Doing Business In... 2022 Comparisons

Last Updated July 14, 2022

Law and Practice


Advokatfirmaet Thommessen AS is considered to be one of Norway’s leading commercial law firms, with offices in Oslo, Bergen, Stavanger and London. It provides advice to Norwegian and international companies and organisations in both the public and private sectors. With approximately 200 lawyers, Thommessen covers all business-related fields of law, including M&A and corporate law, banking and finance, IP, compliance and investigation, insolvency and restructuring, insurance, litigation and other dispute resolution, tax, competition, employment, real estate, technology data protection and cybersecurity, sustainability and climate risk, and energy (hereunder oil and gas, oil service and renewable energy and infrastructure).

Norway has a legal system based on division of power between the different branches of government (ie, the legislator, executive and judicial branches). The legal system is generally based on written statutes adopted by the National Assembly (Stortinget). In certain areas, case law is the predominant source of law. Norway is a member of the European Economic Area and is required to adopt EU legislation in most areas.

The court system is based on general courts covering all or most legal disputes, both legal and criminal. There are special courts in certain areas. The regular court system consists of city/district courts, appeal courts and the Supreme Court. 

As a general rule, foreign investments do not require approval by the Norwegian authorities. However, the Norwegian Security Act (LOV-2018-06-21-24) contains certain provisions that may impose restrictions on foreign investments.

The Security Act does not discriminate between foreign or national investments, but applies equally to all undertakings that have been brought within the scope of the Act. Pursuant to Section 1-3, the Norwegian ministries are empowered to bring undertakings operating within the respective ministry's field of responsibility under the scope of the Security Act.

A company may be brought under the scope of the Security Act if it handles classified information, information or infrastructure of major importance for fundamental national functions or handles activities of major importance for fundamental national functions. This means that the law typically applies to companies in the telecommunication, defence, transport and energy sectors and, furthermore companies involved in food and water supply.

If an undertaking/company has been brought within the scope of the Security Act, an acquirer is obliged to notify the relevant ministry if it is acquiring a "qualified ownership interest". In accordance with Section 10-1, a "qualified ownership interest" is achieved if the acquirer directly or indirectly obtains:

  • a third of the company’s share capital, or interests or votes;
  • a right to become owner of a third of the share capital or interests; or
  • significant influence over the company through other means.

When assessing whether the acquirer has acquired a "qualified ownership interest" pursuant to Section 10-1, shares which are owned or taken over by the acquirer's associates have the same status as the acquirer's own shares. Pursuant to Section 2-5 of the Securities Trading Act, this includes shares or other equity interests that are owned or procured by:

1 – the spouse or a person with whom the acquirer cohabits in a relationship akin to marriage;

2 – the acquirer's underage children, and underage children of a person as mentioned in 1 (above) with whom the acquirer cohabits;

3 – an undertaking within the same group as the acquirer;

4 – an undertaking in which the acquirer themself or a person as mentioned in 1, 2 (above) or 5 (below) exercises influence as stated in the Private Limited Companies Act Section 1-3 subsection (2), the Public Limited Companies Act Section 1-3 subsection (2) or the General and Limited Partnerships Act Section 1-2 subsection (2); or

5 – a party with whom the acquirer must be assumed to be acting in concert in the exercise of rights accruing to the owner of a financial instrument, as well as in cases where a bid is frustrated or prevented.

There is no publicly available list of companies falling within the scope of the Security Act. However, the National Security Authority may provide guidance on whether a company has been brought within the scope of the Security Act on a case-by-case basis.

In addition, the King-in-Council (ie, the government) has an ex officio provision in Section 2-5 of the Security Act, allowing the government to intervene in activities that "may entail a risk that is not insignificant that interests of national security will be threatened". This provision applies irrespective of the distinct provisions of ownership control. There is no time limit on the application of this provision. Hence, it applies to both planned and ongoing activities.

If an undertaking/company is brought within the scope of the Security Act, notification of the acquisition of a "qualified ownership interest" to the relevant ministry is mandatory. Pursuant to the "Regulation of the Security of Undertakings" issued on the basis of the Act (FOR-2018-12-20-2053), the notification must include the following:

  • the acquirer’s name, address, company register number, birth date or similar personal identification number;
  • the company register number of the company that the acquisition relates to;
  • the acquirer’s ownership share after the concerned acquisition is completed;
  • the ownership structure of the acquirer;
  • the names of the person that are members of the acquirer’s board of directors;
  • the names of the persons that are members of the acquirer’s management;
  • possible relations between the acquirer and other existing owners of the company that the acquisition relates to;
  • the acquirer’s ownership interests in other companies that are covered by the Security Act;
  • the acquirer’s ownership interests in other companies within the concerned sector;
  • the acquirer’s annual turnover and annual accounts for the last five years, to the extent this information is available; and
  • other circumstances that the acquirer assumes may be of relevance for the assessment of whether the acquisition shall be approved.

Upon receiving the notification, the relevant authority must issue its decision within 60 working days. If the relevant authority requests further information from the undertakings concerned within 50 working days, the deadline is suspended until such information is provided.

If the relevant authority does not consider the acquisition to be a potential threat to national security, it will clear the acquisition and notify the acquirer of such clearance. If the relevant authority identifies a potential threat, it will submit the acquisition to the Norwegian government for a final decision. The Security Act does not impose a deadline on the government to conclude their final decision.

Notification to the relevant ministry does not have a suspensory effect on the transaction, and approval may be obtained both prior to and after closing. However, if approval is refused, the transaction will have to be reversed.

The relevant authorities may allow the acquisition on the condition that the acquirer implements measures or arrangements imposed to mitigate any concern the relevant authority may have.

However, as the Security Act only recently entered into force, there is no precedents available to illustrate this further.

