Doing Business In... 2022

Last Updated July 12, 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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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 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).

Corporate & M&A

The activity within private M&A has been at a record high in the second half of 2021 and the first quarter of 2022, despite the slowdown in the Norwegian capital markets. The deal volume so far in 2022 is up compared to 2021, but with a larger number of small and midcap M&A transactions and fewer major M&A transactions. Given the development of the capital markets during April and May 2022, there is reason to believe that public M&A activity may slow down in the Norwegian market during the remainder of 2022. However, private M&A is still expected to be rather robust and with a high level of activity.

For the right companies, a listing on Euronext Growth Oslo remains an option, despite challenging capital markets. 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 six to ten weeks. The admission process towards the stock exchange, meaning the time between application and admission, is three weeks.

In 2022, the "digital deal" trend has continued. 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 digital meetings or by simply exchanging documents via email.

The energy sector in Norway is key to the local 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 2022. This provides for increased activity within oil and gas in the shorter term. After the outbreak of war in Ukraine, energy supply and energy security is high on the agenda. Companies within E&P and oil service has performed well during the spring of 2022, and has helped Oslo Stock Exchange to be one of the better performing European exchanges during a challenging period globally in the capital markets.

In short, there are two megatrends within energy that drives activity, both the short-term need for a safe energy supply of oil and gas to Europe, and also the transition to sustainable energy sources, being the basis for quite a few investments and transactions. On 8 April 2022, the current government published its supplementary paper to the previous government's White Paper from June 2021 related to offshore wind. In the paper, the government sets out its ambitions for the renewable energy sector in the years to come. On 11 May 2022, these ambitions was specified to provide areas offshore allowing for a total production of 30,000 MW by 2040.

In the last few years, the capital markets have identified a new category called "growth equity". This is a category between venture capital and private equity. PE funds, scale-up funds and family offices are potential takers in the Norwegian growth equity space. These funds continued to raise increasing amounts of capital in 2021 and so far in 2022.

During 2022, a key feature of public M&A is expected to be public-to-private transactions. Listed companies with upcoming financing needs and falling stock prices may be subject to takeovers in the current market in Norway.

In terms of legal developments, on 8 April 2022 the Finance Ministry submitted a proposal to change the flag rules that apply to issuers of shares and equity certificates on the Oslo Stock Exchange and Euronext Expand. The proposed changes are expected to be implemented in Norwegian law during the autumn of 2022 or on 1 January 2023, and are of great importance to holders of shares and equity certificates. Some of the changes are:

  • derivatives with listed shares will be subject to flagging, even if they only give the right to financial settlement;
  • pre-emptive rights and ordinary convertible loans will no longer be flaggable rights and will not be included in investors' holdings;
  • an extended flag deadline for investors with a legitimate reason; and
  • lending will be subject to flagging, in the same way as borrowing and repayment.

In relation to insider trading rules, the Supreme Court handed down a judgment in April 2022 (HR-2022-695-A) concluding that the probability threshold for information on the potential occurrence of a future event to constitute insider information is "close to a balance of probabilities, but somewhat lower". There is an ongoing debate on whether the judgment entails a change to existing practice, where many believe that the previous practice required a preponderance of probabilities, and, hence, that the new finding and description of the threshold to apply leaves uncertainty for issuers of listed financial instruments and for other market participants.


Post-COVID-19 – return to the office

During the COVID-19 pandemic, a large number of Norwegian employees worked from home due to restrictions and recommendations from the Norwegian government. The lifting of such restrictions has led to several questions regarding flexible working arrangements, such as whether employers are entitled to instruct employees to return to the office.

As a starting point, employees will both be obliged to and have a right to return to their ordinary place of work as stipulated in the employment contract. This means that employers may instruct employees to work from the office as part of their managerial prerogative as long as such workplace is included in the employment contract.

However, despite these legal considerations, we see an increasing trend towards employers offering employees the opportunity to work from home to a greater extent than before the pandemic. Typically, employers offer flexible working hours by giving employees the option of working from home for one to three days per week. 

Provisions on this are included in the regulation on working from home. According to the current regulation, employers have to enter into a written agreement with the employee if the employee is to work from home over a period of time. On 1 July 2022, minor changes to the regulations on working from home will enter into force. These changes will affect the scope of the regulations as the regulations will no longer apply to momentary or incidental work from home. This means that a written home office agreement will not be a requirement for sporadic use of one's home office. Additionally, there will be no requirement to enter into a written home office agreement with employees if home office work is required or recommended by the Norwegian government. In such cases, the only legal requirement is that the employer's consults with employee representatives regarding the use of the home office.

