FDI in Norway
FDI in Figures
Norway encourages foreign investment and the investment climate is very positive. Even though foreign investment flows froze under the effect of the global recession, they should start to increase again with the revival. Another major reason for which the country has lost some of its appeal is that the government owns a significant share in the oil industry. Nevertheless, American and Dutch oil companies (Exxon-Mobil, Texaco, Royal Dutch Shell) have made important investments in Norway. In general, the most attractive industries for FDI are oil, gas, manufacturing, the retail and wholesale sectors and banking. Even though Norway's domestic market is very narrow, the country has many assets such as its location in the core of a flourishing area, its privileged ties with the United States, its population is high-qualified and multilingual, its economy is top-modern as well as its energy resources.
|Foreign Direct Investment||2007||2008||2009|
|FDI Inward Flow (million USD)||5,940||7,981||6,657|
|FDI Stock (million USD)||125,594||109,432||116,090|
|Performance Index*, Ranking on 141 Economies||122||110||86|
|Potential Index**, Ranking on 141 Economies||10||12||-|
|Number of Greenfield Investments***||25||45||30|
|FDI Inwards (in % of GFCF****)||6.9||8.3||11.8|
|FDI Stock (in % of GDP)||32.4||24.3||30.4|
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 %|
|Main Invested Sectors||2008, in %|
|Mining and quarrying||28.5|
|Financial intermediation and insurance, real estate and commercial services||24.0|
|Transportation and communications||8.7|
|Wholesale, retail, hotels and restaurants||8.1|
Source: Statistics Norway
- 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
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.
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