There is no procedure of administrative review or appeal of the government's refusal to approve an acquisition under the Security Act. The refusal may, however, be brought before the ordinary courts pursuant to the general rules regarding judicial review of administrative decisions under Norwegian law.

Judicial review of administrative decisions is limited to reviewing whether the government had a legal basis for their decision, whether the government was in compliance with the procedural rules and whether the refusal to approve the acquisition was based on the correct factual basis. The court may also decide whether the decision was in accordance with certain fundamental principles of objectivity and equality in administrative law.

If the court concludes that the refusal to approve the acquisition was unlawful, the refusal will be invalidated. Insofar as the grounds for invalidation is repairable, the authorities may issue a new refusal after a new processing of the case. Both the seller and the buyer may bring a refusal before the courts.

The most common type of corporate vehicle in Norway is a limited liability company.

The liability of each shareholder in a limited company is restricted to its respective part of the share capital – ie, the shareholders are not personally liable for the obligations of the company. There are two forms of limited liability companies: private limited companies (Aksjeselskap, AS) and public limited companies (Allmennaksjeselskap, ASA). Only public limited companies (or a foreign equivalent) may be listed on the Oslo Stock Exchange or Euronext Expand, and there is little reason to establish a public limited company unless it is envisaged to list the company's shares on one of these two marketplaces. In terms of listing on Euronext Growth Oslo (a junior exchange which is a multilateral trading facility), the listed entity can also be a private limited company. Joint ventures are normally structured as private limited companies in the Norwegian market.

Private limited companies must have a share capital of at least NOK30,000, whereas a public limited company must have a minimum share capital of NOK1 million.

There are no restrictions on the number of shareholders (ie, a Norwegian limited liability company can have only one shareholder). All shares carry equal rights and one vote each, unless otherwise provided for in the articles of association. The articles of association may prescribe different classes of shares – A, B and C shares – ie, different rights to participate in the profits of the company or different voting rights.

Parent companies and shareholders are in general not liable for their subsidiaries'/the company's debts or liabilities. However, both Supreme Court practice and preparatory work for the current Limited Liability Companies Acts (1997) confirms that the corporate veil can be pierced in extraordinary circumstances.

Shareholders exercise their rights through general meetings. The annual general meeting is generally required to be held each year on or prior to 30 June, to deal with and decide upon the annual accounts and the annual report. Apart from the annual general meeting, extraordinary general meetings may be held if the board of directors considers it necessary, or if the auditor or shareholders representing at least 5% with respect to public limited companies, or 10% with respect to private limited companies of the share capital, demand this in writing.

The formation of a limited liability company is done by one or more founders – which can be foreign companies or individuals – drawing up and signing a deed of formation. Within three months of the formation, the required share capital must be deposited by the shareholder(s), after which the deed of formation must be submitted for registration with the Register of Business Enterprises. The payment of share capital must be documented in the submitted registration, confirmed by a bank, an auditor or law firm.

The company is formally considered as a legal entity upon registration.

Establishing a Norwegian structure for investors not having local board directors in Norway can take between two and six weeks. If there are local board directors with existing local social security numbers, incorporation can be done in approximately one to two weeks, through a digital solution being offered by the Register of Business Enterprises.

Despite a fairly easy incorporation process, foreign companies often start up business in Norway by acquiring an already established “off-the-shelf" company from a law firm. The investor will in such case immediately receive the registration number and control of the shelf company. Registration of a new name, new board, etc, in a shelf company normally takes four to six weeks if the board directors do not have a social security number in Norway and must apply for such number, and one to two weeks if the directors are based in Norway and already has a social security number.

All limited companies, regardless of the size of the entity, are obligated to maintain financial accounts and also have a statutory book-keeping obligation. However, so called "small enterprises" are subject to simplified requirements. Companies must prepare and file annual accounts with the Norwegian Accounting Register by 31 July each year. Penalties apply for late filing. The information must be reported in a way that complies with statutory accounting rules, and reflects a true and fair view of the company’s assets, liabilities, results and financial position in accordance with generally accepted accounting practices in Norway (NGAP).

Private limited companies which have (i) operating revenues that do not exceed NOK6 million, (ii) a balance sheet amount not exceeding NOK23 million and (iii) an average number of employees which do not exceed ten labour-years, are not required to have an auditor.

Norwegian law and market practise prescribes a one-tier management structure. Advisory boards are not very common, but are often used where the majority owner is based outside of Norway.

A public limited company must have a board of directors comprising a minimum of three directors, including the chairperson of the board, while the board of directors in a private limited company may comprise only one director (who may also be the sole shareholder of the company).

Both public and private limited companies are subject to rules regarding employee representation in the board of directors. If the number of employees in the company exceeds 30, the employees will have the right to appoint one director; if the number exceeds 50, the employees will have the right to appoint one-third of the directors (but in any event at least two directors). Public limited companies are required to have a managing director who is responsible for day-to-day management, while this is optional for private limited companies. Most private limited companies have a general manager, registered with the Register of Business Enterprises.

At least half of the board of directors plus the managing director must reside in Norway, or be EEA citizens residing in an EEA country or citizens of the UK residing in such country. For public limited companies there are also certain requirements that both sexes are represented on the board of directors. Listed companies shall also comply with the Norwegian Corporate Governance Code (NUES) on a comply-or-explain basis, which sets forth certain requirements for the composition of the board of directors and a number of other corporate governance principles.

The board of directors is responsible for the management of the company and shall ensure a proper organisation of the business. 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 Norwegian Central Securities Depository (VPS). Both such share registers are publicly available.

Directors of the board have a fiduciary duty to the company and its shareholders. Such duty requires that the board directors act in the best interests of the company when exercising their functions and exercise a general duty of loyalty and care towards the company. Their principal task is to safeguard the interests of the company. Members of the board of directors may each be held personally liable for any damage they negligently or wilfully cause the company.