New restrictions on temporary employment and hire-in of employees from staffing agencies

The Norwegian Labour Party won the election in Norway in September 2021 and there was a change in government on 14 October 2021. The new government has proposed several legislative initiatives to strengthen the rights of employees, including restrictions on employers' ability to temporarily employ workers and hire-in workers from staffing agencies. We see a clear trend towards strengthening the employee's right to permanent employment, and we expect there to be quite a few amendments made to the Norwegian Employment Act during the next three to four years.

According to the Norwegian Working Environment Act, the main rule is that employees shall be permanently employed. Temporary employments and hiring-in of employees from temporary work agencies require a specific legal basis. Under the current legislation, one legal basis for temporary employment is that it may be entered into for a maximum period of 12 months. On 1 July 2022, this basis for temporary employment will cease.

When it comes to hiring-in employees from temporary work agencies, the government has proposed the following amendments.

  • The right to hire-in workers for work of a "temporary nature" will be removed. This means that there will no longer be a legal basis for hiring workers from temporary work agencies on projects of a temporary nature unless such worker is a deputy.
  • The hired worker will have a right to be permanently employed with the hirer after two years of continuous hire-in from a temporary work agency.
  • Provisions containing assessment criteria for what constitutes "hire-in" will be included in the Norwegian Working Environment Act.
  • An approval scheme for temporary work agencies.
  • The right to be permanently employed with the hirer if the temporary work agency is not approved.
  • Collective right of action for unions in the event of illegal hiring from temporary work agencies.

We are expecting a resolution to be made in autumn 2022.


Norway had a change of government in the autumn of 2021, from a centre-right government to a centre-left government. So far this has not resulted in major changes in the tax area, even though the marginal tax rates have been slightly increased in the area of personal taxation, including wealth tax, income tax and dividend distributions. The corporate tax level, however, remains unchanged for the time being.

The government has appointed an expert committee to look at the Norwegian tax system as whole, which may lead to changes in the longer term. Among the areas the expert committee will look closer at are the participation exemption rules, in which corporate shareholders generally are tax exempt on dividends received, and on capital gains in other corporate entities. However, we do not expect any major changes here in the short term.

Although no major general changes to the tax area have been announced, several consultation paper setting out proposed changes have been presented. The changes will particularly affect certain industries, as set out below.

Proposed changes to the Norwegian Petroleum Tax Regime

The government has introduced amendments to the Norwegian Petroleum Tax Regime, shifting to a neutral cash-based tax system.

The Petroleum Tax Regime currently consists of two components. A profit tax of 22%, which is levied on all industries, and a special tax for petroleum companies of 56% – ie, an effective tax rate of 78%. The special tax is a form of natural resource tax. Natural resource taxes are levied on specific industries that extract valuable natural resources.

With the new amendments, the current Petroleum Tax Regime has been converted to a cash-based tax regime. In essence, this entails that the qualifying companies can deduct the entire investment cost when incurred, as opposed to a profit tax where the investment cost is deducted over time through depreciation. The cash-based tax regime is considered neutral, as it should not affect economic decisions. However, the new tax regime may increase the tax risks involved for petroleum companies in general. The amendments were adopted in June 2022 with effect from 1 January 2022.

Proposed changes to Norwegian Tonnage Tax Regime

The Ministry of Finance submitted a consultation paper for proposed changes to the Norwegian Tonnage Tax Regime on 24 September 2021. The stated purpose is to add more flexibility to the system. To qualify for the current Norwegian Tonnage Tax System, a company may not conduct business other than the chartering and operation of its own and chartered vessels or of auxiliary vessels. In the proposed changes, companies within the Norwegian Tonnage Tax Regime may also provide other activities (shared activities). The activities that do not qualify for the shipping tax system will be taxed as ordinary income. The changes will reduce the risk of disqualification from the Tonnage Tax Regime, causing an involuntary exit. If adopted, we expect the changes to have effect from 1 January 2022.

Simplifications within cross-border transactions

On 22 September 2021, The Ministry of Finance also published a consultation paper proposing amendments to the Norwegian tax rules on cross-border mergers, demergers and share exchanges.

