HomeReportsBureau of Economic and Business Affairs2020 Investment Climate Statements…Norway

# 					2020 Investment Climate Statements: Norway			

 In this section										/

													EXECUTIVE SUMMARY											

                -  EXECUTIVE SUMMARY 
                -  1. Openness To, and Restrictions Upon, Foreign Investment   
                -  2. Bilateral Investment Agreements and Taxation Treaties   
                -  3. Legal Regime   
                -  4. Industrial Policies   
                -  5. Protection of Property Rights   
                -  6. Financial Sector   
                -  7. State-Owned Enterprises   
                -  8. Responsible Business Conduct   
                -  9. Corruption   
                -  10. Political and Security Environment   
                -  11. Labor Policies and Practices   
                -  12. U.S. International Development Finance Corporation (DFC) and Other Investment Insurance Programs   
                -  13. Foreign Direct Investment and Foreign Portfolio Investment Statistics   
                -  14. Contact for More Information   

## EXECUTIVE SUMMARY

Norway is a modern, highly developed country with a small but very strong economy. Per capita GDP is among the highest in the world, boosted by decades of success in the oil and gas sector and other world-class industries like shipping, shipbuilding and aquaculture. The major industries are supported by a strong and growing professional services industry (finance, ICT, legal), and there are emerging opportunities in fintech, cleantech, medtech and biotechnology. Strong collaboration between industry and research institutions attracts international R&D activity and funding. Norwegian lawmakers and businesses welcome foreign investment as a matter of policy. Norway is a safe and straightforward place to do business, ranked 9 out of 190 countries in the World Bank’s 2019 Doing Business Index, and 7 out of 180 on Transparency International’s 2019 Corruption Perceptions Index. Norway is politically stable, with strong property rights protection and an effective legal system. Productivity is significantly higher than the EU average.

A new National Security Act that entered into force January 1, 2019, provides the legal foundations for enhanced government screening of foreign investments. Implementing regulations for the Act are under development, including a comprehensive list of the critical infrastructure, entities, and products to be covered by the legislation and by subsequent investment screening procedures.

While not a member of the European Union (EU), Norway is a member of the European Economic Area (EEA; including Iceland and Liechtenstein) with access to the EU single market’s movement of persons, goods, services and capital. The Government of Norway(GON) continues to liberalize its foreign investment legislation with the aim of conforming more closely to EU standards and has cut bureaucratic regulations over the last decade to make investment easier. Foreign direct investment in Norway stood at USD 140 billion at the end of 2018 and has more than doubled over the last decade. There are about 7,395 foreign-owned companies in Norway, and over 700 U.S. companies have a presence in the country, employing more than 45,000 people.

GON initiated a tax reform in 2016, gradually reducing the income and corporate tax rates from 28 percent to 22 percent in 2019.

Foreign banks have been permitted to establish branches in Norway since 1996.  The Ministry of Finance reduced the requirement for banks’ countercyclical capital buffer from 2.5% to 1% on March 12, 2020 as part of the government’s economic response to COVID-19.  This lower capital requirement is expected to help banks provide more liquidity to struggling businesses.

The French Credit Insurer COFACE signed an agreement to acquire the Norwegian Guarantee Institute for Export Credits (GIEK), the central governmental agency responsible for issuing export credits and investment guarantees, in February 2020. GIEK’s primary function is to promote export of Norwegian goods and services, and Norwegian investment abroad. It underwrites exports to over 150 countries of all types of goods and services.

							1. Openness To, and Restrictions Upon, Foreign Investment					

**Policies Towards Foreign Direct Investment**

Norwegian lawmakers and businesses welcome foreign investment as a matter of policy and the government generally grants national treatment to foreign investors. The Government established “Invest in Norway,” an official investment promotion agency, to help attract and assist foreign investors, including in the key offshore energy sector and in less developed regions such as northern Norway.

While not a member of the European Union, Norway is an EEA signatory and continues to liberalize its foreign investment legislation to conform more closely to EU standards. Current laws, rules, and practices follow below.

**Limits on Foreign Control and Right to Private Ownership and Establishment**

Norway’s investment policies vis-á-vis third countries, including the United States, will likely continue to be governed by reciprocity principles and by bilateral and international agreements. The European Economic Area (EEA) free trade accord, which came into force for Norway in 1995, requires the country to apply principles of national treatment to EU members and the other EEA members – Iceland and Liechtenstein – in certain areas where foreign investment was prohibited or restricted in the past. Norway’s investment regime is generally based on the national treatment principle, but ownership restrictions exist on some natural resources and on some activities (fishing/ maritime/ road transport). State ownership in companies can be used as a means of ensuring Norwegian ownership and domicile for these firms.