Norwegian employment relationships are regulated by legislation. The main acts are:

  • the Working Environment Act;
  • the Holiday Act;
  • the National Insurance Act;
  • the Occupational Pension Act;
  • the General Application of Wage Agreements Act;
  • the Equality and Anti-discrimination Act.

Working conditions are to a great extent also regulated by collective bargaining agreements. Traditionally, agreements between the main unions and employer organisation has played a big role in the development of legislation on the labour market.

In principle, collective bargaining agreements are not compulsory. In many industries, collective bargaining agreements are common. If the employer is a member of an employers' organisation and at least 10% of its employees are members of a trade union, the relevant trade union is entitled to demand that the employer is bound by the relevant collective bargaining agreement. In certain areas, such as the construction industry, collective agreements are made generally applicable.

Written Employment Contracts

All employment relationships shall be subject to a written employment contract according to law. This applies to all types of employment, both permanent and temporary. There are statutory minimum requirements for the content of the employment agreement. The contract shall state factors of major significance for the employment relationship and must include the identities of the parties, the workplace, a description of the position/title, commencement date, any probationary period, holidays and holiday pay, periods of notice, wage and other remuneration, duration and placement of working hours, length of breaks, agreements for special working hours arrangements, expected duration or end date if the employment is of a temporary nature, and information about any collective bargaining agreements.

Permanent Appointments Versus Temporary Appointments

As a main rule, all appointments of employees shall be permanent. Temporary employment is only permitted in special instances provided under Section 14-9 (1) of the Working Environment Act, the most common instances being:

  • when the work is of a temporary nature and differs from the work that is ordinarily performed in the undertaking (typically in connection with special projects, seasonal employment, etc);
  • for work as temporary replacement for another employee.

The regulation on temporary employment is strict in Norway. Should the requirements for temporary employment not be met in respect of a temporary appointed employee, the employee will be considered permanently appointed, meaning that the ordinary rules for termination, etc, will apply. The employee may also claim compensation and damages for not being employed permanently.

Zero-hour contracts (ie, contracts where the employee is not guaranteed a certain level of work) are not permitted unless the legal requirements for temporary employment are fulfilled.

Pursuant to the Working Environment Act, the normal working hours are: nine hours per day and 40 hours per week. Employees are entitled to a 30-minute lunch break which is not included in the working hours. 

Different regulations may follow from collective bargaining agreements, whereby normal working hours are usually 7.5 hours per day, and 37.5 hours per week; this is also market practice in many industries. The working time is lower for shift workers, among others.

The total amount of working hours (including overtime hours) shall not exceed 13 hours during 24 consecutive hours and 48 hours during seven consecutive days. The 48-hour limit may be averagely calculated over a period of eight weeks. If combined with the average-calculation of normal working hours, the maximum working hours in a single week may be increased to 60 hours (of which ten hours are overtime work). Employees may not work 60-hour weeks for several consecutive weeks.

Additionally, employees are entitled to daily and weekly off-duty time. Pursuant to Section 10-8 of the Working Environment Act, the main rule is that an employee is entitled to have at least 11 hours continuous off-duty time per 24 hours. The off-duty period shall be placed between two main work periods.

There is no "employment at will" in Norway. Any termination initiated by the employer must be objectively justified on the basis of circumstances relating to the undertaking/the employer or the employee.

Termination due to circumstances related to the employee includes breach of contract. There is generally a high threshold for termination due to circumstances related to the employee.

A workforce reduction due to insufficient workload, downscaling of operations or restructuring will normally be accepted as sufficient and valid grounds for termination. A loss in revenue is not required. The courts will typically evaluate whether the employer has had a true and complete picture of all relevant facts when making the redundancy decision, and whether proper and mandatory procedural requirements are met. Usually the courts will abstain from reviewing the employer's commercial preference on how to run its business.

Norway has implemented the collective redundancies directive. If more than ten employees are to be terminated in the same process mandatory consultations must be conducted with employee representatives, and a notification must be sent to the public welfare administration. Nevertheless, discussions with the employee representatives are in any case recommended to ensure good process. Meetings with employee representatives should be documented in minutes.

If not all employees are to be made redundant, the selection of redundant employees must be based on fair and reasonable criteria determined in advance, preferably in discussions with the employee representatives. Typical selection criteria are seniority, competence and social considerations (eg, age, heavy family responsibilities and/or illness/injury).

Termination due to redundancies is only valid if the employer does not have other suitable work within the employing entity to offer the employee. The obligation to offer other suitable work only applies if there are vacancies or any manpower requirements within the undertaking that the relevant employee is qualified for. The employer's assessment of the existence of vacant positions and the specific employee's suitability should be documented in writing.

Before any final decision in the selection of redundant employees and termination of employment is made, the employer must summon each affected employee to an individual discussion meeting. The purpose of the meeting is to discuss the reasons for the possible termination of employment, and allow the employee to comment on the employer's assessment, correct/supplement the facts and present possible reasons for why the employee should not be terminated. Minutes must be made from the discussion meeting.

A notice of termination may be given after the discussion meeting is held and after the employer's final assessment and decision is made. The notice letter must be in writing and delivered to the employee personally or by registered mail. The notice letter must comply with mandatory formal requirements and shall contain information about the employee's rights to request negotiation, instigate legal proceedings and remain in the position while contesting the validity of the termination. The agreed or mandatory notice period will start to run on the first day of the month following the month in which notice was received by the employee. There are statutory rules for notice periods depending on the employee's age or/and seniority.

There are no statutory rules in Norway stating that employers are obligated to pay redundant and terminated employees a severance pay. However, employers often enter into termination agreements with employees on a voluntary basis as an alternative to the employer's formal termination. Severance pay may be included in such agreements. Many employers see this as an efficient way to reduce its workforce and eliminate any risks of disputes following the terminations.