Under the current rules, Norwegian tax rules require that other jurisdictions have similar rules to Norway regarding tax continuity for certain cross-border transactions to be tax exempt. This has led to challenges where the other jurisdictions have different tax rules regarding cross-border transactions. In such situations, it has been unclear whether the transaction can be carried out without immediate taxation, and extensive clarifications by the authorities have often been necessary. In the paper, the government has proposed to remove the condition of tax continuity abroad, making it easier to implement tax-neutral cross-border mergers, demergers and share exchanges where Norwegian companies are involved.

Provided the amendments are adopted, we expect the changes to have effect from 1 January 2022.

Competition Law

In 2021, the Norwegian Competition Authority (NCA) received 156 merger notifications, which is a surge from 2020 (93 notifications). The NCA intervened against two mergers, and cleared one of these with structural remedies. In the other case, the NCA's prohibition was later overturned by the Competition Appeal Tribunal. With regard to cartel cases, the NCA conducted eight dawn raids in relation to two separate cases.

Areas of particular interest to the NCA

The NCA has, in its enforcement practice over the last couple of years, shown a particular interest in exchanges of information between competitors. The NCA has, backed by the Supreme Court, taken a strict approach and considers most types of information exchange to constitute a restriction of competition by object.

The NCA has also expressed a particular interest in digital markets and algorithms. In February 2021, the NCA released a report on the effects that the increased use of monitoring and pricing algorithms by Norwegian retailers may have on competition, warning that the use of algorithms might constitute an infringement of the Competition Act. Hence, the NCA encouraged businesses to be conscious of why they implement a given algorithm, particularly in concentrated markets conducive to co-ordination.

In addition, the NCA has devoted much attention to the grocery market for many years, as it considers it to be concentrated at the wholesale and retail levels. This have most recently been followed by a push by the national Parliament, instructing the Ministry of Trade, Industry and Fisheries and the NCA to consider alternative ways of regulating price differences on the wholesale level.

Recent developments

First, the NCA has a stated goal of “enlarging the toolbox‟ in the face of potential breaches to the Competition Act, meaning that the NCA would like to apply a broader range of applicable remedies. This entails, inter alia, a greater focus on leniency and an increased focus on the use of criminal sanctions against individuals.

Second, the NCA has generally raised the level of fines imposed upon undertakings in recent years. This is evident from the fine imposed on Verisure and Sector Alarm at a total of NOK1,233 billion, and a Statement of Objection concerning a potential fine of NOK21 billion in total for the alleged collusion in the grocery sector illustrates this further; the latter is particularly high, even in a European context. The NCA has stated that a high level of fines is important to achieve the desired deterrent effect.

Third, with regard to the Commission's work on collective bargaining agreements in the digital economy, the NCA has announced that they will not prioritise cases that may be covered by the draft guidelines on the application of EU competition law to collective agreements until these guidelines are final.

Fourth, the NCA continue to keep its investigative activities high, and currently has seven active investigations, where two have so far been initiated in 2022, and six of those concern potential infringements of Section 10 of the Norwegian Competition Act (equivalent to TFEU Article 101).

Data Protection

Data protection continues to be a focus area of private businesses and the public sector in Norway in 2022. The first years after the birth of the new Norwegian personal data act (implementing the GDPR) in 2018 were characterised by an increase in awareness concerning the significance of the GDPR (and the potential implications of non-compliance) among the general public. The latest years have seen businesses focusing on implementing and further developing policies and procedures to ensure day-to-day compliance – with privacy by design, data protection impact assessments (DPIAs) and recurring compliance audits increasingly becoming a part of businesses' routines. 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) in Norway.

Regulatory enforcement

The latter half of 2021 and the first half of 2022 have continued the trend of increased data protection enforcement by Datatilsynet. While no fines notified or imposed in this period have been as large as last year's record-breaking NOK65 million fine imposed on the company behind the dating app Grindr, Datatilsynet has seemingly maintained focus on high-profile cases aimed at domestic and international entities, both in relation to fines and other enforcement actions, as well as with respect to variety in the nature of the GDPR breaches targeted.

Noteworthy cases include fines of NOK2 million and NOK5 million notified against, respectively, the Norwegian Parliament in February 2022 and customer-reward club operator Trumf in December of 2021 for failure to establish an adequate level of information security in accordance with Article 32 GDPR. The fine against the Norwegian Parliament was notified in the wake of data breaches which occurred in 2020, while Trumf was fined primarily due to a vulnerability which allowed members to register other persons' bank account numbers on their member profiles, which in turn enabled them to monitor the shopping history of these persons without their knowledge. Also of note is the fine of NOK5 million imposed on the Norwegian toll booth operator Ferde AS in September of 2021 for transferring personal data on Norwegian persons to a Chinese supplier in breach of the GDPR.

