Doing Business In... 2021

Last Updated July 13, 2021


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 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 branches of government (legislator, government and courts of justice). The legal system is generally based on written statutes adopted by the National Assembly. In certain areas, case law is the predominant source of law. Norway is a member of the European Economic Area and is required to adapt 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 Act's scope. 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 sector, the defence sector, the transport and energy sector and companies involved in food and water supply.

If an undertaking has been brought within the scope of the Security Act, an acquirer is obliged to notify the relevant ministry if he or she 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 stock capital, or interests or votes;
  • a right to become owner of a third of the stock 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 point 1 with whom the acquirer cohabits;

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

4 – an undertaking in which the acquirer himself or herself or a person as mentioned in points 1, 2 or 5 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 over 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, 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 the provision. Hence, it applies to both planned and ongoing activities.

If an undertaking 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 (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 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. The refusal may, however, be brought before the ordinary courts pursuant to the general rules regarding 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 the 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 limited liability companies.

The liability of each shareholder in limited companies 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 (a junior exchange which is a multilateral trading facility), the company can also be a private limited company. Joint ventures are normally structured as private limited companies.

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' debts or liabilities. However, both Supreme Court practice and preparatory work for the 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 (with an exceptional extended deadline in 2021 due to COVID-19). 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 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 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 organisation 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 minimum three directors, including the chairperson of the board, while the board of directors in a private limited company may comprise of 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. 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.

Members of the board of directors have a fiduciary duty to the company and its shareholders. Such duty requires that the board members 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.

Temporary employment may also be entered into on a general basis for a maximum period of 12 months; see Section 14-9 (1) (f) of the Working Environment Act. After 12 months, the temporary employment will be terminated unless it is replaced by a permanent or new temporary employment on a different basis in accordance with Section 14-9 (1) of the Working Environment Act. If the temporary employee is not offered a new permanent or temporary employment contract, the employer cannot employ anyone else temporarily on the same basis to perform the same work tasks.

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.

Employment income received from a Norwegian employer (either as tax resident or through a branch in Norway) to an individual working in Norway become subject to Norwegian tax from the first day of work.

Employees 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.

The maximum effective marginal tax rate on income for 2021 is 46.4%. The income tax rate has a starting point at 22%. If the employee's gross income exceeds NOK184,800 per year or gross NOK15,400 per month, a progressive bracket is levied on top of the 22% income tax. The current tax rates for the bracket tax in 2021 differs depending on annual income; this percentage increases with income, up to 16.2%, which is the highest bracket tax level. Along with social security of 8.2%, the effective tax rate could therefore be up to 46.4%. 

The employer will be subject to employer's national insurance contributions on employment income. The standard rate is 14.1%, but depends on which part of the country the employee has a residence in during the specific employment relationship.

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 of 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 (6%) and hotel accommodation (12%). The rules on VAT apply to businesses selling goods or services that exceeds NOK50,000 over a one-year 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 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 90% or less 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 limited liability companies resident in Norway for tax purposes to shareholders resident outside Norway for tax purposes, 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 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.

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. 

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

Norwegian companies part of the same tax group may 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, but there are regulations that allow for reclassification of income and deductions between affiliated companies. In addition, Norway has introduced interest limitation rules implying that interest deduction is limited to 25% of EBITDA if deductions exceed NOK25 million on a group level.

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.

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 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 from which Norway cannot claim 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 with 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. The behaviour can further not 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 his or her 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. The process of reviewing the application normally goes on for 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 date of filing of the patent application provided. The protection period may be extended through the application for and grant of a supplementary protection certificate for inventions relating to medicinal products and plant-protection products. By applying for a supplementary protection certificates, the protection period may be extended 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 enforce 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, and pictures, or 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 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 years periods. To prolong the protection 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 in 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. Normally, 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 extend 25 years, counted from the date of application.

Enforcement of infringement of designs may be brought before the courts in preliminary injunction proceedings or in 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 be 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. Other work that is also considered as work within the literary or artistic area is software, and therefore able of being 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 come into existence automatically once a work is created. The author will enjoy copyright protection for the lifetime and 70 years from the first year after the author's death.

