Successfully investing in Norway

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published on 24. May 2022 | reading time approx. 3 minutes


 

 

How do you assess the current economic situation in Norway?

Norway has made it through the Corona pandemic rather well. In 2020, Norway experienced a slight decrease in GDP of 0.7 percent. In 2021 the GDP rose 3.9 percent and the country is now registering rapid, post-pandemic growth. The employment level rose above the pre-pandemic level already in the autumn of 2021.


The most recent global event that also affects Norway is the Russian invasion of Ukraine. It has undoubtedly led to an increased uncertainty with regard to the impact on the global economy. Norway has imposed the same sanctions as the EU. Although the Norwegian national economy is to some extent secured by an increase in energy prices, closely linked to oil & gas as it is, rising commodity prices and supply chain issues are leading to higher prices on goods and services. Like many other countries, Norway is facing high inflation, driven to a large extent by energy prices and global insecurity.


However, the pandemic has shown that the Norwegian economy is a stable and resilient one, able to handle an unexpected, global crisis. The latest forecast from the Central Bank of Norway is projecting a continued growth in the Norwegian economy. The policy rate is now 0.75 percent, and the Central Bank of Norway has projected that the policy rate will reach 2.5 percent by the end of 2023.


How would you describe the investment climate in Norway? Which sectors offer the largest potential?

In a situation of increasing global instability, the Norwegian investment climate represents a stimulus for stability and forecasts continued growth.


Ranking 1st place in The Economist's Democracy Index and rating top 10 in rankings such as business resilience, global talents and environmental performance show that the conditions for investing in Norway are well in place.


The global transition from oil to renewable energy sources is also prompting Norway to invest more in energy sectors such as hydropower and offshore wind. Norway already produces a substantial amount of its onshore energy consumption through renewable energy sources, and energy-intensive sectors such as battery production and data centres are already entering the Norwegian market.


What challenges do German companies face in their business engagements in Norway?

Norway is connected to the European market through the EEA agreement, but Norway is not a member of the EU. Based on our experience, German companies will be confronted with numerous requirements in regard to registration and reporting procedures when entering the Norwegian market.


All foreign contractors sending workers and/or subcontractors to Norway are obliged to register in the Assignment and Employee Register.


Furthermore, salary reporting is mandatory in Norway from day one, regardless of both the employer's and the employee's tax liability.


Like the Danish labour market, the Norwegian labour market is characterised by a flat hierarchy and high degree of flexibility. The labour legislation ensures the employees' working environment, protection from dismissal, especially relating to circumstances such as pregnancy, age, or sickness, etc.


In your opinion, how will Norway develop?

Norway has historically experienced stable and continuous growth. We believe that the Norwegian economy will continue this positive development.


However, Norway needs to transition toward an economy less dependent on oil and gas. We have many resources to adapt but Norway is a small nation and needs to attract foreign investors and facilitate the necessary investment possibilities that are available.


We are positive about the continued growth of the Norwegian economy and believe that Norway will offer interesting investment opportunities for foreign companies within many sectors, especially those looking for a greener and more sustainable footprint.

Contact

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Johan S. Seland

Attorney at Law (Norway)

Partner

+47 2240 38 00

Send inquiry

Contact Person Picture

Jens-Christian Pastille

Attorney at Law (Berlin, Riga)

Partner

+371 6733 8125
+371 6733 8126

Send inquiry

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