through the EEA Agreement. There are extensive rules on labelling of foodstuffs and food packaging and containers. On non-food product labelling, there are for example detailed rules on the use of the eco label, electric products, naming and labelling of textile products, cosmetic products, chemicals and dangerous products.

Structures for doing business General Business activities conducted by foreign companies or individuals in Norway may be carried out through a Norwegian company (subsidiary) or a branch. Generally, there are no restrictions on the nationality of owners. Except for specific areas such as insurance, banking and financial services, no operating licences are required to conduct business through Norwegian companies or branches.

Limited liability companies The most common form of conducting business activities in Norway is through a limited liability company. In such limited companies, the liability of each shareholder is limited to its respective part of the share capital, i.e. the shareholders are not personally liable for the obligations of the company. There are two forms of limited liability companies: Private limited companies (Nw: “Aksjeselskap”, abbr. “AS”) and public limited companies (Nw: “Allmennaksjeselskap”, abbr.

“ASA”).

The formation of a limited liability company is quite straightforward. One or more founders – which can be foreign companies or individuals – must draw up and sign a deed of formation. The deed must be submitted for registration with the Register of Business Enterprises, upon which the company acquires the status of a legal entity. However, usually foreign companies start up 7

Detailed information on the Norwegian GSP can be found

http://www.toll.no/templates_TAD/Article.aspx?id=146952&epslanguage=en

Page 14

business in a Norway by acquiring from for example law firms an already formed “shelf company”.

Private limited companies (formed after 1 January 2012) must have a share capital of at least NOK 30,000, whereas a public limited company must have a share capital of minimum NOK 1 million.

All shares carry equal rights and one vote each unless otherwise is provided for in the articles of association. The articles of association may prescribe different classes of shares, i.e. different rights to participate in the assets or profits of the company or different voting rights.

Distribution from private limited liability companies are generally restricted to last year’s profit or retained earnings. Under certain conditions, limited companies may repurchase or sell their own shares.

All limited liability companies must have a board of directors comprising minimum three directors, including the chairman of the board. However, the board of directors in a private limited company with a share capital less than NOK 3 million may comprise of only one director (who may also be the sole shareholder of the company) and one alternate director.

At least half of the board of directors and the managing director must be resident in the EEA (i.e. the EU and the EEA/EFTA states Iceland, Liechtenstein and Norway). If the number of employees exceeds thirty, the employees will have the right to appoint one director, and if the number exceeds fifty, the employees will have the right to appoint 1/3 of the directors (but in any event at least two).

In a public limited company, both genders must be represented in the board of directors (as further detailed in the public limited companies act).

Directors have a fiduciary duty to act in good faith and in the best interests of the company.

Under Norwegian law, the board of directors of a private limited company shall maintain a share register of all of the company’s shares and shareholders, whereas the shares in a public limited company must be registered in the Securities Register (VPS). Both share registers are public.

The company’s articles of association is also a public document. Commercial or complicated relations between shareholders are therefore commonly governed by shareholders’ agreements.

Shareholders’ rights must be exercised at the general meeting. Most resolutions are passed by simple majority but certain resolutions, such as issuance of new shares, amending the articles of association, resolving a merger or de-merger, will require a qualified majority as further set forth in the relevant company act.

A public limited company must have a managing director who is responsible for the day to day management. A private limited company must have a managing director only if the share capital is NOK 3 million or more, but may otherwise choose whether it shall have a managing director or not.

All limited companies must elect an independent auditor, and the company’s statutory accounts must be audited. However, private limited companies with limited turnover may elect not to have an auditor if certain criteria are fulfilled.

Page 15

Only public limited companies (or a foreign equivalent) may be listed on the Oslo Stock Exchange or Oslo Axess. The general meeting of a private limited company may resolve to transform into a public limited company and vice versa.

There are a number of other differences between private and public limited companies.

Normally, there is little reason to establish a public limited company unless it is envisaged to list the company’s shares on Oslo Stock Exchange or Oslo Axess.

Company letterheads, invoices and order forms must state the name of the company, where the company’s main office in Norway is located and the company’s registration number.

Partnerships etc Two or more parties, including non-Norwegian persons or companies, may jointly conduct business through a partnership (Nw. ansvarlig selskap or ANS) where all partners are jointly and severally liable for the partnership’s obligations. A limited partnership (Nw. kommandittselskap or KS) is a partnership where at least one the partners has unlimited liability for the debts and liabilities of the partnership and at the liability for at least one the partners are limited to a fixed amount (normally unpaid registered contributions). Partnerships and limited partnerships become legal entities upon registration.

European company Companies also have the option of forming a European Company - known formally by its Latin name “Societas Europeae” (SE). i.e. Norwegian limited companies with a European dimension.

An SE will be able to operate on a European-wide basis and may move its registered office to another member state. So far some listed Norwegian companies have been transformed from ASA to SE.

Branches and representative offices A foreign company or individual may conduct its business activities in Norway through a Norwegian branch (Nw. filial). Branches must operate under a separate trading name which must include the word “norsk avdeling utenlandsk selskap” or ”NUF” and the nation of origin, registered with the Norwegian Register of Business Enterprises.

Requirements for the establishment of a business Alien business law For most business sectors in Norway, there are no restrictions on foreign investment and business in Norway. However, there are special rules regarding ownership and carrying out business in some sectors such as the power sector, including the oil, gas and hydropower sector.

Antitrust law Norwegian antitrust law is in most respects identical to the EU competition rules. According to Section 12 in the Norwegian Competition Act 2004, the Norwegian Competition Authority may intervene against agreements between both public and private companies that restrict competition, or against actions from companies that constitutes an abuse of their dominant position in the market.

Page 16

Furthermore, pursuant to Section 16, the Competition Authority shall intervene against company mergers or the acquisition of direct or indirect control of a company if the Competition Authority finds that the merger or acquisition will create or strengthen a significant restriction of competition.

The Competition Authority may impose fines, penalties or initiate criminal prosecution on companies who are found to be in breach of the rules set out in the Competition Act.8

Environmental regulations All businesses and private persons operating in Norway are subject to the Act Concerning Protection against Pollution and Concerning Waste of 1981. Section 7 and 28 of the act lays down general prohibitions against pollution and waste, together with provisions that allow pollution and waste to occur under certain conditions. In many cases, it may be necessary to retrieve a special permit prior to engaging in activities that cause risks of pollution, which includes the obligation to carry out consequence evaluations of the activity in question.

The act is monitored and enforced by the ministry and the Norwegian Pollution Control Authority.