Government Monopolies

Norway has traditionally barred foreign and domestic investors alike from investing in certain industries, including postal services, railways, and the retail sale of alcohol. In 2004, Norway slightly relaxed the restrictions, allowing foreign companies to bid on certain commercial postal services (e.g., air express services between countries) and railway cargo services (notably between Norway and Sweden). In 2016, the government initiated a reform of the railway sector leading to the first railway line opening for competition in 2018 and contracts being awarded to British and Swedish operators. The government has a mandate to allow foreign investment in hydropower (limited to 20 percent of equity), but rarely does so. However, the government has fully opened the electricity distribution system to foreign participation, making it one of the most liberalized power sectors in the world.

Ownership of Real Property

Foreign investors may generally own real property, though ownership of certain real assets is restricted. Companies must obtain a concession to acquire rights to own or use various kinds of real property, including forests, mines, tilled land, and waterfalls. Foreign companies need not seek concessions to rent real estate, e.g. commercial facilities or office space, provided the rental contract period does not exceed ten years. The two major laws governing concessions are the Act of December 14, 1917, and the Act of May 31, 1974.

Petroleum Sector

The Petroleum Act of November 1996 (superseding the 1985 Petroleum Act) sets forth the legal basis for Norwegian authorities’ awards of petroleum exploration rights, production blocks and follow-up activity. The Act covers governmental control over exploration, production, and transportation of petroleum.

Foreign oil companies report no discrimination in the award of petroleum exploration and development blocks in recent licensing rounds. The Norwegian government has implemented EU directives requiring equal treatment of EEA oil and gas companies. The Norwegian offshore concession system complies with EU directive 94/33/EU of May 30, 1994, which governs conditions for awards and hydrocarbon development. Norway’s concession process operates on a discretionary basis, with the Ministry of Petroleum and Energy awarding licenses based on which company or group of companies it views will be the best overall operator for a particular field, rather than purely competitive bids. A number of U.S. energy companies are present on the Norwegian Continental Shelf (NCS).

The Norwegian government has dismantled former tight controls over the gas pipeline transit network that carries gas to the European market. All gas producers and operators on the NCS are free to negotiate gas sales contracts on an individual basis, with access to the gas export pipeline network guaranteed.

Norwegian authorities encourage the use of Norwegian goods and services in the offshore petroleum sector, but do not require it. The Norwegian share of the total supply of goods and services on the NCS has remained at approximately 50 percent over the last decade.

Manufacturing Sector

Norwegian legislation granting national treatment to foreign investors in the manufacturing sector dates from 1995. Legislation was repealed in July 2002 that formerly required both foreign and Norwegian investors to notify and, in some cases, file burdensome reports to the Ministry of Industry and Trade if their holdings of a company’s equity exceeded certain threshold levels. Foreign investors are not currently required to obtain government authorization before buying shares of Norwegian corporations.

Financial and Other Services

In 2004, the Norwegian government liberalized restrictions on acquisitions of equity in Norwegian financial institutions. Current regulations delegate responsibility for acquisitions to

the Norwegian Financial Supervisory Authority and streamline the process. Financial Supervisory Authority permission is required for acquisitions of Norwegian financial institutions that exceed defined threshold levels (20, 25, 33 or 50 percent). The Authority assesses the acquisitions to ensure that prospective buyers are financially stable and that the acquisition does not unduly limit competition.

The Authority applies national treatment to foreign financial groups and institutions, but nationality restrictions still apply to banks. At least half the members of the board and half the members of the corporate assembly of a bank must be nationals and permanent residents of Norway or another EEA nation. Effective January 1, 2005, there is no ceiling on foreign equity in a Norwegian financial institution as long as the Authority has granted permission for the acquisition.

The Finance Ministry has abolished remaining restrictions on the establishment of branches by foreign financial institutions, including banks, mutual funds and others. Under the liberalized regime, Norway grants branches of U.S. and other foreign financial institutions the same treatment as domestic institutions.

Media

Media ownership is regulated by the Media Ownership Act of 1997 and the Norwegian Media Authority. No individual party, domestic or foreign, may control more than 1/3 of the national newspaper, radio and/or television markets without a concession. National treatment is granted in line with Norway’s obligations under the EEA accord. The introduction and growing importance of new media forms (including those emerging from the internet and wireless industries) has raised concerns that the existing domestic legal regime (which largely focuses on printed media) is becoming outmoded.