If a termination of employment is ruled invalid by the court, the employment continues "as is" unless the court finds such continuation clearly unreasonable. The employee will nevertheless be entitled to a reasonable compensation for invalid termination. The size of such compensation varies depending on the employees financial loss, circumstances relating to the employer and employee and other facts of the case, including the employer's compliance with mandatory procedural requirements.

Employers have an extensive duty according to law and collective agreements to inform and consult with employee representatives on issues of importance for the employees' working conditions. Although it is not mandatory, the Working Environment Act presupposes that the employees in an undertaking have an employee representative. This representative does not have to be formally elected.

Trade union representation at a company level is not mandatory by law, but may be required if the employer is bound by a collective bargaining agreement.

Employees are entitled to claim board representation if the company has more than 30 employees.

Norwegian tax resident individuals are subject to income tax on their employment income, wherever earned, when received.

Individuals that are not tax-resident in Norway will, as a general rule, only be tax-liable for the income from work performed in Norway. If an employee stays in Norway for more than 183 days during a 12-month period, or more than 270 days during a 36-month period, the employee will become tax resident in Norway and be obligated to report and pay tax on global wealth and income. Any tax charge on non-resident individuals may be limited where a tax treaty applies.

Income tax is charged at progressive rates up to 47.4%, including social security contribution. The income tax rate is flat at 22%; in addition, a progressive bracket tax is levied for income exceeding NOK190,350 per year, starting at 1.7% bracket tax for the lowest step and 17.4% bracket tax for income over NOK2 million. Employers are obliged to deduct income tax from payments of employment income and report it to Norwegian tax authorities.

Employer social security contribution are charged at 8.2% through the same mechanism. In addition, employers are charged with national insurance contributions on the income. The standard rate is 14.1%, although the rate is reduced for certain geographical parts of Norway. Non-Norwegian workers in Norway may also be part of the voluntary tax scheme PAYE (Pay As You Earn). Under this scheme, the employee will be taxed at a fixed percentage which is deducted by the employer from employment income.

Companies Subject to Taxation

Companies resident in Norway for tax purposes are subject to a flat nominal tax rate, which is currently 22% on their worldwide income. Losses are tax deductible.

If a non-Norwegian company carries out business or participates in business which is managed from Norway, such company will become taxable to Norway on all income and net wealth from such activities. Tax treaty protection may, however, be available. Tax losses may be set off against taxable income for later years and may be carried forward indefinitely.


The Norwegian standard VAT rate is 25%, but lower on food (15%), public transportation and hotel accommodation, etc (12%). The rules on VAT apply to businesses selling goods or services that exceeds NOK50,000 within a 12-month period. If so, the business in question must register for VAT in Norway and add VAT on the invoices to clients and customers. 

Dividends and Capital Gains

Receipt of dividends and capitals gains on shares are in principle exempt from Norwegian taxation for Norwegian limited liability companies under the participation exemption provided that the distributing company is:

  • genuinely established in an EU/EEA state; 
  • if outside the EU/EEA, a minimum 10% of the shares must be owned by the Norwegian company for at least two years provided that the distributing company is not resident in a low-tax jurisdiction; and
  • the distributing company is not receiving a tax deduction for the distribution.

If the receiving company is tax-resident in Norway and holds less than 90% of the shares in the distributing company, 3% of the dividend shall be regarded as taxable income. As this income is taxed at the general rate of 22%, the effective tax rate of such dividends is 0.66%. This tax does not apply to capital gains.

Dividends distributed from Norwegian tax resident limited liability companies to shareholders resident outside Norway are, in general, subject to withholding tax at a flat rate of 25%. The withholding tax rate is normally reduced through tax treaties between Norway and the country in which the shareholder is resident. Dividends distributed to non-resident limited liability companies resident within the EU/EEA for tax purposes are exempt from Norwegian withholding tax pursuant to the participation exemption, provided that the company is the beneficial owner of the shares and can be proved to be genuinely established in an EU/EEA state.

There is no income tax or withholding tax on capital gains on shares in limited liability companies resident in Norway realised by a Norwegian corporate shareholder or a non-Norwegian shareholder, provided that the non-Norwegian shareholder does not hold the shares in connection with a trade or business carried out in Norway. Norway does not impose stamp duty on the transfer of shares.

Tonnage Tax Regime

Norway has a tonnage tax regime for qualifying shipping activities. Companies that qualify are exempt from tax on shipping income, while finance income is subject to tax. In order to qualify for the regime, a number of requirements must be fulfilled. The company must own at least one qualifying asset, which could be a vessel in traffic, certain vessels related to the petroleum industry (supply, seismic vessels, etc), and vessels operating in the offshore wind energy sector. A qualifying asset could also be an ownership interest in a qualifying company or partnership, provided the company owns at least 3% of the shares of the company or partnership.

In addition the company can only perform qualifying business activities, and it cannot own any disqualifying assets. As a starting point this implies that the company can only own qualifying assets and financial assets, but no unlisted shares in companies that do not qualify for the tonnage tax regime. A company under the tonnage tax regime must also comply with certain flag requirements, group election requirements, limitations on bareboat income, etc. 

The Ministry of Finance has proposed to amend the Tonnage Tax Regime to add more flexibility to the regime. Among other things, the amendments sets to allow certain type of "shared activities", that are currently not allowed under the regime, and will reduce the risk of disqualification from the regime, which can cause an involuntary exit.