There is a strict liability for unlawful pollution in the act, but the liability for pollution may also rise from other legislation or contract. In addition, the Pollution Control Authority may impose fines or initiate criminal prosecution on businesses or persons to enforce compliance with the act.9 Please also refer to the general considerations above in Ch. II D regarding EU law applicable when doing business in Norway.

Government approvals In some cases it may be necessary to have government approval prior to establishing or acquiring business in Norway, such as in the energy sector or in cases where it is necessary to have approval from the Norwegian Competition Authority. Whether government approval is required must be considered in each individual case.

Insurance Some insurance types are mandatory by law depending on the nature of the business that is carried out, typically insurance for personal injuries for staff.

Licenses/permits For certain activities it is mandatory to have a license prior to starting up. For example, the following activities require a permit or license:

8



Broadcasting in television and radio



Building projects – authorization of the enterprise



Concessions for entering into the oil, gas or hydro power sector

Link to an unofficial translation to the Norwegian Competition Act can be found

http://www.konkurransetilsynet.no/en/legislation/The-Competition-Act-of-2004/ 9

Link to the Norwegian Act Concerning Protection against Pollution and Concerning Waste is

http://www.regjeringen.no/en/doc/Laws/Acts/Pollution-Control-Act.html?id=171893

Page 17



Transportation, such as buses, ferries and other public transportation

Operation of the business Advertising and marketing Advertising is regulated by the Marketing Control Act of 2009 which for a large part is based on EU law implemented into Norwegian law through the EEA Agreement. The Act relates to the control of marketing, commercial practices and contract terms and conditions in consumer relations, and requires traders to follow good business practice in their marketing.

For some business sectors such as the health sector, there are additional rules and restrictions in law on how marketing can be carried out.

The scope of the Marketing Control Act is broad, and covers all marketing forms. The act has two general clauses in addition to a number of specific provisions. First, Section 2 states that marketing shall not be in conflict with good marketing practice. In the assessment of whether the marketing is in accordance with good marketing practice, emphasis shall be given to whether the marketing offends general ethical and moral views, and to whether it employs offensive means.

Secondly, Section 25 states that no act in the course of trade shall be performed in a way that conflicts with good business practice among traders. Acts in conflict with good business practice can be the use of misleading business methods, unlawful exploitation of trade secrets or copying of a product in a way that is considered unfair under certain conditions.

The Marketing Control Act is monitored by three institutions. The Consumer Ombudsman and the Market Council monitors compliance with the provisions of the Marketing Control Act, with the exception of Chapter 6 which is monitored by the Council dealing with unfair marketing practices. The latter Council is a private initiative, established in collaboration with several major trade organizations representing different parts of the Norwegian market.

If the Consumer Ombudsman or the Market Council finds that there has been a breach of the Marketing Control Act, Section 39 states that they have the authority to impose prohibitions, orders, enforcement penalties or infringement penalties under conditions as specified in Sections 40 to 43 of the act.

Being a private enforcement body, the Council dealing with unfair marketing practices does not have the authority to impose sanctions on the participating parties before the Council. It can merely express its views on whether a marketing act brought in before the Council is in accordance with good business practice or not. The views expressed by the Council are not legally binding, only advisory. Still, they are attributed considerable weight in business life and by the courts.10

10

Link to the Norwegian Marketing Control Act: http://www.forbrukerombudet.no/id/11039810.0

Page 18

Bookkeeping requirements Accounting and bookkeeping obligations are set by two separate acts, the Accounting Act of 1998 and the Bookkeeping Act of 2004. The Norwegian Bookkeeping Act is harmonised with the accounting directives of the EU through the EEA Agreement.

Most businesses will have an obligation to keep accounts under the Accounting Act Section 1-2, including all private and public limited companies.

Pursuant to the Bookkeeping Act Section 2, all companies having an obligation to keep accounts under the Accounting Act Section 1-2 have a statutory bookkeeping obligation. Such companies include those who are resident in Norway or carry out or participate in activities in Norway, and which are taxable in Norway.

The companies must submit annual accounts and other reporting of historical accounting information. The information must be reported in a way that comply with statutory accounting rules, and reflect a true and fair view of the company’s assets, liabilities, results and financial position in accordance with generally accepted bookkeeping practice.

At least every four months, the company must prepare a statutory financial report in accordance with Section 5 of the Bookkeeping Act. According to Section 8 of the Act, the main rule is that bookkeeping shall be in Norwegian kroner (NOK). However, exceptions are made in the Bookkeeping Regulation, Section 4-2. If the functional currency of an enterprise with a bookkeeping obligation is not NOK, the bookkeeping may be done in the other currency. By functional currency is meant the currency in which the enterprise’s financial transactions are mainly conducted. Statutory financial reporting as specified in Section 5 may be in Norwegian, Swedish, Danish or English.

Accounting records, agreements and other documents as specified in the Bookkeeping Act Section 13 must be stored in Norway for either ten or three and a half years, depending on the nature of the document. The books must be made available for control upon request from the Norwegian tax authorities.

Business ethics and codes of conduct In many trade sectors there are codes for good practice. Depending on the nature of the trade, conduct in breach of the code may constitute a breach of compulsory law.

Oslo Stock Exchange requires that all companies who want to be publicly listed must verify that they comply with the Norwegian Code of Practice for Corporate Governance, or the equivalent code of practice in the company's home state or the country in which it has its primary stock exchange listing. If the company does not comply in full with such a code of practice, it must explain why it deviates from the code.

Consumer protection law There is a wide range of statutes regulating contracts entered into with consumers. The main acts are the Consumer Sales Act (2002), the Sale of Real Property Act (1992), the Norwegian Craft Services Act (1989), The Construction of Buildings Act (1997), The Financial Contracts Act (1999) and the Cancellation Act (2000). The acts are meant to protect the consumer and therefore mandatory.

Page 19

The aforementioned Acts state the rights and duties of the consumer and the seller/trader.

Mainly they state what constitutes a breach of contract on either sides and which remedies must be offered if there is a breach of contract.

Please note that under the Consumer Sales Act, consumers have a statutory claims period of five years if the product they have purchased is meant to last sufficiently longer than two years.

Construction There are several statutory and complex regulations regarding construction. It is mandatory to have prior consent from the Planning and Building Authority in order to initiate a construction project. The relationship inter partes is to a large extent regulated through standardised contracts.

Contracts When entering into contracts outside of the consumer protection area, to a great extent the main rule in Norway is contractual freedom. While there has been much legislative activity regarding consumer protection, other parts of Norwegian contract law is mostly based on nonmandatory law and case law. Still, there are some mandatory provisions regarding contracts outside the consumer area that could be enforced in court. So called “entire agreement� clauses might therefore at least to some extent, not be fully enforceable in Norwegian law.