Investment Screening

A new National Security Act that entered into force January 1, 2019, provides the legal foundations for enhanced government screening of foreign investments. Implementing regulations for the Act are under development, including a comprehensive list of the critical infrastructure, entities, and products to be covered by the legislation and by subsequent investment screening procedures.

**Other Investment Policy Reviews**

The Organization for Economic Cooperation and Development (OECD) conducted an Economic Survey for Norway in 2018: https://www.oecd-ilibrary.org/economics/oecd-economic-surveys-norway-2018_eco_surveys-nor-2018-e

The OECD also conducted a Peer Review of Norway in 2019:  https://www.oecd.org/dac/oecd-development-co-operation-peer-reviews-norway-2019-75084277-en.htm

The World Trade Organization (WTO) conducted a Trade Policy Review for Norway in 2018: https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/TPR/S373.pdf

**Business Facilitation**

Altinn.no is a web portal that serves as a one-stop shop for establishing a company and contains the necessary forms; it also provides an electronic platform for dialogue between the business/industry sector, citizens and other stakeholders, and government agencies. The business registration processes are straight-forward, complete, and open to foreign companies. Please note, however, that registration of Norwegian Registered Foreign Business Enterprises (NUF) cannot be done electronically. A guide for establishing a business is available at the following address: https://www.altinn.no/en/start-and-run-business/

**Outward Investment**

The government does not directly incentivize outward investment. However, the GON acknowledges that for Norwegian companies to be successful, they need to grow in markets and economies that are larger than Norway, so the trade and investment promotion agency Innovation Norway has offices in key foreign markets, including four offices in the United States:  Houston, New York City, San Francisco and Washington D.C.. Norway’s Government Pension Fund Global, the largest sovereign wealth fund in the world, owns 1.5 percent of all listed companies in the world.

							2. Bilateral Investment Agreements and Taxation Treaties					

Norway has concluded investment protection agreements with numerous countries. These agreements contain provisions for repatriation of capital, dispute settlement, and standards for expropriation and nationalization by the host country.

Norway and other members of the European Free Trade Association (EFTA) — Iceland, Liechtenstein and Switzerland — have 27 joint free trade agreements covering 40 countries that include investment protection provisions: Albania, Bosnia and Herzegovina, Canada, Central American States (Costa Rica and Panama), Chile, Colombia, Egypt, the Philippines, Georgia, Gulf Cooperation Council (GCC), Hong Kong, Israel, Jordan, Lebanon, Macedonia, Mexico, Montenegro, Morocco, the Palestinian Authority, Peru, Serbia, Singapore, Southern African Customs Union, The Republic of Korea, Tunisia, Turkey, and Ukraine. Norway also has bilateral FTAs with the Faroe Islands and Greenland. The agreements cover trade in goods and services, investment protections, dispute settlement, and other issues generally found in bilateral investment accords.

EFTA is currently negotiating FTAs with Algeria, India, Indonesia, Ecuador, Malaysia, the Eurasian Custom Union (Belarus, Kazakhstan and Russia), Thailand, Vietnam and Mercosur (Argentina, Brazil, Paraguay and Uruguay). Norway is negotiating a bilateral FTA with China.

Norway signed a bilateral taxation treaty with the United States in 1971, which can be found at: http://www.irs.gov/Businesses/International-Businesses/Norway—Tax-Treaty-Documents.

							3. Legal Regime					

**Transparency of the Regulatory System**

The transparency of Norway’s regulatory system is generally on par with that of the EU. Norway is obliged to adopt EU directives under the terms of the EEA accord in the areas of social policy, consumer protection, environment, company law, and statistics.

All draft bills are made available for comment through a public consultation process. The Norwegian parliament, the Storting, exercises legislative power in Norway and must approve all formal laws (acts, directives and regulations). Draft bills are available at: https://www.regjeringen.no/en/find-document/consultations/id1763/ Norwegian laws and regulations are available at: https://lovdata.no/info/information_in_english

Norway’s public finances and debt obligations are transparent. The Government publishes the National Budget and revised budget on the website www.statsbudsjettet.no and an annual report to Parliament on the State’s account: https://www.regjeringen.no/no/dokumenter/meld.-st.-3-20192020/id2699198/.  The Ministry of Finance has a webpage on Government debt: https://www.regjeringen.no/en/topics/the-economy/economic-policy/the-central-governments-outstanding-debt/id443404/

**International Regulatory Considerations**

Norway is a member of the European Economic Area (EEA) and as such implements applicable EU directives under the terms of the agreement.