Enforcement of infringement of copyrights may be brought before the courts in preliminary injunction proceedings or in 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. 

Trade Secrets

Trade secrets are governed by the Norwegian Trade Secrets Act, which implements the EU's Directive on the Protection of Trade Secrets 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 in 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. 

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 to copy 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 which conflicts 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 you seek to rely on consent 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 short-list of pre-qualified third countries, 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 is 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 in 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, inter alia, 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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Trends and Developments


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 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).

Corporate and M&A

2020 was a year of record activity on Euronext Growth Oslo, with as many as 49 new listings. Euronext Growth Oslo (formerly Merkur Market) is a multilateral trading facility and a junior exchange in Norway. It has never before welcomed as many newcomers as in 2020. The companies admitted to Euronext Growth during 2020 are part of a group of 84 companies listed on the marketplace since it was launched in January 2016. The activity was strong also in the first quarter of 2021, but slowing somewhat down in the second quarter, with investors being more selective and sensitive to increasing interest rates. In short, a listing on Euronext Growth Oslo offers access to the capital markets, whilst being an efficient and quick way of going public. The admission process is swift, with a company normally being able to complete the listing process (including preparations) within four to eight weeks. The formal process towards the stock exchange is only two weeks.

The past 18 months have shown that deal-making can indeed be done digitally. Roadshows, management meetings, negotiations and closings are frequently done online and via video-conference platforms such as Microsoft Teams in the Norwegian market. The "digital deal" is a trend that will continue post COVID-19, as market players have grown accustomed to efficient ways of deal-making. The Norwegian market offers digital signing of deal documents, very few requirements for "wet ink" documents and public authorities with digital solutions readily available. Signings and closings are most often done in video meetings or by exchanging documents via email. 

ESG and the new EU rules on taxonomy continue to impact business plans and deal-making. Companies within renewable energy, tech and life science have experienced a boom in terms of valuation and transaction size in the last 12 months. Health and aquaculture have also been strong sectors. The Norwegian government released its 'Climate Plan 2021-2030', indicating a tripling of carbon tax, and a suite of actions and proposals to enable the green shift.

The energy sector in Norway is key to the economy. Due to a governmental stimulus package approved in 2020, a significant number of projects on the Norwegian continental shelf are expected to be progressed to an investment decision during 2021 and 2022. This provides for increased activity within oil and gas in the shorter term.

The M&A pipeline for the third and fourth quarters of 2021 is looking promising. With positive vaccine news, the market seems to be anticipating the end of the pandemic, and we now see that financial sponsors as well as industrial players are positioning themselves for a high M&A activity in the remainder of 2021, perhaps overtaking the capital markets, which slowed somewhat down in the second quarter, with a more selective approach from investors.

In terms of legal developments, the Market Abuse Regulations (MAR) entered into force in Norway on 1 March 2021, with the key changes being:

  • expanded scope for the market abuse rules;
  • definition of inside information – MAR codifies the case law of the European Court of Justice and thus clarifies (more than changing) certain details;
  • new rules on cancellation of orders;
  • MAR sets out a number of patterns of behaviour that are generally considered not to represent insider trading or market manipulation – note that the specific facts and circumstances of such a case remains subject to a final test by the supervisory authority (ie, whether the behaviour was "legitimate" or not); 
  • extensive changes to the regulation of primary insiders and their related parties' reporting obligations in the Norwegian market;
  • a new regime on market soundings;
  • reporting duty on suspicious orders and transactions significantly expanded;
  • significant amendments on process for how to delay disclosure of inside information;
  • new detailed rules related to insider lists.

Restrictions to Foreign Investment

The Security Act entered into force on 1 January 2019 and is therefore relatively new. Hence, practice regarding the interpretation and applicability of the relevant provisions is still limited.

As a general point, the Security Act involves a certain level of legal uncertainty and lack of predictability to the companies involved. There is, in principle, a risk of involvement from the authorities at all times during the acquisition process. Even if a company is not subject to the provisions of the Security Act at the time the acquisition is initiated, the relevant ministry may initiate the administrative process to bring a company within the scope of the Act during the acquisition process. In addition, pursuant to Section 2-5 of the Security Act, the King-in-Council (ie, the government) may intervene during the acquisition process.

