Norway: Investing in Norway
Due to the economic crisis triggered by the Covid-19 pandemic, FDI in Norway dropped sharply to almost USD -2.4 billion in 2020, down from USD 16 billion in 2019. The country's FDI stock stood at USD 148 billion in the same year (UNCTAD World Investment Report 2021). Despite the uncertain economic situation, Norway continues to be a major investor abroad. Sweden, the U.S. and the Netherlands almost consistently rank as top investors in Norway, accounting for more than 40% of inflows (Statistics Norway); whereas mining and quarrying, manufacturing and financial services are the main sectors in terms of FDI stock. The Norwegian economy is largely based on the petroleum and gas sector. Consequently, the decline in the price of hydrocarbons led to a drop in investment in Norwegian oil companies in recent years. Most recently, the Norwegian government pension fund has enhanced its efforts to move towards sustainable investments, for example by announcing the divestment of carbon-related assets from its portfolios. According to the latest figures by OECD, in the first six months of 2021 FDIs to Norway totalled USD 9.3 billion, compared to a negative flow of USD 5.1 billion recorded in the same period one year earlier, mostly thanks to the recovery of investment in the oil sector.
The Norwegian government introduced a new investment screening regime, allowing Norwegian authorities to investigate and block FDI on grounds of national security, national financial stability and autonomy. The decision applies to EU and non-EU investments alike. There are about 7,400 foreign-owned companies in Norway (U.S. State Department). While the country has a small domestic market, it possesses several assets, such as its geographic location in a fertile region, its favoured ties with the United States, skilled and multilingual population, a modern economy and rich energy resources. Norway has a particularly favourable business climate. The country is ranked 9th out of 190 in the latest Doing Business report of the World Bank, losing two spots compared to the previous edition.
Foreign Direct Investment | 2019 | 2020 | 2021 |
FDI Inward Flow (million USD) | 16,715 | -1,326 | -1,628 |
FDI Stock (million USD) | 170,542 | 169,837 | 150,246 |
Number of Greenfield Investments* | 33 | 51 | 46 |
Value of Greenfield Investments (million USD) | 1,177 | 968 | 1,579 |
Source: UNCTAD, Latest available data
Note: * Greenfield 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.
Country Comparison For the Protection of Investors | Norway | OECD | United States | Germany |
Index of Transaction Transparency* | 7.0 | 6.5 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 5.0 | 5.3 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 8.0 | 7.3 | 9.0 | 5.0 |
Source: Doing Business, Latest 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.
Advantages for FDI in Norway:
Disadvantages for FDI in Norway:
On January 1, 2019, a new law on national security came into force that provides the legal basis for a better evaluation of foreign investment by the government. ‘Target’ businesses are obliged to notify the relevant ministry under which they are regulated.
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Latest Update: January 2023