Norway is a member of the World Trade Organization (WTO) and notifies draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT).

**Legal System and Judicial Independence**

The Norwegian legal system is similar to that of other Nordic countries, but does not consist of a single comprehensive civil code. Norwegian law is based on the principle of freedom of contract, subject only to limited restrictions. Contracts, whether oral or written, are generally binding on the parties.

**Laws and Regulations on Foreign Direct Investment**

Norway welcomes foreign investment as a matter of policy and generally grants national treatment to foreign investors. Ownership restrictions exist on some natural resources and on some activities (fishing/ maritime/ road transport).

A new National Security Act entered into force January 1, 2019 and provides the legal foundation for enhanced government screening of foreign investments based on national security concerns. Norway’s legal system is robust and trusted.

**Competition and Anti-Trust Laws**

Current legislation governing competition went into effect in 2004 and is enforced by the Norwegian Competition Authority (NCA). Under the authority of the Ministry of Trade, Industry and Fisheries the NCA is authorized to conduct non-criminal proceedings and impose fines, or “infringement fees,” for anti-competitive behavior. The size of the fees may vary according to a number of factors, including company turnover and severity of the offense. The 2004 legislation also empowers the NCA to halt mergers or acquisitions that threaten to significantly weaken competition. Companies planning such transactions are generally obliged by law to report their plans to the NCA, which may conduct a review. However, if the combined annual turnover in Norway does not exceed NOK 1 billion (USD 195 million) or the annual turnover of one of the companies NOK 100 million (USD 9.5. million), notification is not required.

Public Procurements

Pursuant to its obligations under the EEA, Norway implemented EU legislation on public procurements on January 1, 1994. Norway is also a signatory to the WTO Government Procurement Agreement (GPA). The EEA/EU legislation and WTO agreement oblige Norway to follow internationally recognized, transparent procedures for public procurements above certain threshold values.

All public procurement contracts exceeding certain threshold values must be published in the Official Journal of the European Union and in the EU’s Tenders Electronic Daily (TED) databank. Norway instituted an electronic notice database more than a decade ago and currently transmits all tender notices electronically through this database to the TED system.

The rules apply to procurement by the central government, regional or local authorities, bodies governed by public law, or associations formed by one or more such entities. In addition, special

rules apply to the procurement by certain entities in the “utilities” sectors of water, energy, transport, and telecommunications.

Public agencies must publish general annual plans for purchases of goods and services, as well as general information on any major building and construction projects planned. No later than two months after a contract has been awarded, a notice must be published stating which company won the contract. All notices must be published in an EU language.

Discriminatory technical specifications may not be used to tailor contracts for a local or national supplier. Any technical standards applied in the procurement process must be national standards that are harmonized with European standards. If no such standards exist, other international or national standards may be applied. All specifications that are to be used in evaluating tenders must be included in the notice or in the invitation to tender.

In general, public procurements are non-discriminatory and based on open, competitive bidding. There are exceptions, however, notably in defense procurements where national security concerns may be taken into account.

The Complaints Board, an independent review body, offers suppliers an inexpensive complaint process for bid challenges. The board can issue “non-binding opinions” and review the legality of the procurement in question. More serious disputes may be taken before the European Surveillance Authority (ESA), or the courts, but the decision making process can be lengthy.

**Expropriation and Compensation**

There have been no cases of questionable expropriation in recent memory. Government takings of property are generally limited to non-discriminatory land and property condemnation for public purposes (road construction, etc.). The Embassy is not aware of any cases in which compensation has not been prompt, adequate, and effective.

**Dispute Settlement**

*ICSID Convention and New York Convention*

Norway has ratified principal international agreements governing arbitration and settlement of investment disputes, including the 1958 New York Convention and the 1965 Washington Convention establishing the World Bank Group-based international center for the settlement of investment disputes (ICSID). The UN-based New York Convention requires courts of contracting states to recognize and enforce arbitration awards made in other contracting states.

*Investor-State Dispute Settlement*

Norway is party to 15 Bilateral Investment Treaties and 32 Treaties with Investment Provisions . The Embassy is not aware of any unresolved disputes between any U.S. investors and the government of Norway.

*International Commercial Arbitration and Foreign Courts*

Norway’s legal system provides effective means for enforcing property and contractual rights.