The latter recently occurred for the first time. In a royal decree issued 26 March 2021, the government ordered that Rolls Royce had to stop the sale of the Norwegian company Bergen Engines to companies within the Russian TMH Group, regardless of the fact that the target company had not been brought within the scope of the Security Act.

Pursuant to Section 2-5, the government found that the sale of Bergen Engines to the TMH Group represented a "not insignificant risk" that interests of national security would be threatened. According to the government, the decision to stop the acquisition was "clearly necessary to ensure that interests of national security will not be threatened". As part of the decision, the government placed a block on any transfer of shares, assets, property, industrial or technological information or any other rights held by Bergen Engines to TMH Group.

The government argued that the manufactured engines and technology in Bergen Engines' possession would be of great military significance to Russia. A strengthening of Russia's military capacity – that is, the export of technology and engines to Russia – would be in clear contravention of Norwegian security policy interests and the policy interests of Norway's allies. While neither the products nor the technology in Bergen Engines' possession were subject to export restrictions, Russia had faced significant challenges in gaining access to such products and technology since the imposition of sanctions on the country in 2014. Hence, as concluded by the government, the acquisition may have been an attempt to circumvent export control regulations and represented a risk to national security.

The decision is the first of its kind, bringing some long-awaited clarity to the interpretation of the Security Act. Similarly, the Bergen Engines case illustrates the above-mentioned potential lack of predictability for the companies involved in the acquisition.


Employers' work in promoting equality and preventing discrimination

All Norwegian employers have a general duty to work actively and systematically to promote equality and prevent discrimination in the workplace. On 1 January 2020, this duty was extended and the legislative change will take effect for annual reports published in 2021.

The purpose of the legislative changes is to increase awareness of gender equality in Norwegian companies and make employers more accountable. Further, the extension of this duty is meant to ensure real equality in working life by giving companies a clearer and more concrete social responsibility.

The duty to work actively to promote equality and prevent discrimination in the workplace and the duty to report on this work has been extended to include the following.

  • A requirement for employers to document their work on promoting equality and preventing discrimination. Norwegian authorities shall have access to the documentation to be able to inspect that businesses are compliant with this duty.
  • The duty covers more areas than before, such as a duty to prevent gender-based violence and discrimination based on multiple grounds.
  • The duty applies for all businesses with 50 employees, or more and all businesses with 20 employees or more if one of the parties require it. Any issues shall be reported in the companies' annual reports or in other publicly available documents.
  • Companies shall report on:
    1. the status of the company when it comes to gender equality in the business; and
    2. how the business complies with the duty to work with promoting equality and preventing discrimination in the workplace.

The employer's obligations under the Equality and Discrimination Act shall be founded with the company's board of directors.

COVID-19 – working from home

During the worldwide pandemic, a large number of Norwegian employees have worked from home. This has raised questions regarding a need to adjust and update the current legislation on home working.

According to the current legislation on home working, employers have to enter into a written agreement with the employee if the employee is to work from home over a period of time. However, these regulations do not set out whether a written agreement when working from home is recommended or even imposed by the government. On this basis, the Norwegian Ministry of Labour and Social Affairs has issued a hearing for the first proposal to make changes to the regulation regarding working from home. The ministry suggests the following.

  • Clarifying the scope of the regulations.
  • Implementing an exception from the requirement to enter into a written agreement in situations when working from home is required due to recommendations from the Norwegian government. In such cases, the Ministry is suggesting that the employer shall instead be obligated to consult with employee representatives and inform the employees about the situation following such consultations.
  • Including a clarification in the provision stating that the employer is still responsible for the employees' working environment when working from home. This will most likely also include the psychosocial working environment.
  • The Norwegian Labour Inspection Authority shall be given the mandate to inspect whether the employer complies with the regulations.

The deadline for the hearing is 23 July 2021. Potential changes to the regulations regarding working from home can be expected later in the year.

