Doing business in Norway

Tom Eivind HaugPartner/attorney at law

Kingdom of Norway

• 385 186 km²

• Population of 5 063 709

• 13,15 per km²

• Constitutional Monarchy

• Parliamentary system

• EEA-member

Strong economy • GDP pr. capita is the second highest in Europe. USD 99,462 (Rank 3)

• Continuous growth, with about 3.- 3,5% through 2015

• Unemployment rate is expected to be around 3%

• The Government Pension Fund, value of about 3723 billion NOK. (as of November 2012)

• Interesting market despite the market size

Why Norway?

World class industries

R&D activities

Productive and competitive

Rich in resources

Competitive values and structures in work-life

A great place to live

Network of airports

Strong economy

Why Norway?

World class industries

R&D activities

Productive and competitive

Rich in resources

Competitive values and structures in work-life

A great place to live

Network of airports

• Oil and gas

• Maritime

• Marine (seafood)

• Complementary knowledge industries:

• finance industry, Information and communications technologies industry, Knowledge-based services

• Emerging industries:

• Medtech, cleantech and biotechnology

Oil and gas• Sector represents

some 25% of GDP

• some 250,000 jobs, directly and indirectly

• More than 50% of export earnings

• Not only oil and gas export, but also goods and services

Maritime• The Norwegian maritime

sector comprises 7 500 companies, 100 000 employees, a turnover of 410 billion NOK and approx. 10 per cent of the national wealth creation

• Ship owners

• Service providers

• Equipment manufacturers

• Yards

Marine - Aquaculture industry

• Modern, internationally competitive industry that produces high quality food in an efficient manner.

• Aquaculture products account for almost half of the total Norwegian seafood export.

• Dominant species are Atlantic salmon and rainbow trout

• Extensive development with a view toward farming several new species, such as cod, halibut, wolf fish and shellfish.

• A license from the authorities is required to farm fish and shellfish in Norway.

• Future growth in the northern region of Norway

Strong economy

Why Norway?

World class industries

R&D activities

Productive and competitive

Rich in resources

Competitive values and structures in work-life

A great place to live

Network of airports

• Close collaboration between industry and R&D institutions

• Open and attractive research and innovation system, global knowledge hubs and government support schemes

• Costs of setting up R&D activities are internationally competitive

• Well-developed system to protect intellectual property rights

• Norway participates fully in all EU research programmes and activities

Strong economy • Norwegian productivity is much higher than the average of the EU

• Use of advanced technology and a constant focus on productivity due to high labor costs

• Extra value from the petroleum sector

• Trust, the flat structures and open communication at the work place play a vital part in enhancing innovation

• Norway the sixth most competitive country in the world

Why Norway?

World class industries

R&D activities

Productive and competitive

Rich in resources

Competitive values and structures in work-life

A great place to live

Network of airports

IMD World Competitiveness Ranking 2013

Strong economy

Why Norway?

World class industries

R&D activities

Productive and competitive

Rich in resources

Competitive values and structures in work-life

A great place to live

Network of airports

• Norway's economy dependent on the use of its natural resource base

• governmental regulation in order to balance economical-  and environmental interests

• Oil and gas

• Hydropower

• Fisheries

• Forestry 

Strong economy

Why Norway?

World class industries

R&D activities

Productive and competitive

Rich in resources

Competitive values and structures in work-life

A great place to live

Network of airports

• Little hierarchy, flat structures, open communication and cooperation

• High degree of trust between employer and employee and people feel empowered 

• Gender equality is stimulated and the participation of women in the work life is one of the highest in the world

• Balance between work and private life

Strong economy

Why Norway?

World class industries

R&D activities

Productive and competitive

Rich in resources

Competitive values and structures in work-life

A great place to live

Network of airports

• According to the annual ranking from the UNDP, the Human Development Index 2011, Norway is the best place to live in

• Well-developed welfare state with a high degree of social security

• Norway is also green and is a real gem for nature lovers

Strong economy

Why Norway?

