Norway: Investing

FDI in Figures

Norway encourages foreign investment and the investment climate is very positive. After a slowdown during the global recession, FDI inflows picked up again in 2010, a trend that is expected to continue. American and Dutch oil companies (Exxon-Mobil, Texaco, Royal Dutch Shell) have made significant investments in Norway. In general, the industries that attract the most FDI are oil, gas, manufacturing, retail, wholesale, and banking. Even though Norway has a narrow domestic market, the country possesses several assets such as its geographical location in a fertile region, its favored ties with the United States, a skilled and multilingual population, a modern economy, and rich energy resources.

Foreign Direct Investment	2008	2009	2010
FDI Inward Flow (million USD)	7,981	14,074	11,857
FDI Stock (million USD)	109,432	147,108	171,833
Performance Index*, Ranking on 141 Economies	110	86	-
Potential Index**, Ranking on 141 Economies	12	-	-
Number of Greenfield Investments***	45	30	-
FDI Inwards (in % of GFCF****)	8.3	11.8	-
FDI Stock (in % of GDP)	24.3	30.4	-

Source: UNCTAD - Last Available Data.

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

FDI Inflows By Countries and Industry

Main Investing Countries	2008, in %
Sweden	15.1
United States	10.3
Netherlands	9.5
United Kingdom	9.0
Denmark	6.2
France	5.5
Germany	5.3

Main Invested Sectors	2008, in %
Mining and quarrying	28.5
Financial intermediation and insurance, real estate and commercial services	24.3
Manufacturing	18.7
Transportation and communications	8.6
Wholesale, retail, hotels and restaurants	6.5

Source: Statistics Norway - Last Available Data.

Form of Company Preferred By Foreign Investors: Foreign investors can operate through a branch office or through a separate entity. Limited companies (public and private) and partnerships can be used.
Form of Establishment Preferred By Foreign Investors: The most common form of doing business for a foreign investor in Norway is a branch office or an incorporated subsidiary.
Main Foreign Companies: ExxonMobil, Royal Dutch Shell, BP Amoco, Total, ConocoPhillips, Chevron, Marathon, Halliburton, General Electric.
Sources of Statistics: Statistics Norway

Why You Should Choose to Invest in Norway

Strong Points: Norway has a very strong economy and positive prospects. The country is a world leader in information, with a both stable and transparent political environment. Norway has a well organized public sector and quality infrastructures. The population enjoys a high purchasing power and the business environment is stable and investments on the increase (even though dominated by the energy sector). Norway has a highly skilled labor force, which means there is great growth potential in services and knowledge based industries, such as information and communications technologies.
The best business opportunities are consumer goods, information and communications technologies, construction and corporate services.
Numerous contracts are awarded in Norwegian oil and gas projects. The domestic market is limited, but Norway can be an attractive business base for market operations in the Nordic countries, Baltic countries and Western Russia.
Weak Points: Norway's economy is dependent on the price of oil. Norway is already past the peak of its oil production.
The fact of the geographical isolation of some parts of the country, the expenses in the areas of transport, logistics, and telecommunication infrastructures are very high.
Lastly, the country has implemented relatively strict laws in the area of employment. The country also has extremely high salary costs.
Government Measures to Motivate or Restrict FDI: The government maintains an open position towards foreign investment in Norway. Norway offers no significant tax incentives for investors (whether foreign or domestic). Some benefits such as lower social security payments, lower tax rates and extra deductions for individuals, apply to investments made in the less populated areas in the north of Norway. Some existing regulations, standards and practices may marginally favor Norwegian, Scandinavian or EEA investors.

Innovation Norway is a government agency designed to assist businesses by offering financing through Norwegian Industrial and Research Development Contracts.

Special restrictions apply in the following sectors:
- Acquisition of waterfalls, power supply rights and mining rights;
- Acquisition of land, real estate and long term leases;
- Acquisition of farmland and forests;
- The purchase of over 10 % of the capital stock of a Norwegian financial institution;
- Direct investments in petroleum exploration and exploitation are subject to a government license.

Regarding the financial crisis, fiscal policy has been very strong so far. However, because of the the losses suffered by the pension fund in 2009, the government remains cautious.