Research and Development Regime

Norway has a tax initiative called SkatteFUNN research and development (R&D). This is a tax scheme that is designed to stimulate R&D in Norwegian trade and industry. All businesses and enterprises that are subject to taxation in Norway are eligible to apply for tax relief through the R&D scheme. The Norwegian companies and branches of foreign companies with R&D projects can apply for a deduction of 19% of incurred costs, limited to NOK25 million. Even though there are no requirements as to type of business, the projects must:

  • be aimed at developing new or better goods, services or production processes;
  • be aimed at acquiring new knowledge or new skills;
  • benefit the company; and
  • be goal-oriented and limited to achieving these goals.

Tax Consolidation

Group companies remain separately taxable entities for Norwegian corporation tax purposes. Norwegian companies part of the same tax group may, however, consolidate their taxable profits and losses through group contributions. Provided that certain requirements are met, the contributing company can claim a deduction for the contribution in its taxable income while the recipient will increase its taxable income with the same amount.

The ownership requirement for a Norwegian tax group is more than 90%. This entails that the parent company must hold directly or indirectly more than 90% of the shares and the voting rights of the subsidiary at the end of the year in order to be in a position to contribute/receive group contributions.

Group contributions are also available for Norwegian branches of foreign companies resident within the EU/EEA.

Interest on loans is generally deductible for Norwegian tax purposes. However, interest may be denied if Norwegian interest limitation rules apply or if the loan arrangement is not in accordance with the arm's-length principle.

There are no general thin capitalisation rules in Norwegian tax law. However, there are regulations that allow for reclassification of income and deductions between affiliated companies. If a Norwegian entity is regarded as being thinly capitalised, a part of the entity's interest and debts may be reclassified to dividend and equity.

Norway has also implemented interest limitation rules. The applicable rules are dependent on whether the company is part of a consolidated group for accounting purposes. For these group companies, the interest limitation rules apply for interests above NOK25 million for the Norwegian part of the group. For non-group companies, the threshold limit is NOK5 million. Where the threshold amount is exceeded, deductions are limited to 25% of the company's taxable EBITDA, subject to certain exceptions based on equity comparisons between the Norwegian part of the group and the worldwide group.

The arm's-length principle for related-party transactions is incorporated into the Norwegian Tax Act, implying that the Norwegian Tax Authorities may increase a taxpayer's taxable income if the pricing is not in accordance with the arm's-length principle. Both Norwegian and foreign tax authorities monitor multinational companies' internal pricing, and they demand an increasingly analytical and transparent approach in accordance with the arm's-length principle.

More specifically, foreign companies and other businesses are required to provide information and disclosures for transactions and balances between affiliated companies. This mainly applies to foreign companies and other businesses that have (i) controlled transactions with a total fair value of NOK10 million or more in the income year, or (ii) receivables and liabilities with a total value of NOK25 million or more at the end of the income year.

The documentation rules only apply to companies which provide Norwegian tax returns. An exception has also been made from the obligation to prepare special documentation for companies that have less than 250 employees and either have (i) a total sales revenue not exceeding NOK400 million, or (ii) a total balance sheet that does not exceed NOK350 million. However, these exceptions does not apply to companies, etc, which has transactions with companies resident in a state where Norway is not entitled to receive tax information.

There is a general Norwegian anti-avoidance standard that has been developed by the courts and was incorporated into the Norwegian Tax Act in 2020. Under this standard, transactions that have been made with a main purpose of avoiding taxation may be disregarded by the tax authorities.

Furthermore, there are specific anti-avoidance provisions regarding discontinuation of tax positions (carried-forward tax loss, etc) in connection with transactions or reorganisations if it is likely that the primary motive was to make use of such tax position.

The Norwegian rules on merger control are set out in Chapter 4 of the Norwegian Competition Act (LOV-2004-03-05-12) and regulations adopted pursuant to it, in particular the Regulation on Notification of Concentrations (FOR-2013-12-11-1466).

The Competition Act Section 18 stipulates an obligation to notify certain concentrations to the Norwegian Competition Authority (NCA), notably any merger or acquisition of control where:

  • more than two of the undertakings concerned have turnover in Norway in excess of NOK100 million; and
  • the aggregated turnover of the undertakings concerned exceeds NOK1 billion.

The Norwegian merger regulation is modelled after, and to a large extent mirrors, the EU Merger Regulation (EUMR) and will normally follow the guidance and case law of the Commission and ECJ. Consequently, concepts such as a "concentration", "undertakings concerned" and "control" echo those of the EUMR.

Furthermore, joint ventures are subject to merger control if the JV is jointly controlled and the JV is "full-function". The latter entails that the JV has the necessary functions to operate as an autonomous economic entity on a lasting basis.

In addition, the NCA may impose a filing obligation on acquisitions of non-controlling minority shareholdings and concentrations falling below the jurisdictional thresholds (within three months of a change of control or conclusion of the agreement). There are certain examples of interventions by the NCA on such transactions in recent years.

Finally, pursuant to the one-stop shop principle, a concentration that is notifiable to the European Commission is not notifiable to the NCA. Note that this does not apply to products not covered by the EEA Agreement. 

There is no deadline to file a notification of a planned concentration, but the concentration cannot be implemented prior to the NCA clearing the transaction (standstill obligation pursuant to Section 19 of the Act).

The Norwegian merger control procedure consists of a Phase I and a Phase II. In addition, the parties may engage in a voluntary pre-notification dialogue with the NCA. The pre-notification process is informal and has no set time frame. Pre-notification dialogue is recommended in complex cases.

In Phase I, the NCA has 25 working days to assess whether it may want to intervene against the proposed concentration, or alternatively approve the concentration. In the event the NCA notifies the parties that intervention might take place, the NCA must demonstrate that there are reasonable grounds to assume that the concentration will create or strengthen a significant restriction of competition, contrary to the purpose of the Act. If remedies are proposed within 20 working days, Phase I may be extended by ten working days.

The majority of notified concentrations are approved in Phase I.