**Bankruptcy Regulations**

Norway has strong bankruptcy laws and is ranked 5 out of 190 for ease of “resolving insolvency” on the World Bank’s 2020 Doing Business Index. According to the World Bank, the average duration for bankruptcy proceedings in Norway is half that of the OECD average, at just under a year.

							4. Industrial Policies					

**Investment Incentives**

Norway’s SkatteFUNN research and development (R&D) tax incentive scheme is a government program designed to stimulate R&D in Norwegian trade and industry. Businesses and enterprises that are subject to taxation in Norway are eligible to apply for tax relief. For more information, see:  https://www.oecd.org/sti/RDTax%20Country%20Profiles%20-%20NOR.pdf

**Foreign Trade Zones/Free Ports/Trade Facilitation**

Norway has no foreign trade zones and does not contemplate establishing any.

**Performance and Data Localization Requirements**

Norway generally does not impose performance requirements on foreign investors, nor offer significant general tax incentives for either domestic or foreign investors. There is an exception, however, for investments in sparsely settled northern Norway where reduced payroll taxes and other incentives apply. There are no free-trade zones, although taxes are minimal on Svalbard, a remote Arctic archipelago which is subject to special treaty provisions but administered by Norway. A state industry and regional development fund provides support (e.g., investment grants and financial assistance) for industrial development in areas with special employment difficulties or with low levels of economic activity.

Norway does not require “forced localization” nor impose requirements on data storage.

							5. Protection of Property Rights					

**Real Property**

Norway recognizes secured interests in property, both movable and real. The system for recording interests in property is recognized and reliable. Norway maintains an open and effective legal and judicial system that protects and facilitates acquisition and disposition of rights in property, including land, buildings, and mortgages.

**Intellectual Property Rights**

Norway adheres to key international agreements for the protection of intellectual property rights (IPR) (e.g., the Paris Union Convention for the Protection of Industrial Property, the Berne Copyright Convention, the Universal Copyright Convention of 1952, and the Patent Cooperation Treaty).  As a member of the World Trade Organization (WTO), this also includes the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

The chief domestic statutes governing IPR include: the Patents Act of December 15, 1967, as amended; the Designs Act of March 14, 2003; the Copyrights Act of May 12, 1961, as amended; the Layout-design Act of June 15, 1990, as amended; the Marketing Act of January 9, 2009; and the Trademarks Act of March 26, 2010.  The above legislation also protects trade secrets and industrial designs, including semiconductor chip layout design.  As a European Economic

Area (EEA) member, Norway adopted legislation intended to implement the 2001 EU Copyright Directive, though subsequent court cases exposed shortcomings in the legislation (see below).

Patents

The patent office (Patenstyret) grants patents for a period of 20 years (Acts of June 8, 1979 and May 4, 1985).  U.S. industry has expressed concern that Norway’s regulatory framework for process patents filed prior to 1992 denies adequate patent protection for a number of pharmaceutical products.  Although Norway introduced product patents for pharmaceuticals in 1992, the old system has left a difficult legacy for pharmaceutical companies, as competitors claiming to use non-patented processes entered the market. Several U.S. pharmaceutical companies filed successful patent infringement lawsuits in Norwegian courts to fend off these new entrants, but others lost their court cases and were later forced to restructure their Norwegian operations with loss of employment.  Norway was placed on the United States Trade Representative (USTR) Special 301 Watch List in 2008 due to concerns about pharmaceutical patent protection and has not been re-listed since its removal in 2013.

Copyright

In June 2005, Norway enacted legislation based on the EU’s 2001 Copyright Directive to combat Internet piracy, but subsequent court cases showed that the law did not give sufficient grounds for enforcement.  The Government of Norway has since amended the Copyright Act, which entered into force in July 2013.  The amended Act clarifies the process for gaining access to an infringer’s identity and  provides a site-blocking mechanism.  Positive developments on the enforcement side are complemented by the growing popularity of legal streaming alternatives like Spotify, Netflix, and HBO.

Piracy

Internet piracy in Norway is facilitated by high broadband internet penetration, which makes peer-to-peer downloads of video easy and common.  Groups that release early copies of new motion pictures on the Internet are active in the Norwegian market, and Norway has experienced some “camcording incidents,” where motion pictures are illegally recorded in cinemas.  Private organizations like the Motion Picture Association are attempting to raise public awareness of Internet and video piracy, including by running anti-pirating advertisements in movie theaters.  Norway is not included in the Notorious Markets List.