In terms of other high-profile enforcement actions, in January 2022 Datatilsynet announced an audit of Telenor's (Norway's dominant telecommunications company) compliance management in relation to its processing of personal data. Additionally, in August 2021, Datatilsynet announced an investigation into consumer genealogy company MyHeritage, based on a report from the Norwegian Consumer Council alleging that the information which consumers receive regarding MyHeritage's processing of DNA and other personal data is complex, vague and inadequate in light of the requirements pursuant to the GDPR.

As a final note: in last year's edition of this guide, we suggested that the increase in size and frequency of Datatilsynet's enforcement actions may result in an increase in its decisions being appealed to the Norwegian Privacy Appeals Board (Personvernnemnda). We may see the beginning of such a trend in 2022, with Grindr now having lodged an appeal against its aforementioned record-breaking fine; at the time of writing, this is still pending.

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 its Norwegian customers, who are now facing what are clearly stricter requirements when it comes to undertaking data transfer adequacy assessments before relying on Standard Contractual Clauses (SCCs) and Binding Corporate Rules as a basis for cross-border data transfers to third countries. With a UK adequacy decision now in place, 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 latest EDPB recommendations on supplementary measures. However, it is clear that there is still 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 reporting awareness.

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 and cyber-assurance. In the last 12 months, the focus has been drawn towards ransomware attacks, a focus which has been spurred by several high-profile attacks against large enterprises in the private sector.

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 various increasingly sophisticated methods. 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 how best to co-ordinate between the company's legal and technical advisors.

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. Of particular interest is how, and to which extent, Datatilsynet and its European peers will enforce complex rules relating to significant tools and activities within the digital ecosystem, such as use of cookies and data transfers to US cloud providers. Also of interest, going forward, is 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

Amendments to the Norwegian Customs Act

Over the last couple of years, Norwegian Customs has seen an increase in the import of counterfeited goods, especially related to personal protective equipment in the context of the COVID-19 pandemic. To strengthen the measures to combat this trend, amendments to the Norwegian Customs Act entered into force on 1 July 2021. Among the most significant amendments are the following.

  • To detain goods that are under importation from release, it is now sufficient to prove that either the sender or the recipient of the counterfeited goods has acted on a commercial scale. Previously, suspension from release could only be decided when the recipient acted on a commercial scale. 
  • Suspension of release can also be decided for counterfeit goods that are in transit. Previously, suspension of release could only be decided for goods under importation or exportation.
  • A new procedure, where it is possible to apply directly to Customs for assistance for the detention of goods suspected of infringing intellectual property rights, is introduced. Previously, the right-holder had to involve the courts to obtain a decision with the effect that Customs should suspend the release of suspected infringing goods.
  • The new Act contains a simplified procedure for the destruction of goods and small consignments, respectively. According to this simplified procedure, goods can be destroyed without explicit consent from the importer.

Amendments to the Norwegian Trade Marks Act

The Norwegian Trade Marks Act has been amended to implement the Trade Marks Directive (EU) 2015/2436. The amendments have been delayed, as the decision of the EEA Committee to incorporate the Trade Marks Directive (2015/2436) into the Trade Marks Act has not yet entered into force. The amendments will entail a modernisation (eg, 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 will most likely enter into force during the winter of 2023.

New decision from the Supreme Court of Norway regarding trade mark law and marketing law

A question that has been frequently discussed in Norway over the past years is whether the Norwegian Marketing Control Act may supplement the Norwegian Trade Mark Act – eg, whether a trade mark that does not constitute trade mark infringement may violate the rules in the Marketing Control Act on passing off. In December 2021, the Supreme Court handed down a judgment (Bank Norwegian-case (HR-2021-2479-A)) addressing the question. The decision relates to whether it is permissible to use a competitor's trade mark as a paid keyword in search engine advertising online.

Bank Norwegian, a digital bank, has purchased competitors' trade marks and company names as Google keywords. Three competing banks filed a lawsuit against Bank Norwegian, claiming that this practice was in breach of the Marketing Control Act and the Trade Mark Act.

The Supreme Court concluded that there was no basis for banning Bank Norwegian's advertising practice. To use a competitor's sign as a paid keyword in search engine advertising did not constitute a trade mark infringement and was not in conflict with good business practice. Further, the Supreme Court concluded that it could not be ruled out that the Marketing Control Act may supplement the Trade Marks Act under other circumstances.

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 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).

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 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).

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