For instance, the Act on Conclusion of Agreements, Authorization and Invalid Declarations of Will regulates how agreements are entered into unless otherwise is decided between the parties.

Furthermore, Section 36 of said Act contains a mandatory general clause regarding unreasonable contract terms. Pursuant to Section 36, an agreement may be wholly or partially set aside or amended if it would be unreasonable or in conflict with generally accepted business practice to invoke it. The clause is applicable on all contracts in the area of law of property and obligations.

Although the bar for actually putting the general clause to use on a specific contract is high, contracting parties in Norway are advised to take note of the provision.

Product Liability The Norwegian Product Liability Act of 198811 is harmonized with product liability directives from the EU through the EEA Agreement. The Act provides a strict liability for manufacturers, importers, distributers and sellers of goods when the product causes damage or personal injury.

In addition, the Act provides a statutory obligation for manufacturers and importers of drugs to have special insurance for the liability set out in the Act for damages caused by such drugs under certain conditions.

Sale of Goods Trade outside of the consumer area is regulated by the Norwegian Sale of Goods Act of 198812.

The Act is non-mandatory, but the Act serves as important background legislation for contracts regarding sale of goods.

11

Link to the Norwegian Product Liability Act: http://www.ub.uio.no/ujur/ulovdata/lov-19881223-104-eng.html

12

Link to the Norwegian Sale of Goods Act: http://www.ub.uio.no/ujur/ulovdata/lov-19880513-027-eng.pdf

Page 20

Cessation or termination of business Termination The dissolution of a company can only be based on a decision by the General Meeting of the Company (normally by 2/3 majority), by a decree of the District Court (in certain cases where the company has not fulfilled its reporting obligations or certain obligations set forth in law) or by court judgment upon demand by a shareholder (in the event of certain unlawful decisions by the General Meeting or the board of directors).

When the District Court has decided to dissolve the company, the company shall be liquidated in accordance with the provisions in the Bankruptcy Act and the Creditors Recovery Act. The Norwegian Limited Company Act (the “Act”) sets out the proceedings that must be followed when liquidating the company: a) A resolution to liquidate the company must be adopted by the General Meeting of the Company, and a liquidation board must be elected. b) Filing of registration form must be made with the Norwegian Register of Business Enterprises informing that it has been decided to liquidate the company and that a liquidation board has been elected. c) The Norwegian Register of Business Enterprises will issue a notification to the creditors, containing a two-month time limit for creditors to report their claims. d) The Company should, as far as possible, specifically notify all creditors with a known address that it has been decided to liquidate the Company. e) The liquidation board should register all of the Company’s assets, privileges and obligations, and prepare a balance sheet. The balance sheet shall be audited, and the auditor's certificate be made available to the shareholders for their inspection at the Company’s offices, and a copy thereof together with the auditor’s report shall be sent to each shareholder. f) The assets of the Company should be sold, and the obligations of the Company should be fulfilled/met. The liquidation board must consider if uncertain or disputed claims must be secured through allocations. g) When the deadline for the creditors to report their claims has expired, and the necessary allocations are made, the assets of the Company should be distributed to the shareholders. h) The Company must deliver tax returns and claim an advanced tax assessment. i) A General Meeting should be held to approve the final liquidation settlement. j) The Norwegian Register of Business Enterprises shall be notified that the company is finally liquidated.

Page 21

According to the Act, Section 16-12, the members of the liquidation board are responsible, without any limitations, for creditors who have not received satisfaction for their claims or whose claims are not sufficiently covered by allocation, unless it is established that the members have acted with due care. Thus, the deadline for creditors to report claims is not preclusive. A creditor’s claim will, however, be time-barred, after three years after the final liquidation is registered with the Norwegian Register of Business Enterprises.

The shareholders are jointly and severally liable, limited, however, to the value each of them has received as his liquidation part, to creditors whose claims have either not been paid or have not been adequately secured during the liquidation.

If no special circumstances exist, such as continuing contracts etc, which may delay the liquidation proceedings, the liquidation proceedings would normally be completed within a period of approximately three months.

Insolvency/bankruptcy Private non-judicially administered reorganization is not regulated by law. A debtor and his creditors are free to make any kind of arrangements they choose. Judicial reorganization is neither regulated by law, as the Bankruptcy Act regulates the settlement of debt, not the reorganization or restructuring of the debtor’s business.

The main acts regulating insolvency and bankruptcy are: 

The Debt Reorganization and Bankruptcy Act (1984)



The Act on Creditors' Recovery Act (1984)

The Creditors Recovery Act regulates debt recovery, sets out relevant deadlines, and determines which of the debtor’s assets the creditors have access to as well as the priority between the claims of the creditors. The Bankruptcy Act regulates the administration of the insolvency cases.

The first part of the Act regulates voluntary and compulsory debt settlement proceedings. The second part of the Act regulates bankruptcy proceedings.

Compulsory composition is an arrangement under the supervision of the court, where the creditors, if the debt negotiations are successful, permit the company to continue as a going concern. The court will rarely grant debt negotiations if it is clear beforehand that they will not be successful. Debt negotiations may result in a voluntary debt arrangement or in a “composition”. All creditors are to agree to a voluntary debt arrangement, and notification of such arrangement shall be sent to the court. If under “composition”, at least 25 % of the unsecured debts shall be paid. A suggestion of a composition arrangement shall be voted over by the creditors in a meeting. At least 60 % of the voting creditors representing at least 60 % of the unsecured liabilities is to agree to a composition arrangement where the debtor is to pay at least 50 % of his debts. At least 75 % of the voting creditors representing at least 75 % of the unsecured debts must agree to a composition arrangement where the debtor offers to pay less than 50 % of the unsecured liabilities. The court must approve any composition arrangement. In practice compulsory composition are seldom successful.

Bankruptcy proceedings are opened following a petition to the local Probate Court from a creditor or the debtor itself. In both cases it must be demonstrated to the court’s satisfaction that the debtor is insolvent, i.e. the company is displaying continuing inability to pay debts as

Page 22

they fall due, while at the same time liabilities exceed assets. The court shall request a deposit to secure court fees and basic costs related to the proceedings. As of January 2012 the size of the deposit is NOK 43,000.

The decision to open bankruptcy proceedings is published in the Norwegian Gazette at the same time naming the court appointed receiver (which in practice will be a lawyer). The receiver is assisted by a creditors’ committee and has a duty to administer the estate in the interest of all the creditors (secured and unsecured).

Proceedings generally follow internationally recognised standards with assessment and ranking of claims, testing and revocation of transactions made within a certain period prior to opening of bankruptcy proceedings, continued operation of the company at the risk of creditors and/or disposal of assets. The bankruptcy proceedings are closed by the final distribution of dividends as approved by the court, and the company is stricken from the Company Register.