Enforcement

The Norwegian government does not consider itself obligated, under the EEA Agreement, to implement the European Union Enforcement Directive.  Norway does not expressly ban imports or exports of counterfeit or pirated goods for private use or consumption.  However, import or export for resale or other commercial purpose is controlled by Norwegian Customs and rights holders are notified.  Customs may seize and hold suspected counterfeit goods for up to five working days, during which time rights-holders may decide whether to files charges or pursue a settlement.  If the rights holder does not pursue the case or respond to the notice, the goods are released to the importer unless the goods are considered harmful.  By comparison, customs officials in the EU have wider powers to seize, hold, and destroy counterfeit shipments.  In 2010, Norwegian Customs established an IPR office to coordinate training and increase awareness.  In 2015, the Norwegian government launched a new website and an awareness campaign titled “Choose the Real Deal” (velgekte.no).  Rights holders report that law enforcement authorities have begun investigating major copyright infringement cases, which has resulted in the closure of several infringing websites.  However, rights holders contend that the authorities still do not give adequate priority to copyright and Internet piracy cases.

*Resources for Rights holders*

For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/.

Norwegian Industrial Property Office: http://www.patentstyret.no/en/

A list of local lawyers is available at http://norway.usembassy.gov/lawyers.html.

							6. Financial Sector					

**Capital Markets and Portfolio Investment**

Norway has a highly-computerized banking system that provides a full range of banking services, including internet banking. There are no significant impediments to the free market-determined flow of financial resources.

Foreign and domestic investors have access to a wide variety of credit instruments. The financial regulatory system is transparent and consistent with international norms. The Oslo Stock Exchange facilitates portfolio investment and securities transactions in general.

**Money and Banking System**

Norwegian banks are generally considered to be on a sound financial footing, and the banking sector holds an estimated USD 530 billion in assets. Conservative asset/liquidity requirements limited the exposure of banks to the global financial crisis in 2008/9. The Ministry of Finance reduced the requirement for banks’ countercyclical capital buffer from 2.5% to 1% on March 12, 2020 as part of the government’s economic response to COVID-19.  This lower capital requirement is expected to help banks provide more liquidity to struggling businesses. Foreign banks have been permitted to establish branches in Norway since 1996.

**Foreign Exchange and Remittances**

*Foreign Exchange*

Norway’s currency is the Krone. Dividends, profits, interest on loans, debentures, mortgages, and repatriation of invested capital are freely and fully remissible, subject to Central Bank reporting requirements. Ordinary payments from Norway to foreign entities can normally be made without formalities through commercial banks. Norway is a member of the Financial Action Task Force.

*Remittance Policies*

See above, no restrictions.

**Sovereign Wealth Funds**

Norway’s sovereign wealth fund, the Government Pension Fund Global (GPFG), was established in 1990 and was valued at NOK 10,088 billion (USD 1.148 trillion) at year-end 2019. The management mandate requires the fund to be widely diversified, outside Norway. Petroleum revenues are invested in global stocks and bonds, and the current portfolio includes over 9,200 companies and approximately 1.5 percent of global stocks. The fund is invested across four asset classes. The fund aims to invest in most markets, countries, and currencies to achieve broad exposure to global economic growth. Close to 40 percent of the fund’s investments are in the United States, which is its single largest market. The fund tries to play an active role in its investments and aims at voting in almost all general shareholder meetings.

In 2004, Norway adopted ethical guidelines for GPFG investments that prohibit investment in companies engaged in various forms of weapons production, environmental degradation, tobacco production, human rights violations, and what it terms “other particularly serious violations of fundamental ethical norms.” In March 2019 the GON announced that companies classified by index provider FTSE Russell as being in the subsector “0533 Exploration & Production” in the sector “0001 Oil & Gas” no longer would be part of the GPFG portfolio. Current holdings in these companies will be phased out over time. More broadly-focused energy companies, which have investments in renewable and sustainable energy sources as well as oil & gas divisions, may still be included. The fund currently has over 100 companies on its exclusion list, at least 24 of which are U.S. companies. The ethical guidelines also highlight three focus areas in term of sustainability: children’s rights, climate change, and water management.

The fund adheres to the Santiago Principles and is a member of the IMF-hosted International Working Group on Sovereign Wealth Funds.

							7. State-Owned Enterprises					

The government continues to play a strong role in the Norwegian economy through its ownership or control of many of the country’s leading commercial firms. The public sector accounts for nearly 60 percent of GDP. The Norwegian government is the largest owner in Norway, with ownership stakes in a range of key sectors (e.g., energy, transportation, finance, and communications). About 70 State-Owned Enterprises (SOEs) are managed directly by the relevant government ministries, and approximately 35 percent of the stock exchange’s capitalization is in government hands. State ownership in companies can be used as a means of ensuring Norwegian ownership and domicile for these firms.