During Phase II, the NCA must – within 70 working days counted from the day the notification was filed – adopt a commitment decision or issue a statement of objections. If remedies are proposed by the parties after 55 working days, the deadline may be extended by a maximum of 15 working days.

Following a statement of objections, the parties are given 15 working days to comment on the statement. Thereafter, the NCA is given 15 working days to conclude their final decision. However, if the parties suggest remedies after having received the statement of objections, the deadline of the NCA may be extended by 15 working days. Finally, the parties may request an additional extension of 15 working days if necessary. With all possible extensions, the entire period of review may amount to 145 working days.

A decision by the NCA to intervene may be appealed to the Competition Appeals Board.

Many mergers are filed to the NCA through a simplified merger procedure (approximately 60% in 2020), which allows for a lower degree of detail and often a swift process. Simplified merger notifications are normally cleared well within the limit of 25 working days. In order to file a simplified notification, certain alternative criteria must be met, as set out in Section 3 of the Regulation on Notification of Concentrations – for example, concentrations where the parties have no overlapping activities, a combined market share below 20% in markets with horizontal overlaps and below 30% in markets where the parties have a vertical overlap. In addition, certain joint ventures with sufficient limited activities in Norway may also qualify for a simplified merger procedure.

Pursuant to Section 29 of the Competition Act, breaches of the obligation to notify a concentration or the standstill obligation may trigger an administrative fine amounting to up to 1% and 10%, respectively, of the total turnover of the undertaking. 

The Competition Act Section 10 prohibits anti-competitive agreements and practices. The provision mirrors Article 53 of the Agreement on European Economic Area (EEA) and Article 101 of the Treaty on the Functioning of the European Union (TFEU).

In addition to Norwegian case law and preparatory works, the provisions of the Competition Act are interpreted in light of case law from the European Court of Justice, the General Court, the European Commission, the EFTA Court and the EFTA Surveillance Authority (ESA).

Section 10 prohibits any agreements between undertakings, decisions by associations of undertakings, informal collaborations and practices which have as their object or effect the prevention, restriction or distortion of competition.

Exceptions from the cartel prohibition are enshrined in Section 10 (3) of the Competition Act (which mirrors Article 53 (3) EEA and TFEU 101 (3)), targeting, in particular, co-operations where any restrictions of competition is outweighed by efficiency benefits.

Pursuant to Section 29 of the Competition Act, infringements of Section 10 may be sanctioned with administrative fines and imprisonment; note, however, that no individual has been punished for offences to date. These fines may amount to up to 10% of the total turnover of the undertakings involved. 

Abuse of dominance is prohibited under Section 11 of the Competition Act, and corresponds to Article 54 EEA and Article 102 TFEU.

To establish dominance, the undertaking has an economic strength which enables it to prevent effective competition in the relevant market by enabling it to act, to a significant extent, independently of its competitors, customers and, ultimately, consumers. The assessment of dominance largely resembles that of EU law, and will take in to account various measures of economic strength, such as market share, the underlying market structure and the number and position of other competitors.

Behaviour by an undertaking with a dominant position that restrict actual or potential competition, including competitor's opportunities for growth and market entry, may amount to abusive behaviour. Examples of such behaviour that may be covered by the prohibition in Section 11 are loyalty-inducing discounts, exclusive agreements with customers, margin squeeze or other foreclosing behaviour such as predatory pricing and refusal to supply.

A dominant undertaking is nevertheless entitled to provide a justification for behaviour that otherwise could be deemed abusive, hereunder if its behaviour was objectively necessary and proportional or if the behaviour is efficiency-enhancing and generally benefits consumers. The benefits afforded to consumers must be sufficiently probable and impossible to achieve in a less restrictive manner. Further, the behaviour cannot eliminate competition from the market.

Pursuant to Section 29 of the Competition Act, infringements of Section 11 may be sanctioned with administrative fines. These fines may amount to up to 10% of the total turnover of the dominant undertaking.

A patent provides the inventor or the inventor's successor in title, with an exclusive right to exploit an invention conceived within any field of technology provided that the invention is susceptible of industrial application, commercially or operationally.

The Patents Act governs patents in Norway, and the Norwegian Industrial Property Office (Patentstyret) processes patent applications. With respect to substantive patent law (the requirements of novelty, inventive step, susceptible of industrial application, etc), the Patents Act implements the EU Biotech Directive and is consistent with the European Patent Convention. In the processing of the application, it normally takes approximately seven to eight months before the applicant receives the first statement from the Norwegian Industrial Property Office on the patentability. The application will be published in the Industrial Property Office's register and online 18 months after the application is filed. From the receipt of the statement of patentability, it usually takes one to two years until the outcome of the application is finally decided.

If the patent is granted, it may be maintained for up to 20 years, counted from the filing date of the patent application. The protection period may be extended through a supplementary protection certificate for inventions relating to medicinal products and plant-protection products. Applying for supplementary protection certificates may extend the protection period by up to five years for plant protection products and up to five-and-a-half years for certain medicinal products; see Regulation (EC) No 469/2009 and (EC) No 1610/96.

Patent enforcement may be brought before the courts, offering several remedies against an infringer. A practical remedy is to request a preliminary injunction either in separate proceedings or as a part of ordinary proceedings on the merits. The available remedies against infringements in ordinary proceedings are injunctions to stop an ongoing infringement, corrective measures (such as recall, destruction, etc, of goods), reasonable compensation and/or damages for financial loss caused by the infringement. If the patent-holder enforces its patent against an infringer, the infringer will often defend by arguing that the patent is invalid. The infringer must then launch a counter-claim for invalidation, which will be handled by the same court and in the same case as the enforcement action. An alleged infringer can also defend by arguing non-infringement.