13

Labour legislation, relation and supply Employer – employee relations The main acts regulating the employment relationship are: 

Working Environment Act 200514



Holidays act 1988



National Insurance Act 1997



Occupational Pension Act 2005



General Application of Wage Agreements Act 1993

Norwegian employment law consists in general of several compulsory statutes and regulations, providing protection for employees. Irrespective of choice of law, specific mandatory minimum standards (such as working environment, working hours and gender equality) usually apply as a matter of public policy.

Foreign employees are subject to Norwegian employment law, unless their stay is short and temporary.

When a foreign undertaking in connection with the provision of services posts employees to Norway, the situation is regulated by particular legislation concerning posting of workers based on the EU directive on the posting of workers implemented into Norwegian law through the EEA Agreement. The act is i.a. about what kind of terms and conditions the employees are entitled to.

As regards Norwegian employees abroad, Norwegian employment law applies in general if the working relationship, subject to an overall evaluation, is regarded to have a predominant connection to Norway. Participation in the national insurance scheme is conditional on meeting the specific criteria laid down in the National Insurance Act. 13

Further information can be found on the website of The Norwegian Advisory Council on Bankruptcy:

http://www.konkursradet.no/English/ 14

The Working Environment Act is available at: http://www.arbeidstilsynet.no/binfil/download2.php?tid=92156

Page 23

Employment regulations A written employment contract is mandatory, cf. the Working Environment Act (2005) Section 14-6. Statutory law and collective bargaining agreements, if applicable, also govern the contract.

Statutory law regulates, among others things: 

The Working environment, cf. the Working Environment Act Chapter 2-7 and 9



Health and safety cf. the Working Environment Act Chapter 2-7 and 9



Working hours, cf. the Working Environment Act Chapter 10



Employee representation, cf. particularly the Working Environment Act Chapter 8 and Section 16-5



Leave of absence, cf. the Working Environment Act Chapter 12



Dismissals, cf. the Working Environment Act Chapter 15



Transfers of undertakings, cf. the Working Environment Act Chapter 16



Holidays and holiday pay, cf. the Holidays act



Sick leave and sick pay, cf. the National Insurance Act Chapter 8.



Mandatory minimum standards for private pension plans, cf. the Occupational Pension Act.



Gender equality, cf. the Act relating to Gender Equality

If the company has more than thirty employees, and when requested by a majority of them, employees are entitled to representation in the company’s board of directors. The number of board members which the employees are entitled to elect (which is limited to one-third) varies with the total number of employees and depends on whether the company has a corporate assembly (that is, a distinct body in the Norwegian company structure comprising individuals elected by shareholders and employees). If the company does have a corporate assembly (which is mandatory for companies with more than two hundred employees), the employees are entitled to elect one-third of the members of the corporate assembly.

Generally, employees are entitled to be informed and consulted through elected representatives in relation to corporate transactions. Collective bargaining agreements can provide for further employee rights.

In principle, the parties can regulate working conditions in collective bargaining agreements. In addition, general obligations of loyalty and trust apply.

Hiring and firing regulations In the process of appointment of employees certain provisions will apply. Direct and indirect discrimination on the basis of political views, membership of a trade union, sexual orientation, disability or age is prohibited according to the Working Environment Act. In addition, in the case of discrimination on the basis of gender, the Gender Equality Act applies. In the case of discrimination on the basis of ethnic origin, national origin, descent, colour, language, religion and ethical and cultural orientation, the Discrimination Act applies.

Page 24

The same provisions apply during the employment relationship. Thus, the provisions on discrimination will have an effect on the terms and conditions in the contract of employment. In addition, there are limitations to what kind of personal data that may be requested in the process of appointment, and what kind of personal data that may be processed during the employment relationship.

The conditions for the appointment, whether the employee shall be appointed permanently or can be appointed on a temporary basis is regulated in the Working Environment Act. In the event of a breach of these provisions, the court shall, if so demanded by the employee, decide that a permanent employment relationship exists or that the employment shall continue.

Employees cannot be dismissed unless there is an objectively justifiable reason based on the circumstances of the business, the employer or employee. Norwegian employment law makes a distinction between fair, or justified, dismissals and unfair, or unjustified, dismissals. If a dismissal is considered fair or justified, the employment relationship is terminated (in accordance with certain procedures) without further liability. If a dismissal is considered unfair or unjustified, the dismissal is, if required by the employee, invalid and the parties to the employment contract maintain their contractual obligations. In such cases the employee is usually entitled to compensation.

In general, a dismissal will be considered fair or justified if it is based on reductions in production or reorganisation making the employee superfluous (provided that no suitable alternative employment is available within the company), or if it is based on reasons which the employee is liable for and these reasons are considered to be a material breach of his contractual obligations.

Pregnancy, gender, political views, sexual orientation, membership of a trade union, disability or age (except for the lawful retirement age) are not considered reasonable causes for dismissal.

Unless otherwise agreed in collective bargaining agreements, one month's notice (14 days during the probationary period) applies to either party. A longer notice period can apply depending on the employee's age and length of service. A period of notice runs from and including the first day of the month following that in which notice is given. An employee is entitled to his normal wages during the notice period. It is common practice to agree a mutual three month notice period after the lapse of the probation period.

Employees can challenge the validity of a dismissal and demand negotiations with the employer.

If negotiations fail, the employee can bring an action in the courts claiming that the dismissal is invalid. If the dismissal is ruled invalid, an employee can claim compensation.

During the period of negotiations and subsequent legal proceedings, the employee is usually entitled to remain in his post and receive his normal salary until the case is finally settled by the Courts or the parties have reached an amicable agreement. It should be noted that even if the employer eventually wins the case, the employer will not be entitled to claim compensation for salaries paid while the employee has remained in his position.

As regards collective redundancies, which in principle are no different from other dismissals the employer is under an obligation to comply with some specific requirements. According to the Working Environment Act Section 15-2, the employer shall provide information to the Public Employment Service and the employees' representatives. The employer must also consult with

Page 25

the employees' representatives with a view to reaching an agreement to avoid mass layoffs or to reduce the number of persons made redundant.

Labour availability Compared with other countries, a high percentage of the adult population in Norway is in employment. This is mainly due to the majority of Norwegian women being in employment.

Seven out of ten women and almost eight out of ten men are currently in employment. In October 2011, unemployment was 3.3 %. Unemployment was stable at just below 2 % of the labour force from the start of the 1970s until the negative economic trend in 1983-84. In 1993, 6 % of the population was unemployed.