Norway is party to the Government Procurement Agreement (GPA) within the framework of the World Trade Organization (WTO) and a signatory to all relevant annexes. SOEs are thus covered under the agreement.

Successive Norwegian governments have sustained stable levels of strong, transparent, and predictable government ownership. The previous center-left government increased its stake in companies like Equinor (formerly Statoil) ASA, Kongsberg Gruppen AS, and Yara International ASA, while selling off other holdings. The current center-right government has taken some limited steps to reduce ownership stakes.

The GON publishes the annual state ownership report, available in English here: https://www.regjeringen.no/en/topics/business-and-industry/state-ownership/statens-eierberetning-2013/the-state-ownership-report/id2395364/

**Privatization Program**

Norway has no current plans to privatize any SOEs.

							8. Responsible Business Conduct					

Corporate Social Responsibility (CSR) is very much part of Norwegian corporate and political consciousness. Significant attention has been given to ethical and sustainable business practices over the last several years; the GON has issued a series of white papers, most recently in 2015, on promoting human rights through foreign policy and foreign development assistance. In 2009, a white paper laid out  responsibility of Norwegian businesses in the global economy and in 2006-2007, the GON set down guidelines for ethical and responsible conduct in state-owned enterprises, and incorporated climate policy, procurement policy, and development policy as parts of the GON’s broader CSR vision.

Norway adheres to the OECD Guidelines for Multinational Enterprises. Norway’s National Contact Point (NCP) for the OECD Guidelines raises awareness of the due diligence approach of the Guidelines and handles complaints against Norwegian businesses with international operations, in the event they are not behaving in accordance with the Guidelines. The NCP facilitates resolution of these complaints through dialogue and mediation. Kompakt is the Government’s consultative body on matters relating to CSR: https://www.regjeringen.no/en/topics/foreign-affairs/business-cooperation-abroad/innsikt/kompakt_en/id633619/

The Norwegian Accounting Act requires companies listed on the Oslo Stock Exchange to provide a report on their policies and practices for corporate governance. The Norwegian Corporate Governance Board, composed of nine independent organizations, issues and updates the Norwegian Code of Practice for the above mentioned companies. Transparency and disclosure are key to the development of corporate social responsibility. Large enterprises are required under Section 3-3c of the Accounting Act to report on their CSR activities. Public disclosure requirements are increasingly regulated. The work of the EU in this area may lead to the development of regulations of relevance to Norway.

In the mining sector, Norway encourages adherence to the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Afflicted and High-Risk Areas and participates in the Extractive Industries Transparency Initiative (EITI).

In order to prevent tax evasion and the use of tax havens to conceal financial information, large enterprises and public-interest entities that are active in the extractive industry or in the logging of primary forests are required to report on a country-by-country basis. In addition, Norway has entered into a number of new bilateral tax information exchange agreements in recent years.

							9. Corruption					

Business is generally conducted “above the table” in Norway, and Norway ranks 7 out of 180 countries on Transparency International’s 2019 Corruption Perceptions Index. Corrupt activity by Norwegian or foreign officials is a criminal offense under Norway’s Penal Code. Norway’s anti-corruption laws cover illicit activities overseas, subjecting Norwegian nationals/companies who bribe officials in foreign countries to criminal penalties in Norwegian courts. In 2008, the Ministry of Foreign Affairs launched an anti-corruption initiative, focused on limiting corruption in international development efforts.

Norway is a member of the Council of Europe’s anti-corruption watchdog Group of States against Corruption (GRECO) and ratified the Criminal Law Convention on Corruption in 2004, without any reservations.  Norway has ratified the UN Anticorruption Convention (2006) and is a signatory of the OECD Convention on Combating Bribery.

*Resources to Report Corruption*

The Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (ØKOKRIM)Address: Postboks 8193 Dep, 0034 OsloTelephone: +47 23 29 10 00Email: post.okokrim@politiet.no

Contact at “watchdog” organization:

Guro SlettemarkSecretary GeneralTransparency International NorgePB 582 Sentrum0106 Osloslettemark@transparency.no+47 90 87 46 26

							10. Political and Security Environment					

Norway is a vibrant, stable democracy. Violent political protests or incidents are extremely rare, as are politically motivated attacks on foreign commercial projects or property. However, on July 22, 2011, a Norwegian individual motivated by extreme anti-Islam ideology carried out twin attacks on Oslo’s government district and on the Labor Party’s youth summer camp in Utøya, killing 77 people. The individual, now in prison, operated alone and this incident is not generally considered an indicator of increased political violence in the future.