Data Protection

Data protection continues to be a focus area of private businesses and the public sector in Norway in 2021. With the first years after the birth of the new Norwegian Personal Data Act (implementing the GDPR) in 2018 having been characterised by an increase in awareness concerning the significance of the GDPR (and the potential implications of non-compliance) among the general public, the last year has seen businesses focusing on implementing and further developing policies and procedures to ensure compliance – with privacy by design and data protection impact assessments (DPIAs) becoming more familiar concepts. This development is undoubtedly a result not only of the GDPR having matured as a key legal factor for businesses and the public sector, but also a consequence of an increase in data protection enforcement by the Norwegian data protection authority (Datatilsynet).

Regulatory enforcement

During the past 12 months, Datatilsynet has imposed (or notified its intention to impose) a number of fines to both foreign and Norway-based private companies, as well as public bodies such as municipalities. Of particular interest are the significant fines notified to foreign companies; in January 2021 the dating app Grindr received an notification of an administrative fine of NOK100 million for having disclosed user data to third-party advertisers without consent, and in May 2021 Datatilsynet notified of its intention to fine USA-based Disqus Inc NOK25 million for, inter alia, profiling Norwegian data subjects without a legal basis (pursuant to Articles 5(1)(a) and 6(1) GDPR) and failing to provide data subjects with information in accordance with Article 13 GDPR. These two potential fines are many times higher than any previous fine imposed by Datatilsynet, and there is a general trend towards more a more aggressive enforcement practice – regardless of the severity of the breach. As enforcement increases in extent, we may start seeing companies appealing significant enforcement action, and thus increasing the importance of Datatilsynet ensuring thorough and transparent investigations.

Data transfers – Schrems II

The GDPR data transfer framework in the wake of the Schrems II decision continues to cause frustration and challenges for Norwegian businesses and the public sector – in particular for the large volume of entities operating in a cloud environment provided by US cloud vendors. Vendors previously having relied on the "privacy shield" are faced with more stringent and granular requirements from their Norwegian customers – who are now facing stricter requirements when it comes to undertaking data transfer adequacy assessments before relying on standard contractual clauses (SCCs) and binding corporate rules as the basis for cross-border data transfers to third countries. With a UK adequacy decision expected to be adopted in the not-too-distant future, transfers to countries such as the USA and India are the most common source of concern. Datatilsynet has issued guidance on the subject, primarily referencing the EDPB recommendations on supplementary measures. However, there is clearly a strong need for further guidance from the EU and Datatilsynet to both controllers and processors on how to fulfil, for example, their accountability requirements in a world where global data transfers are inevitable.

Cybersecurity and data breaches

Data breaches involving personal data, as reported to Datatilsynet, have continued the increasing trend we have seen since the implementation of the GDPR (although last year's increase was not as significant as in previous years). However, it remains unclear whether this is a result of an actual increase in events or merely of higher reporting rates.

While the majority of reported data breaches occur without any third-party intervention, the past year has seen an increased public interest and awareness concerning cyber-attacks. The increased interest has perhaps been spurred by several recent high-profile cases – notably, two successful cyber-attacks against members of the Norwegian Parliament (Stortinget).

Human error still remains the most common cause for attackers gaining access to an organisation's IT systems – for example, by gaining access credentials through phishing attacks. Our experience is that many companies are responding to the threat of cyber-attacks with an increased focus on organisational measures and employee-awareness training, as well as drafting internal plans for how to respond in the event of an attack and co-ordinating between the company's legal and technical advisers.

What next?

With Datatilsynet and other regulators such as the Norwegian Consumer Authority (Forbrukertilsynet) increasing their enforcement activities against data protection violations, as both the public and private sectors continue to undergo massive digital transformation projects, data protection, cyber-assurance/security and GDPR compliance will remain key topics in boardrooms in the years to come. Businesses are now generally aware of their obligations under the GDPR and have had ample time (three years) to adapt and adjust to the legal framework. Any "grace period" is now long past, and failure or unwillingness to put in place an adequate compliance regime is likely to be met with less patience and stronger administrative action from the regulators. Going forward, it will be interesting to see how new or upcoming legislation from the EU which seek to govern various dimensions of the digital space, such as the PSD2 Directive, the EU Digital Services Acts and the ePrivacy Regulation, will co-exist with the GDPR and national data protection laws.