Employment in education has doubled, and employment in health and social services has quadrupled since 1970, whereas employment for the same period fell by slightly less than two thirds in the primary industries and a third in manufacturing.15 As a consequence of the low rates of unemployment, the labour availability is high for jobseekers. Especially in the health care sector, in the oil and gas industry, and in the building and construction sector the labour availability is high.

Work permits Nationals from EU/EEA member states (except those listed below) can work without permits for a maximum of three months, after which they must obtain a residency permit (but not a work permit).

Citizens from Bulgaria and Romania must obtain residency permits before working in Norway.

Nationals from non-EU or EEA/EFTA member states must obtain work permits before entering Norway for employment purposes.

The application fee is NOK 2,500 (about USD 420) for both the residency permit and the work permit. The processing time is one month for nationals from EU or EFTA member states and one to three months for nationals of other countries.16 The Immigration Act contains different regulations concerning nationals from the Nordic countries, other EU/EEA/EFTA countries and nationals from third-countries. Nordic nationals do not need a residence permit. EU/EFTA nationals can also freely enter the country and start working immediately, but they are required to register with the police if they want to stay for more than three months. If they are job-seekers, they may stay in Norway for up to six months.

Nationals from Bulgaria and Romania and third-country nationals still need a residence permit to stay and work in Norway.

Nordic nationals can take up employment in Norway without any form of residence permit.

Citizens of EU/EEA/EFTA countries (hereinafter referred to as EEA nationals) holding a valid identity card or passport, have a right of residence for three months in Norway. The same 15

Please find more information at http://www.ssb.no/english/subjects/06/arbeid_en/

16

Further information concerning work and/or residency permits is available at http://www.udi.no/Norwegian-Directorate-

of-Immigration/

Page 26

applies to family members who are also EEA nationals. Family members who are not EEA nationals must have a valid passport and be able to document that they are a member of the EEA national’s household or supported by him or her.

EEA nationals, who wish to stay in Norway for more than three months, must have a basis for residence and must register with the police. This applies to employees, self-employed, service providers, students, family members who also are EEA nationals and EEA nationals with sufficient funds. Family members of EEA nationals who are not EEA nationals must apply for a residence card. EEA nationals who are job seekers in Norway must register with the police within three months after entry, and can then stay for six months. EEA nationals, who have had continuous legal residence in Norway for at least five years, can apply for a document certifying permanent legal residence. Family members may also be entitled to permanent residence, regardless of their citizenship.

Third-country nationals should, as a main rule, have been issued a residence permit before they are allowed to enter the country. However, there are exceptions. Employees in international companies, skilled workers, specialists and seasonal workers can apply for a permit from Norway as long as they are legally in the country. A residence permit can be given to foreign nationals who have an employer in Norway, to service providers and to self-employed persons. A condition for receiving the permit is that the applicant is at least 18 years old.

Employees who have an employer in Norway also need to document that they have a specific offer of employment in order to receive a residence permit. As a main rule it should be full time work for one employer. Wages and terms of employment may not be less favourable than those stipulated in the current collective pay agreement or those that are normal within that trade or profession in Norway. This permit may be given to skilled workers and seasonal workers. To be considered a skilled worker one must have education of at least three years vocational training on upper secondary school level, hold a craft or journeyman’s certificate or have fulfilled education from college or university. It is a requirement that the qualifications are relevant for the job. A permit may also be given to a specialist who is offered a wage of at least NOK 500,000 per year. The quota for skilled workers and specialists continues to apply. The quota consists of 5,000 permits in 2010. To maintain the co-operation in the Northern Areas, permits may also be given to Russians from the Barents region on different conditions.

Service suppliers include both seconded employees and independent contractors. A condition for receiving a residence permit is that the applicant is a skilled worker and that the qualifications are deemed to be relevant to carrying out the assignment. It is further a condition for a residence permit that wages and terms of employment may not be less favourable than those stipulated in the current collective pay agreement or those that are normal within that trade or profession in Norway.

Self-employed persons may obtain a residence permit if they intend to engage in a permanent business activity. There is no longer a requirement of establishing the business, but there must be a financial basis for it. Furthermore, there is a condition that the business requires that the self-employed person is a skilled worker. Permission for the business must have been granted under other legislation.

Page 27

Residence permits to employees and self-employed persons may constitute a ground for a permanent residence permit. Permits to service suppliers may be given for a period of up to four year and do not constitute grounds for permanent residence permits.

More information about the various types of residence permits is available on the Directorate of Immigration’s web site.17

Safety standards The Working Environment Act contains several provisions regarding procedures to secure sufficient safety standards. The working environment in the undertaking shall be fully satisfactory when the factors in the working environment that may influence the employees’ physical and mental health and welfare are judged separately and collectively. The standard of safety, health and working environment shall be continuously developed and improved in accordance with developments in society.

Although the provisions in general do not define fixed safety standards, the provisions require the employer to implement certain procedures which is supposed to ensure that the safety standard is adequate.

The main procedures are: 

In order to safeguard the employees’ health, environment and safety, the employer shall ensure that systematic health, environment and safety work is performed at all levels of the undertaking. This shall be carried out in cooperation with the employees and their elected representatives. This includes, inter alia, to establish goals for health, environment and safety, have an overall view of the undertaking’s organization, including how responsibility, tasks and authority for work on health, environment and safety is distributed, make a survey of hazards and problems and, on this basis, assess risk factors in the undertaking, prepare plans and implement measures in order to reduce the risks, ensure systematic prevention and follow-up of absence due to sickness.



In order to maintain safety at the workplace, the employer shall ensure, inter alia, that employees are informed of accident risks and health hazards that may be connected with the work, and that they receive the necessary training, practice and instruction, provide necessary satisfactory personal protective equipment, that the employees are trained in the use of such equipment and that the equipment is used. If work is to be carried out that may involve particular hazards to life or health, written instructions shall be prepared prescribing how the work is to be done and what safety measures are to be implemented



The employer shall undergo training in health, environment and safety work.

Further, the employer shall ensure that all personal injuries occurring during the performance of work are recorded. If an employee dies or is seriously injured as the result of an occupational accident, the employer shall immediately and by the quickest possible means notify the Labour Inspection Authority and the nearest police authority. More specific regulations regulate the

17

http://www.regjeringen.no/en/dep/ad/topics/labour-market-policy/

Page 28

safety standards in certain areas, e.g. when it is a possibility for chemical and biological health hazards.

Furthermore, there is an obligation to elect safety representatives and to establish working environment committees.

In addition, more specific regulations apply for certain operations and for different branches.

Unions The unions do play a significant role in the Norwegian labour market. The main unions are The Norwegian Confederation of Trade Unions (LO), The Confederation of Vocational Unions (YS), Unio (Unio represents ten individual unions. Members have a university or college education.