Trade marks are governed by the Norwegian Trademarks Act, which implements the EU Trade Marks Directive. A trade mark is a distinctive sign for goods or services in an industrial or commercial undertaking and may consist of any sign capable of distinguishing the goods or services of one undertaking from those of another, such as words and combinations of words, including slogans, names, letters, numerals, figures, pictures, the shape of the goods or their packaging. A trade mark may be acquired by applying for registration or without registration when the trade mark is established by use. A trade mark right provides the proprietor with an exclusive right to use the trade mark in the marketing, etc, of certain goods and/or services.

The Norwegian Industrial Property Office (Patentstyret) processes trade mark applications, and the registration process normally takes between three weeks and eight months, depending on the complexity of the case and whether the application raises any particular issues. The length of protection of registered trade marks is ten years, counted from the day of application. The protection may, however, be prolonged for an unlimited number of additional ten-year periods. A renewal fee must be paid for each ten-year period.

Enforcement of infringement of trade marks may be brought before the courts in preliminary injunction proceedings or ordinary proceedings on the merits. The available remedies are, inter alia, injunctions to stop an ongoing infringement, corrective measures (such as recall, destruction), reasonable compensation and/or damages for financial loss caused by the infringement. The alleged infringer can defend by arguing non-infringement and invalidity. If the infringer wants to defend by arguing invalidity, the infringer has to launch a counter-claim for invalidation, which will be dealt with in the same matter as the enforcement action. 

Designs are governed by the Norwegian Designs Act, which implements the EU's European Designs Directive. A design refers to the appearance of a product – for example, the shape, use of colours, patterns and composition.

Protection of design may be obtained by applying for registering the design with the Norwegian Industrial Property Office (Patentstyret) provided that the product has a new appearance that is not already known before the application was filed. Usually, the Norwegian Industrial Property Office takes a total of three to five months to complete the processing of the application.

The registration provides the proprietor with an exclusive right to use the appearance and form of a designed product for a period of five years counted from the date of application. The protection period can be prolonged for new five-year periods by paying a renewal fee. However, the total protection period cannot exceed 25 years, counted from the date of application.

Enforcement of infringement of designs may be brought before the courts in preliminary injunction proceedings or ordinary proceedings on the merits. The available remedies are, inter alia, injunctions to stop an ongoing infringement, corrective measures (such as recall, destruction), reasonable compensation and/or damages for financial loss caused by the infringement. The alleged infringer can defend by arguing non-infringement and invalidity. If the infringer wants to defend by arguing invalidity, the infringer has to launch a counter-claim for invalidation, which will be dealt with in the same matter as the enforcement action. 

Copyrights are governed by the Norwegian Copyright Act, which implements several EU directives in the copyright area. Copyright is automatically obtained if the following three conditions are met:

  • the work must have been created;
  • the work must be within the literary or artistic area; and
  • the work must be an expression of an original and individual creative effort by the author.

Typical examples of literary or artistic work are written texts, works of photography, music and visual arts. Software is also considered work within the literary or artistic area and, therefore, can be protected by copyright. Also, databases are protected under the Norwegian Copyright Act through a sui generis protection regime. 

There is no registration of copyrights in Norway. The copyright comes into existence automatically once a work is created. The author will enjoy copyright protection for their lifetime and for 70 years after their death.

Enforcement of infringement of copyrights may be brought before the courts in preliminary injunction proceedings or ordinary proceedings on the merits. The available remedies are injunctions to stop an ongoing infringement, corrective measures (such as recall, destruction), reasonable compensation and/or damages for financial loss caused by the infringement. 

Trade Secrets

Trade secrets are governed by the Norwegian Trade Secrets Act, which implements the EU trade secrets directive (Directive 2016/943/EU) and protects undisclosed know-how and business information (trade secrets). To be protected under the Act the information must have commercial value because it is secret, and the holder must have taken reasonable steps to retain secrecy.

The Trade Secrets Act identifies the following acts as infringing acts:

  • unlawful acquisition;
  • unlawful use of trade secrets;
  • unlawful disclosure of trade secrets.

The holder of trade secrets may bring enforcement action before the courts in preliminary injunction proceedings or ordinary proceedings on the merits. The available remedies are injunctions to stop an ongoing infringement, corrective measures (such as recall, destruction), reasonable compensation and/or damages for financial loss caused by the infringement. 

Unfair Marketing

Unfair marketing is governed by the Norwegian Marketing Control Act. The Act contains several provisions protecting the interests of both traders and consumers. For example, the Marketing Control Act prohibits in the course of trade copying the products of another person under such circumstances that the use must be considered unfair exploitation of the efforts or result of another person, provided that it presents a risk of confusion between the products. It is also worth noting that the Marketing Control Act prohibits acts in the course of trade that conflict with good practice among traders.

Acts prohibited under the Marketing Control Act may be brought before the courts, and the insulted party may claim injunctions, reasonable compensation and/or damages.

The main data protection regulations in Norway are the Norwegian Personal Data Act and the General Data Protection Regulation (GDPR).

The GDPR is an EU regulation intended to harmonise data protection regulations across the EU member states. Although not a member state of the EU, Norway has incorporated the GDPR (as with most EU legislation) through its membership of the European Economic Area (EEA).

The GDPR is incorporated in Norwegian law through the Norwegian Personal Data Act, which also supplements the GDPR with certain additional Norway-specific rules. The Personal Data Act and the GDPR applies generally to all processing of personal data in Norway. In addition, there is some sector-specific legislation (eg, with respect to the health sector) which provides additional rules.

The Data Protection Act and the GDPR applies to domestic companies' processing personal data, as well as to the processing of personal data concerning persons ("data subjects") situated in Norway carried out by foreign companies.