							11. Labor Policies and Practices					

Obtaining work permits for foreign labor, particularly for semi-skilled workers, can be cumbersome.

Skilled and semi-skilled labor is usually available in Norway. The labor force as of year-end 2019 totaled about 2.85 million persons, representing 70.6 percent of the working-age population.  2.74 million persons were employed at year end 2019, with unemployment at 3.7 percent.

Union membership is in excess of 1.9 million persons, over 50 percent of the labor force. The unions are independent of the government but some, such as the largest (LO), have close and historic ties with the Labor Party. Norway has a highly centralized and constructive system of collective bargaining. The government may impose mandatory wage mediation should strikes threaten key sectors of the economy, particularly the oil and gas and transportation sectors.  Mandatory wage mediation has been used 119 times since 1953, most recently in 2019 to end a strike among hospital nurses.

Employee benefits are generous, e.g., one year’s paid parental leave (shared between parents, and financed chiefly by the government), and unemployment benefits for up to 104 weeks. There are special provisions for layoffs linked to lower activity for the employer.

The average number of hours worked per week in one’s primary job, 33.9 in 2018, is the third lowest in the OECD, after Germany and Denmark. Productivity, however, is high – significantly higher than the EU average. Sickness and absenteeism rates have been between 6-8 percent over the last decade, and stood at 6.0 percent at the end of 2019. Relatively high disability rates, especially among young people, are a concern.

Norwegian blue-collar hourly earnings are comparatively high. High wages encourage the use of relatively capital-intensive technologies in Norwegian industry. Top-level executives and highly skilled engineers, on the other hand, are generally paid considerably less than their U.S. counterparts, which, when combined with relatively high wages at the bottom of the wage scale, contributes to Norway’s very high level of income equality relative to other OECD countries.

							12. U.S. International Development Finance Corporation (DFC) and Other Investment Insurance Programs					

DFC does not operate in Norway. However, Norway is a member of the World Bank Group’s Multilateral Investment Guarantee Agency (MIGA).

The French Credit Insurer COFACE signed an agreement to acquire the Norwegian Guarantee Institute for Export Credits (GIEK), the central governmental agency responsible for issuing export credits and investment guarantees, in February 2020. The acquisition is pending approval from the European Free Trade Association Surveillance Authority (ESA).  GIEK’s primary function is to promote export of Norwegian goods and services, and Norwegian investment abroad. It underwrites exports to over 150 countries of all types of goods and services. The guarantees may encompass a single transaction or a series of transactions and cover not only commercial risk, i.e., bankruptcy on the part of the debtor or non-payment for other reasons, but also political risk, i.e., war, expropriation and actions by public authorities that prevent payment.

GIEK offers long-term guarantees for export of capital goods to most countries, including emerging markets. The guarantees are issued on behalf of the Norwegian government and can be used as security vis-à-vis banks and other financial institutions to facilitate funding. The Director General and a Board of seven Directors are responsible for day-to-day operations. GIEK guarantees the down payment on a loan raised by the buyer for financing deliveries from a Norwegian exporter. GIEK is a member of the Berne Union.

							13. Foreign Direct Investment and Foreign Portfolio Investment Statistics					

* Source for Host Country Data: Statistics Norway (http://ssb.no/en/)

							14. Contact for More Information					

Per SOGGEEconomic SpecialistEmbassy of the United States of AmericaMorgedalsvegen 360378 OsloNorway+47 2130 8665oslopolecon@state.gov

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### On This Page

                    -  EXECUTIVE SUMMARY 
                    -  1. Openness To, and Restrictions Upon, Foreign Investment   
                    -  2. Bilateral Investment Agreements and Taxation Treaties   
                    -  3. Legal Regime   
                    -  4. Industrial Policies   
                    -  5. Protection of Property Rights   
                    -  6. Financial Sector   
                    -  7. State-Owned Enterprises   
                    -  8. Responsible Business Conduct   
                    -  9. Corruption   
                    -  10. Political and Security Environment   
                    -  11. Labor Policies and Practices   
                    -  12. U.S. International Development Finance Corporation (DFC) and Other Investment Insurance Programs   
                    -  13. Foreign Direct Investment and Foreign Portfolio Investment Statistics   
                    -  14. Contact for More Information   

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