Most members work in the public sector.) and The Federation of Norwegian Professional Associations (Akademikerne).

However, there are differences in the influence of the unions, as can be seen in the variation in the union density in different branches.

The union density varies between the different branches in Norway. In branches as education and research, and other branches in the public sector, the density amounts to 80 %. In the financial services, the oil industry, and health care, there is a union density between approximately 60–80 %. The branches of hotel and restaurant, retail trade and personal services, have the lowest union density.

The unions are in several collective agreements vested with provisions concerning layoffs, information, cooperation and co-determination, provisions relating to terms and conditions of employment, works councils, joint works and working environment councils, and development of competence, etc.

The unions and the employers may agree on different derogations from the Working Environment Act and the Holidays act. As a consequence, the employees covered by a collective agreement will in a lot of cases have better (or different) terms and conditions than those that follow from the Working Environment Act and the Holidays act.

Tax on corporations Tax residency A corporation is resident in Norway for tax purposes if the place of the corporation’s effective management, and in particular the management at Board level, is situated in Norway. Thus, a foreign incorporated company may be regarded as resident in Norway for tax purposes if its place of effective management is in Norway.

Taxable income and rates The regular income tax rate for corporations is 28 %. The regular income tax rate applies to capital gains, as capital gains are treated as ordinary income. All capital gains upon sale of shares are subject to tax and correspondingly, losses are deductible from ordinary income (outside the Exemption Method, see below in paragraph C).

Page 29

Corporations are taxed on the basis of their worldwide income, unless an applicable double tax treaty provides otherwise. In cases of international double taxation, i.e. when foreign sourced income is taxed both abroad and in Norway, the foreign tax may under certain conditions be credited against Norwegian tax levied on the same income.

Expenses connected to the business activity of the corporation are deductible. Expenses not connected to the business activity, are in principle not deductible. However, interests are always deductible.

Deductible losses in one year can be carried forward and set off against taxable income for subsequent years.

The exemption method Dividend distributions and capital gains upon the sale of shares are in principle taxable as ordinary income and taxed at a rate of 28 %. Gains upon the sale of partnership shares are similarly taxable as ordinary income.

However, pursuant to the so-called “Exemption Method”, dividends on shares and gains derived by limited liability companies from the realization of shares and financial instruments (derivatives) with shares as the underlying object are exempt from Norwegian taxation. Any losses resulting upon realization of shares within the Exemption Method will not be tax deductible.

The Exemption Method only applies to dividends and gains on shares in limited liability companies resident for tax purposes: k) within the EEA, provided that if the country is a low tax jurisdiction the company can be proved to be an establishment with “sufficient substance”, and l) outside the EEA, provided the country is not defined as a low tax jurisdiction and the shares have been held for a minimum of two years and represent at least 10 % of the capital and votes of the company.

The Exemption Method applies to both shareholders resident in Norway for tax purposes and to shareholders resident within the EEA for tax purposes provided that the shareholder can be proved to be a limited liability company with “sufficient substance” in that EEA state. For Shareholders resident within the EEA, the Exemption Method can thus be applied to dividends from limited liability companies resident in Norway (withholding tax) and to income from shares (dividends and capital gains) that are effectively connected to business activities that the shareholder carries out in Norway.

3 % of dividends comprised by the Exemption Method are still included in the taxable income and taxed at a rate of 28 % (and therefore subject to tax at an effective rate of 0.84 %). The 0.84 % tax does not apply if the distributing company and the shareholder form a Tax group (i.e. the shareholder holds more than 90 % of the capital and votes of the distributing company).

Page 30

Special tax regimes Qualifying shipping companies may elect a deferred tax regime instead of the ordinary tax regime.

In addition to the general income tax of 28 %, a special petroleum tax of 50 % applies to income from oil and gas production and from pipeline transportation.

Taxation of non-resident corporations Non-resident corporations are subject to taxation (at a rate of 28 % and potentially the 50 % surtax on income from oil and gas activities) on their Norwegian-sourced income. Norwegiansourced income includes: 

Income from business activities which the foreign company carries out, or participates in, and is performed in, or managed from, Norway.



Income from real estate property and movable assets situated in Norway.



Income from business activities related to oil and gas activities on the Norwegian continental shelf.

Dividends distributed from limited liability companies resident in Norway for tax purposes to shareholders resident outside Norway for tax purposes (“non-resident shareholders”), are as a general rule subject to withholding tax at a rate of 25 %. The withholding tax rate of 25 % is normally reduced through tax treaties between Norway and the country in which the shareholder is resident.

Dividends distributed to non-resident shareholders who are limited liability companies resident within the EEA for tax purposes are exempt from Norwegian withholding tax pursuant to the Exemption Method, cf. paragraph C above, provided that the company can be proved to be an establishment with “sufficient substance”. The Exemption Method does not apply to non-resident shareholders who are limited liability companies resident outside the EEA for tax purposes.

There is no income tax or withholding tax on capital gains upon the realization of shares in limited liability companies resident in Norway.

If a non-resident shareholder is carrying out business activities in Norway and owns shares which are effectively connected with such activities, the shareholder will be subject to the same taxation as Norwegian shareholders, as described above.

There are no withholding taxes on interest or royalties derived by non-resident corporations.

Tax on individuals Tax residency An individual who stays for more than 183 days in any 12-month period (or more than 270 days in any 36-month period) is considered to be tax resident in Norway, unless an applicable double tax treaty provides otherwise. Special rules apply to the Norwegian continental shelf.

For individuals who have become resident in Norway for tax purposes, their resident status will only cease to exist if;

Page 31

m) he or she documents that he or she has not stayed in Norway for one or more periods exceeding 61 days in total during the relevant income year, and n) he, she or close family has not owned or controlled a residence in Norway (house, apartment or similar).

For individuals who have been resident in Norway for tax purposes for ten years or more, their resident status will only cease to exist if he or she can document that he or she has not stayed in Norway for one or more periods exceeding 61 days in total for three consecutive income years.

Under no circumstances will tax residence in Norway cease as long as the individual or close family owns or controls a residence in Norway (house, apartment or similar).

Taxable income and rates Tax resident individuals are taxed on their worldwide income and worldwide net assets. The tax liability extends to all kinds of income derived from business activities, capital or personal services/employment.

The regular income tax rate for individuals is 28 %. In addition, a personal income tax or "surtax" is charged on salaries in excess of NOK 471,200 (2011). The surtax rate is 9 %.