The incorporation of the GDPR in Norwegian law harmonises the data protection regulations in Norway with that of the other EU and EEA member states. Hence, save for certain national adjustments and country-specific legislation, a foreign company targeting customers in Norway would be faced with much the same regulations as in other EU or EEA countries.

While foreign companies' processing of personal data concerning Norwegian data subjects is within the scope of the Norwegian data protection regulations, such processing will only be subject to these regulations insofar as the processing in question relates to (i) the offering of goods or services to Norwegian data subjects (whether for free or subject to payment), or (ii) the monitoring of the behaviour of data subjects taking place in Norway.

The regulations will apply to companies irrespective of whether the company in question is the controller (ie, determines the purposes and means of the personal data processing) or a data processor (ie, processes personal data on behalf of a controller – eg, as a contractor) in relation to the processing which falls within the geographical scope.

Foreign companies intending to conduct processing of personal data which falls within the scope of the Norwegian data protection regulations should pay due consideration to what implications this may have when planning to enter the market. In particular, such companies should take into account the requirements for a sufficient legal basis for the processing, to ensure that the processing will in itself be lawful. In total there are six such legal bases on which a company may base its processing of personal data, with the most common for private entities being consent, contract (ie, that the processing is necessary for the fulfilment of a contract with the data subject) and "legitimate interest", which requires a balancing of the interests of the data subject with those of the company to ensure that the processing does not infringe the fundamental rights and freedoms of the data subject. In particular, any contemplated sharing of personal data with other companies should be assessed to ensure that it fulfils these requirements.

Provided that a satisfactory legal basis exists, the company must ensure that it provides the data subjects with sufficient information on how their personal data is processed, and that the company's organisation and information systems relevant to the processing is equipped to enable the data subjects to exercise their rights. Such rights include the right of access to their personal data, the right to demand that their personal data is deleted and the right to object to the processing in certain circumstances.

Consideration should also be made with respect to the age of the company's targeted data subjects, as the age requirement to provide consent to the processing of personal data may differ from other European jurisdictions and depend on the nature of the services for which consent is relied upon as the legal basis. For example, if the consent relates to processing of personal data in the context of an information society service (ie, online retailers, on-demand streaming service providers or social media platform operators) the age of consent in Norway would be 13, whereas the age requirement in the context of other data processing situations may be higher.

If a foreign company intending to process personal data concerning Norwegian data subjects is established outside the EU or EEA then additional requirements are likely to apply. With the exception of a shortlist of pre-qualified third countries (eg, the UK), most countries outside the EU and EEA are not deemed to have an adequate level of personal data protection compared to the requirements set out in the GDPR. This means that if such a third-country-based foreign entity intends to transfer or process personal data regarding Norwegian data subjects in its country of origin, it will be required be required to perform quite extensive comparisons of the data protection laws and regulations between its jurisdiction and Norway, and implement supplementary measures to protect the personal data it intends to transfer. The aim of this exercise is to ensure that such transferred personal data enjoys an "essentially equivalent" level of data protection to that offered under the GDPR in connection with the transfer.

While special requirements in connection with transfers of personal data out of Norway and the EU/EEA are not new, the extent and scope of the transferring company's obligations and responsibilities in this respect have become greatly expanded since the 2020 Court of Justice of the European Union case commonly referred to as "Schrems II", as well as subsequent updated guidance from the European Data Protection Board (EDPB).

Norway's Data Protection Authority (Datatilsynet) is in charge of overseeing and enforcing Norway's data protection rules.

The Data Protection Authority acts as Norway's supervisory authority for all personal data processing which falls within the geographical scope of the data protection regulations applicable in Norway, and is authorised to take enforcement actions against the companies responsible for any non-compliance. The primary enforcement actions available to the Data Protection Authority include corrective orders, coercive fines and administrative fines up to the maximum amount provided for under the GDPR.

The Data Protection Authority may take enforcement actions against both foreign and domestic companies, although administrative fines are the primary consequence that foreign companies are likely to face for non-compliance with the Norwegian data protection rules. During the past year, the Data Protection Authority has declared its intentions to issue administrative fines to foreign companies Disqus Inc. (which provides comment section functionality for websites) and Grindr LLC (a dating app provider) in the amount of NOK25 million and NOK100 million, respectively. Unlawful (in the opinion of the Data Protection Authority) sharing of collected personal data regarding Norwegian data subjects with third parties is one of the breaches of the Norwegian data protection rules relevant in both cases.

Besides the legislative changes mentioned herein, no major legislative reforms are expected in the near future in any of the above legal fields. There are, however, certain upcoming changes to be aware of within the field of corporate law, including the implementation into Norwegian law of the EU's Shareholders' Rights Directive II. This directive will lead to certain changes for shareholders and trustees to ensure that the ultimate owners are given the opportunity to exercise their shareholder rights. Implementing this directive into Norwegian law will lead to periodic announcement of the shareholders, including the ultimate owners of shares held by a trustee.

A new act related to ultimate owners of shares is expected during 2021, leading to a searchable register of ultimate owners registered with the Register of Business Enterprises. Such new act will entail a duty to register for all legal persons, including for foreign entities doing business in Norway.

Advokatfirmaet Thommessen AS

Haakon VIIs gate 1
0161 Oslo

+47 23 11 11 11
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Law and Practice in Norway


Advokatfirmaet Thommessen AS is considered to be one of Norway’s leading commercial law firms, with offices in Oslo, Bergen, Stavanger and London. It provides advice to Norwegian and international companies and organisations in both the public and private sectors. With approximately 200 lawyers, Thommessen covers all business-related fields of law, including M&A and corporate law, banking and finance, IP, compliance and investigation, insolvency and restructuring, insurance, litigation and other dispute resolution, tax, competition, employment, real estate, technology data protection and cybersecurity, sustainability and climate risk, and energy (hereunder oil and gas, oil service and renewable energy and infrastructure).