World class industries

R&D activities

Productive and competitive

Rich in resources

Competitive values and structures in work-life

A great place to live

Network of airports

Doing business in Norway

• «Ease of doing business 2013» (IFC and World Bank): Norway ranks 6 among the 185 countries listed.

Denmark

Norway

UK

Finland

Sweden

Germany

Regional avrg

France 34

29

20

13

11

7

6

5

Business culture• Flat structures and little hierarchy

• Quick and informal communication

• Focus on cooperation

• Trust among people

• Empowered employees

• Balance of work-and private life

• Gender equality

• Risk willingness

Setting up business

• Formal registration of the Foreign Entity in the Norwegian Company Registry

• No capital is necessary.

• No need to establish a Board of Directors or appoint a Managing Director.

• Accounts must be kept for the Norwegian activity.

• The activity in Norway will be taxed in Norway.

Norwegian-registered foreign enterprises

Setting up business

• Minimum capital

• NOK 30.000 (€ 4.000) for private limited

• NOK 1 mill (€131.000) for public limited

Limited company

Setting up business

• General rule is at least 3 board members

• Share capital below MNOK 3 minimum of 1 member and 1 deputy

• Employees right to elect representatives to the board (more than 30 employees in the company)

• More than ½ of the board members must be living in Norway (alternatively citizen of a state being part of the EEA and living in such state).

Private limited company

Setting up business

• Smaller companies (turnover less than MNOK 5, balance less than MNOK 20 and less than 10 employees) can decide not to appoint an Auditor

Private limited company

Setting up business

• More flexible regulation for dividends

• Instant online registration

• All Private limited companies may have only 1 board member. No deputy

• No requirement for physical meeting for board meetings and general assembly

Planned amendments

Work and residence

• Residence permit needed as main rule in order to work in Norway

• Other rules for citizens of EU/EEA-countries

• Skilled workers

• Unskilled workers

• Russian nationals living in the Barents Region

• Students and researchers

• Cultural/non-profit purposes and exchange programmes

• Diplomats

Types of residence permits for workWork and residence

Work and residence

• Different types of permits for skilled workers

• 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.

Skilled workers

• Skilled worker

• Researcher with own funds

• Job seeker who are newly qualified or a researcher

• Service provider, seconded employees

• Norwegian studies for skilled workers

• Service provider, self-employed contractor

• Additional education/work experience

• International companies

• Seafarers on board foreign ships

• Self-employed persons

• Work on the continental shelf

• Ethnic cooks

• Athlete and trainer

Work and residenceSkilled workers

• These permits are options for unskilled workers, meaning that the position in question does not require a skilled worker

Work and residenceUnskilled workers

• Seasonal worker • Seafarers on board foreign ships

Work and residence

• Cross-border workers

• Special provisions apply to Russian nationals from the Barents Region who commute to Norway to work part-time in Nordland, Troms or Finnmark

• Special rules for unskilled workers

• Russian citizens from the Barents Region who plan to work as unskilled labour in the counties of Nordland, Troms or Finnmark can be granted residence permits for up to two years. This is only possible as long as labour is not available in Norway or from the EEA or EFTA area

Russian nationals living in the Barents

Work and residence

• Norwegian Directorate of Immigration offers dedicated contact person for employers employing workers from outside EU/EEA area

• http://www.udi.no/Norwegian-Directorate-of-Immigration/

• corporate income tax rate is 28% (proposed reduction to 27% in 2014)

• Employer’s social security contributions are normally levied at 14.1%, but lower rates apply to employers that have their place of business in certain areas of Norway

Tax

Tax

• Dividends paid to corporate entities and capital gains on shares realized by such entities are exempt from tax

• Dividends and capital gains derived by individual shareholders are subject to tax at a rate of 28 % to the extent they exceed a tax exempt allowance

Tax

• Dividends distributed from a Norwegian company to a non-resident shareholder are generally subject to a 25% withholding tax on the gross dividend, unless otherwise determined by a tax treaty.

• Tax treaty Russia - Norway =>10% (legal entities and natural persons)

Thank you!