Moreover, on salaries in excess of NOK 765,800 (2011) additional surtax of 3 % is levied. The surtax is based on gross income with no deductions (certain deductions are available for self employed individuals). Along with the employees’ part of social security contribution of 7.8 % (also calculated upon gross income), the marginal income tax rate for income from personal services is 47.8 % (28 % regular income tax plus up to 12 % "surtax" plus 7.8 % social security contribution). For self employed individuals the said security contribution is increased to 11 %.

Income from shares in limited liability companies and partnership shares Dividends and capital gains upon the realization of shares in limited liability companies are taxed as regular income at a rate of 28 %. Norwegian individual shareholders are entitled to deduct a calculated allowance when calculating their taxable dividend income. The allowance is calculated on a share-by-share basis, and the allowance for each share is equal to the cost price of the share multiplied by a special risk free interest rate (1.6 % for the income year 2010). Any part of the calculated allowance one year exceeding the dividend distributed on the share is added to the cost price of the share and included in the basis for calculating the allowance the following year.

Partnerships are transparent for Norwegian tax purposes. Thus, the partner is taxed on his proportional share of the partnerships business income. Distributions on partnership shares are taxed according to the same principles that apply to dividends from shares in limited liability companies. Similarly, capital gains upon the realization of partnership shares are taxed according to the same principles that apply to capital gains upon the realization of shares in limited liability companies.

Taxation of non-resident individuals Non-resident individuals are subject to income tax, at the same rates that apply to resident individuals, on their Norwegian-sourced income. Norwegian-sourced income includes:

Page 32



Income from immovable property and from tangible movable property situated in Norway



Income from business activities which they carry on or in which they participate, including activities by employment agencies sending employees to Norway



Income from personal services carried out in private or government employment in Norway, including persons sent to Norway by employment agencies



Income as a director, member of a board or similar controlling body of a company resident in Norway

Dividends distributed from limited liability companies resident in Norway to non-resident shareholders are subject to withholding tax at a rate of 25 %. The withholding tax rate of 25 % is normally reduced through applicable tax treaties.

Non-resident individual shareholders resident within the EEA are liable to withholding tax, but entitled to apply for a partial refund of the withholding tax if the withholding tax is higher that the dividend tax applicable to resident individual shareholder. In such cases the EEA-resident shareholder may choose to be taxed according to the rates that apply to resident shareholders (income tax at a rate of 28 % but the shareholder may deduct a calculated allowance, cf. above).

There are withholding taxes on interest and royalties derived by non-resident individuals Non-resident individuals are subject to Norwegian net wealth tax on the property of a Norwegian business activity carried on by them or in which they participate and on immovable property and movable tangible property located in Norway.

Special rules apply to income derived by non-resident artistes, sportsmen and entertainers.

Tax on other legal bodies - partnerships Partnerships are transparent for Norwegian tax purposes. The income tax on the business income of a partnership is generally calculated according to the same principles that apply to taxable corporations, but the tax is levied at partner-level. The tax is levied regardless of whether the business profits are distributed to the partners or not.

3 % of distributions from a partnership to the partners is taxable as regular income at a rate of 28 % (effective from 1 January 2012).

Capital gains upon the realization of partnership shares are generally taxable at a rate of 28 %.

In certain circumstances (depending on the nature of the assets held by the partnership and provided that the partner is a limited liability company) the Exemption Method may apply to such capital gains (in which case only 3 % of the capital gain is taxable at a rate of 28 %).

For Norwegian tax purposes a business entity will be treated as a partnership if at least one partner (or several partners jointly) have unlimited liability for the entity’s obligations.

Page 33

General tax considerations Tax period The calendar year is the mandatory tax year. On application, a corporate taxpayer may be granted a divergent tax year if certain requirements are met. Normally, Norwegian subsidiaries of foreign parent companies are allowed to use a divergent tax year, matching the parent company’s financial year.

Net wealth tax Individuals are subject to a marginal net wealth tax rate of 1.1 %. Net wealth tax is levied on the assets held by the tax payer on 1 January in the assessment year.

Individuals who carry out or participate in business activities performed in or managed from Norway through a partnership are also subject to the net wealth tax, calculated on the assets held in Norway on 1 January in the year of assessment.

Pay roll taxes Pay roll taxes, i.e. the employer’s part of social security contributions, are levied at the rate of between 0 % and 14.1 % depending on the municipality, being 14.1 % in major cities and lower in certain parts of Norway.

Property tax A tax on real estate may be levied by local municipalities at the maximum rate of 0.7 % of the taxable value of the property.

Stamp duty There is a 2.5 % registration tax upon the transfer of real estate, calculated on the basis of the market price. The stamp duty only becomes effective if the transfer is recorded in the Public Real Estate Register. If the transfer is the result of a merger or de-merger, no stamp duty is payable.

Inheritance and gift tax Inheritance or gift tax is levied upon transfer of items of capital from individuals to related persons. The rate is progressive from 0 to 15 %. For inheritance and gifts from parents to children, the maximum rate is 10 %.

Transfer pricing rules According to Norwegian domestic law, the taxable income of a Norwegian tax payer may be increased if the taxable income has been reduced due to a joint interest with another related party. Thus, any transaction between related parties not based on the arm’s length principle can be adjusted by the Norwegian tax authorities in order to comply with the arm’s length principle.

The determination of arm’s length prices has traditionally been based on the OECD transfer pricing guidelines, and as from 1 January 2008 there is a formal reference to the OECD guidelines in Norwegian domestic tax law.

Page 34

Thin capitalisation Interest payments are as a main rule fully deductible in Norway. This includes interest payments of both Norwegian and foreign tax payers that are connected to the ownership of property or the performance of business etc. in Norway. The same applies for interest payments connected to the ownership of property or the performance of business etc. abroad on which Norwegian tax payers are taxable to Norway. There is no withholding tax on interest payments to foreign creditors.

However, if the debt/equity ratio of a company does not reflect the debt/equity ratio that would have been acceptable to a third party creditor, interest deductions may be denied. There is no particular rule of thumb to be applied as to the debt/equity ratio. The factual circumstances and the risks and the nature of the business in question will have to be examined on a case-to-case basis.

CFC-legislation Current Norwegian CfC legislation (the Norwegian term is “NOKUS�) applies if 50 % or more of the capital in a foreign company, trust or similar resident in a low tax jurisdiction is held or controlled directly or indirectly by Norwegian tax residents. In such cases, the Norwegian tax residents will be taxed for their proportional part of the income and net wealth of the foreign company, trust etc.

VAT Norway has a VAT system that is closely related to the VAT system within the EEC. The overall rate is 25 %. Certain lower rates apply within certain areas, and certain areas are exempted from VAT. Enterprises that carry out VAT liable activities in Norway must register with the VAT registry. VAT paid by a VAT registered enterprise on purchased goods or services is deductible as input VAT.