Intellectual Property

The new Norwegian Trade Secrets Act

On 1 January 2021, a new Norwegian Trade Secrets Act, implementing Directive (EU) 2016/943 on the protection of undisclosed know-how and business information (trade secrets), entered into force. The purpose of the Act is to clarify and strengthen the legal protection of trade secrets and know-how.

Under the new Act, there is a requirement that the holder of privileged information must have taken reasonable steps to keep the information secret. This requirement was also applicable under the current law, but the requirement is strengthened under the new Act. From now on, it's even more important for businesses to implement sufficient measures to protect unique information from unauthorised disclosure or misappropriation.

Other changes relate to which type of acts constitute an infringement of trade secrets and the enforcement measures that may be invoked when trade secrets are infringed. The Act also strengthens the measures that are available to the holder when a trade secret is infringed.

Growth in patent litigation for technology relating to the aquaculture industry

In the last few years, there has been a growth in patent litigation for technology relating to the aquaculture industry. The development of commercial aquaculture in Norway began around 1970, and the industry has grown to be one of the largest in the country. According to the Norwegian Industrial Property Office, the last few years have been record years for patent applications relating to aquaculture. The growth is expected to continue.

Counterfeit infection control products

Through the pandemic, the Norwegian Industrial Property Office has seen an increase in cases relating to piracy and counterfeiting of trade marks in Norway. Organised criminals have taken advantage of the pandemic by distributing large batches of counterfeit infection control products with deficient quality. Counterfeit infection control products have also been discovered in other European countries.

The Norwegian Industrial Property Office has worked closely with other Norwegian authorities within the "Governmental network against infringement of intellectual property rights" to implement awareness-raising measures regarding piracy and counterfeiting of trade marks, and to share information. The network has created a website (, which is operated by the Norwegian Industrial Property Office and provides information from the different authorities on piracy and counterfeiting of trade marks.

Amendments to the Norwegian Trademark Act and the Norwegian Customs Act

To implement the Trademark Directive (EU) 2015/2436, comprehensive amendments to the Norwegian Trademark Act and the Norwegian Customs Act have recently been adopted.

The amendments to the Norwegian Trademark Act will modernise and clarify the regulations. The rules on which signs can be registered as a trade mark will be technology-neutral, and the formal requirements for trade mark registrations will be simplified. The amendments to the Norwegian Customs Act will make it easier for trade mark holders to prevent the import of pirated copies, by being able to ask for assistance from the Norwegian Customs. In relation to the increase in the distribution of counterfeit infection control products, it is worth mentioning that the amendments are also proposed to simplify procedures related to the destruction of consignments containing counterfeit goods, and in that way strengthen the Customs' control of goods that infringe intellectual property rights.

The amendments will most likely enter into force during 2021.

Competition Law

In 2020, the Norwegian Competition Authority (NCA) received 93 merger notifications, which is a decline from the average in the previous five years (103) and contrary to the NCA's prediction following the outbreak of COVID-19. The NCA issued three statements of objections in merger cases in 2020 and banned one merger. The NCA has also adopted or issued statement of objections in three cases regarding incomplete or incorrect information in merger proceedings. With regard to cartel cases, the NCA issued two decisions and two statements of objections.

Increased level of the fines imposed

A notable trend over the last years has been a general increase in the level of the fines imposed by the NCA. To date, the highest fines for cartel activity were imposed on two alarm companies accused of collusion in the market for the provision of alarm services to residential customers. The fines imposed on Verisure AS (NOK766 million in 2020) and Sector Alarm AS (NOK467.3 million in 2019) exceeded NOK1.2 billion (V2020-32/V2019-8). Furthermore, three Norwegian grocery chains may be faced with fines amounting to a total of NOK21 billion.

Follow-on damages claims

In 2021, for the first time, a cartel decision adopted by the NCA may be followed by damages claims by consumers. A customer association recently announced that it intends to file a claim against alarm service providers on behalf of 400,000 customers, following the NCA's decision in the alarm services market.

Concluding investigations by adopting commitments

The NCA has broadened its use of its policy toolbox. In 2020, the NCA concluded investigations by adopting commitment decisions for the first time, in two different cases, as follows.