Protection of Foreign Investment

Bilateral Investment Conventions Signed By Norway: Norway has signed bilateral investment treaties with several countries. A list can be found here.
International Controversies Registered By UNCTAD: Norway has not been involved in any case of disagreement concerning foreign investment up to now.
Organizations Offering Their Assistance in Case of Disagreement: ICCWBO , International court of arbitration, International chamber of commerce
Oslo Handelskammer , The arbitration and dispute resolution Institute of the Oslo chamber of commerce
ICSID , International Center for settlement of Investment Disputes
Member of the Multilateral Investment Guarantee Agency: Yes.

Country Comparison For the Protection of Investors

	Norway	OECD	الولايات المتحدة	Germany
Index of Transaction Transparency*	7.0	6.0	7.0	5.0
Index of Manager’s Responsibility**	6.0	5.2	9.0	5.0
Index of Shareholders’ Power***	7.0	6.8	9.0	5.0
Index of Investor Protection****	6.7	6.0	8.3	5.0

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

Procedures Relative to Foreign Investment

Freedom of Establishment: Guaranteed.
Acquisition of Holdings: A majority holding in a Norwegian company is legal.
Obligation to Declare: No specific text of law regulates foreign direct investments.
Competent Organization For the Declaration: Ministry of Finance
Ministry of Trade and Industry
Requests For Specific Authorizations: Following sectors require specific authorization:
- Acquisition of waterfalls, power supply rights and mining rights.
- Acquisition of land, real estate and long term leases.
- Acquisition of farmland and forests
- Purchasing over 10 % of the share capital of a Norwegian financial institution.
- Direct investments in petroleum exploration and exploitation are subject to a government licence

If an investment requires a permit, the applicant should contact the Ministry of Trade and Industry.

Office Real Estate and Land Ownership

Possible Temporary Solutions: Foreign companies don't have to seek concessions to rent real estate (commercial facilities, office space) if the rental period is under 10 years.
The Possibility of Buying Land and Industrial and Commercial Buildings: Generally it's possible for foreign investors to own real property, though ownership of certain real assets is restricted. Acquisition of real estate and land are subject to The Concession Act. These regulations apply when buying real estate or companies that hold real estate (or long term leases).
Risk of Expropriation: No cases of questionable expropriation. Expropriation is governed by The Land Act.

Investment Aid

Forms of Aid: No significant forms of investment aid. There are some exceptions for the sparsely populated areas of northern Norway.
Privileged Domains: No.
Privileged Geographical Zones: Minimal taxation in the Svalbard archipelago and lower social security payments, lower tax rates and extra deductions in the sparsely populated areas of northern Norway.
Free Zones: None.
Organizations Which Finance: The Nordic Investment Bank, the Nordic Industrial Fund, the Nordic Environment Finance Cooperation. More information can be found at Bedin.no under the topic "Financing".

Investment Opportunities

The Key Sectors of the National Economy: Petroleum and gas, food processing, offshore industry, fishing, shipbuilding, metals and mechanical engineering.
High Potential Sectors: Oil and gas field machinery/equipment and services, telecommunications, shipping and maritime equipment and services, renewable energy, environmental technology, medical equipment and supplies, security equipment.
Privatization Programs: Government ownership is freezed at current levels.
Tenders, Projects and Public Procurement: Ehandel, Public Procurement portal
Tenders Info, Tenders in Norway
Ted - Tenders Electronic daily, Business opportunities in EU 27
DgMarket, Tenders Worldwide

Sectors Where Investment Opportunities Are Fewer

Monopolistic Sectors: Postal services, railways, domestic production and retail sale of alcohol.
Sectors in Decline: None in particular.

Finding Assistance For Further Information

Investment Aid Agency: Information about financing and support is available at Bedin.no
Other Useful Resources: Oslo Chamber of Commerce
Innovation Norway
Kvasir Business Search Engine (in Norwegian).
Nortrade - Official Norwegian Trade Portal
Business Guide to Oslo Region
Norway.com Business Center
Doing Business Guides: Bedin.no
Innovation Norway
Norway Commercial Guide 2010 - Buy USA

Any Comments About This Content? Report It to Us.

Learn more about Investing in Norway on Globaltrade.net, the Directory for International Trade Service Providers.