Tax treaties Norway has a well-developed tax treaty network with more than 80 states. All OECD countries are covered. Most treaties are drafted based on the OECD model. In the majority of Norwegian tax treaties the credit method is applied for the avoidance of international double taxation.

Immigration requirements Immigration controls In Norway, there is immigration controls at the land and sea borders and in the airports.

Immigration requirements and formalities The requirements and formalities which are necessary to fulfil immigrate to Norway depends on several factors such as whether the person are from an EEA Member State, what the purpose of the immigration is (study, work, au pair), what kind of education the person has, the size of the salary agreed with the Norwegian employer, whether the worker has a family in Norway, etc.

In general, however, a residence permit is required if a person shall work in Norway.

Page 35

If the employer has a written power of attorney from the employee, the employer can submit an application for a residence permit on the employee’s behalf to the police district in which the business is located or to one of the service centre for foreign workers. If the employee is an EEA national and wishes to stay in Norway for more than three months, the person must register with the police. The employer cannot do such registration on behalf of the employee.18

Visa Many foreign citizens would need a visa to visit Norway. What type of visa is required, will depend on the reason for visiting. Different types of visa have different conditions, and there are also different conditions depending on the applicant.19 Nationals of Schengen states can stay in Norway for up to 90 days without applying for a visa.

This also applies to foreign nationals who have a residence permit in one of the Schengen states.

Exemption to the visa requirement also applies to nationals of countries that have visa exemption agreements. Some of these countries are also covered by the Schengen Agreement.

Nationals from countries with exemption agreements can stay in Norway for up to 90 days.20

Expatriate employees Cost of living and immigration The cost of immigration depends on the type of immigration. Fee payment when submitting application varies from no payment at all to NOK 3,750 (USD 625).

Driving licences A driving license issued in another Member State in EEA is, subject to certain exceptions, valid in Norway.

A driving license issued in a country outside the EEA is valid for driving up to three months in Norway. If the license holder arrived in Norway before 1 August 2010, the license is valid for driving in Norway for up to one year from the person was registered as received by the Norwegian authorities.

Driving licenses are accepted from countries that are party to the Geneva Convention of 1949 or the Vienna Convention 1968 on road traffic, if the license is issued after the model of such Conventions or by using an EU/EEA model.

18

Please find more information at http://www.udi.no/Norwegian-Directorate-of-Immigration/Central-topics/Work-and-

residence/ 19

Please find more information at http://www.udi.no/Norwegian-Directorate-of-Immigration/Central-topics/Visa/

20

Norway has visa exemption agreements with the following countries: Andorra, Albania (holders of biometric passports),

Antigua and Barbuda, Argentina, Australia, Austria, Bahamas, Barbados, Belgium, Bermuda (BDTC passport), Bosnia and Herzegovina (holders of biometric passports), Brazil, Brunei, Bulgaria, Canada, Chile, Costa Rica, Croatia, Cyprus, the Czech Republic, Denmark, El Salvador, Estonia, Finland, France, Germany, Greece, Guatemala, Honduras, Hong Kong (SAR passports and BNO passports), Hungary, Iceland, Ireland, Israel, Italy, Japan, Republic of Korea, Latvia, Liechtenstein, Lithuania, Luxembourg, Macau (SAR passport), Macedonia (holders of biometric passports), Malaysia, Malta, Mauritius, Mexico, Monaco, Montenegro (holders of biometric passports), The Netherlands, New Zealand, Nicaragua, Panama, Paraguay, Poland, Portugal, Romania, San Marino, Serbia (holders of biometric passports), Seychelles, Singapore, Slovakia, Slovenia, Spain, St. Kitts and Nevis, Sweden, Switzerland, Taiwan (holders of Taiwanese passports that contain an ID card number), The UK, Uruguay, the USA, The Vatican City State and Venezuela.

Page 36

An international driving license is accepted, along with a valid national driving license.

21

Education If one wishes to study in Norway for longer than three months one has to apply for a residence permit for students.

EEA nationals wishing to stay in Norway for more than three months must have a basis for residence and have to register with the police. An identity card or passport is needed, and also documentation showing that the person will not be a burden to public welfare services.

As a rule, to be granted a study permit, one must have been admitted to a field of study at a college or university. However, there are certain exemptions from this requirement.22

Housing Housing costs varies greatly in different parts of the country. In general, it is most expensive in the cities, and especially in the area of Oslo.

Importing personal possessions If you have currency or goods with you when you come to Norway, you are required to report this to the customs service. There are many exemptions from this requirement.

Medical care In general, medical care is covered by the National Insurance System.

Moving costs Moving costs are quite high in Norway due to the general high costs when using manual labour.

Tax liability Persons that are resident in Norway have a duty to pay tax to the Norwegian Tax Administration.

The same applies for companies provided that they are resident in Norway.23 Please refer to the above chapters on tax for further information.

Work permits There are several different work permits, dependent on whether the person is: 

a skilled worker (there are different types of permits for skilled workers. One must have specialist training corresponding to upper secondary education level, hold a craft certificate, have completed a university college or university education or degree, or have special qualifications);



an unskilled worker (seasonal worker and seafarers on board foreign ships);



an employee with a salary of NOK 500,000 or more;



a Russian national living in the Barents region;

21

Please find more information at http://www.vegvesen.no/en/Driving+licenses

22

Please find more information at http://www.udi.no/Norwegian-Directorate-of-Immigration/Central-topics/Studies/

23

For more comprehensive information, please see http://www.skatteetaten.no/en/International-pages/Employers/foreign/

Page 37



a student or researcher; or



a diplomat;

There is a particular regulation to each of the different types of work permits.24

24

Please find more information at at http://www.udi.no/Norwegian-Directorate-of-Immigration/Central-topics/Work-and-

residence/Apply-for-a-residence-permit/

Page 38

This guide has been prepared to provide readers with an overview of t he Norwegian legal system and the main legal

issues arising when doing

business in Norway. The content herein is general,

informational

of

nature and does not

purport to be exhaustive. The infor mation should not be reli ed upon in connection with specific transactions etc, and is not a

substitute or

specific matter. If you have a specific l

egal

question you are welcome to address it to one of our lawyers.

Advokatfirmaet Thommessen AS April 2012

Doing Business in Norway 2012

Doing Business in Norway 2012

Haakon VII’s gate 10

Vestre Strømkaien 7

42 New Broad Street

PO Box 1484 Vika

PO Box 43 Nygårdstangen

GB-London EC2M 1JD

NO-0116 Oslo

NO-5838 Bergen

England

Norway

Norway Advokatfirmaet Thommessen AS www.thommessen.no