  • In Ringnes (V2020-20), the company was suspected of hindering other breweries and suppliers from accessing the market, allegedly in violation of the prohibition of abuse of a dominant position. The investigation was concluded with a commitment decision, pursuant to which Ringnes would not conclude agreements granting itself exclusive rights to deliver beer to bars and restaurants.
  • In Circle K and XY (V2020-26), the companies were suspected of co-operation on retail fuel prices and thus to take part in an anti-competitive agreement, allegedly in violation of the prohibition of anti-competitive agreements. The companies committed to not publish recommended list prices for retail fuel on their respective websites.

Increased attention on procedural matters

A fourth notable trend is an increased enforcement against breaches of procedural rules, such as information requirements. In several sectors, certain market actors are subject to an obligation to inform the NCA of any transactions (including both minority acquisitions and concentrations falling below the filing thresholds). This applies, for example, to sectors such as fuels, waste, groceries, newspapers, broadband, concrete and accounting systems. Two examples are as follows.

  • In 2020, the NCA intervened against a failure to comply with said obligation, for the first time. The grocery chain Norgesgruppen was fined NOK20 million for not having informed the NCA of the purchase of a retail premises (V2020-25).
  • The passenger transport company Vygruppen was fined NOK7.5 million for providing incorrect information in a merger notification (V2020-15).

Both decisions were revoked in March 2021. The Vygruppen case was repealed by the Competition Appeals Board and the NCA closed the case thereafter as it did not prioritise to open a new investigation into the matter. Following an appeal by Norgesgruppen to the Competition Appeals Board, the NCA repealed its own decision based on there being a lack of clarity as to the obligation on Norgesgruppen to inform the NCA of any concentrations.

Trends and ongoing investigations

The NCA currently have ongoing investigations into an industry association, in the grocery market, in the book market and in a digital market. Several of these cases concern exchange of information and may be considered to be outside the core area of what traditionally has been considered to constitute competitive sensitive information. Pursuant to a recent judgment from the Supreme Court (HR-2021-1086-A), any exchange of information between competitors that removes uncertainty with regard to the functioning of a market constitutes a restriction of competition by object.

The Norwegian grocery sector has been subject to particular scrutiny by the NCA over several years. Recently, the NCA have also stated that digital markets are a priority area. The latter is part of a larger European trend and has also been the subject of a report on the use of algorithms, written in collaboration with other Nordic competition authorities. Further scrutiny and investigations in these markets is expected in the years to come. 


Withholding tax on interest and royalties

Interest, royalties and certain lease payments made to related companies resident in low-tax jurisdictions will become subject to Norwegian withholding tax from 1 July 2021. Withholding tax on lease payments will enter into force from 1 October 2021. The general withholding tax rate will be 15%, but may be reduced under applicable tax treaties. The withholding tax is limited to interest, royalties and lease payments to corporate taxpayers, which entails that personal foreign recipients will not be subject to withholding tax.

The lease payments comprised by the new rules include those for ships, vessels, rigs, aircrafts and helicopters.

A company that is directly or indirectly owned or controlled by another company (with at least a 50% share) will be considered as a "related party" for the purposes of the new rules. Low-tax jurisdictions are defined as jurisdictions where the general income tax on the company's total profit is less than two-thirds of the tax which the company would have been subject to if it was resident in Norway for tax purposes. It is the effective tax that is decisive in this assessment, not the nominal tax rate.

Payments to low-tax jurisdictions within the EEA will be exempt from withholding tax on interest and royalties provided that the recipient is established in an EEA jurisdiction, meets Norwegian substance requirements and is considered the beneficial owner of the payment.

Concluding Note

The information herein is of a general, informational nature and was last updated on 23 June 2021. The content does not purport to be exhaustive and should not be relied upon as a substitute or replacement for individual legal advice on any specific matter. Any specific legal questions should be addressed to one of our lawyers. 

Advokatfirmaet Thommessen AS

Haakon VIIs gate 1
0161 Oslo

+47 23 11 11 11
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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 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).

Trends and Development


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 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).

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