Doing business in Norway Teamwork, Integrity, Quality and Dedication constitute the main platform of Arntzen de Besche Law Firm’s activities. These values reflect the firm’s and our employees’ commitment and dedicati- on. Arntzen de Besche consists of 170 unique individuals – which jointly are leading. In addition to its main office in Oslo, Arntzen de Besche is present in Trondheim and Stavanger. We want to be a close partner to private and public stakeholders through goal-oriented collaboration and by using our commercial understanding and sector knowledge to advice our clients. One of the firm’s focus areas is to develop its international operations as part of the internationalization of Norwegian industry and to further assist national authorities in petroleum producing countries globally. We aim to keep the highest ethical standards at all times and it is important to us that each employee is trusted by our clients, other partners and contacts, and the society in general. Copyright @ 2017 Arntzen de Besche Publisher: Arntzen de Besche Design: Idéverkstedet AS Production: Frode Fjellberg AS Photo: canstockphoto.com / thinkstockphotos.com / Adobe Stock Warning and Disclaimer The information in this book is for general information purposes only and does not claim to be comprehensive or provide legal or other advice. Arntzen de Besche Advokat- firma AS accepts no responsibility for loss which may arise from accessing or reliance on information contained in this book. The book is current as of its date of publication and do not necessarily reflect the present law or regulations. The contents of this book are protected by copyright under international conventions. Users are permitted to read the contents and make copies for their own personal use. They may also give copies (in paper or electronic form) of reasonable extracts on an occasional basis free of charge to colleagues and clients for their personal use, on terms that (i) Arntzen de Besche Advokatfirma AS is acknowledged as the source, (ii) the text is not altered in any way and (iii) the attention of recipients is drawn to this Warning and Disclaimer. All other use and copying of any of the contents of this site is prohibited unless the prior written consent of Arntzen de Besche Advokatfirma AS is obtained. ISBN 978-82-990261-7-8 The practice at Arntzen de Besche Law Firm dates back to 1870. Today, our 130 lawyers at the offices in Oslo, Trondheim and Stavanger serve Norwegian and foreign business clients in nearly all fields of the law. We are dedicated to providing advice and expertise at the highest levels, and we have time and again achieved extraordinary results following the distinctive vision of our founders. Client service is the foundation goal of every law firm. Every day of the year, our cohesive team of lawyers focus intensely on solving our clients’ most important problems. Our main objective is to assist our clients in the best possible way. We cannot succeed without continuous work and relentless search for improvements. In our day to day work assisting our clients, we always seek to achieve excellence within the profession, thus helping the clients attain their objectives. By publishing a new edition of Doing Business in Norway we want to give the reader an updated summary of the core elements of Norwegian law. We sincerely hope that this publication will be of interest to companies and individuals contemplating at engaging in business activities in Norway. Although the book covers a number of legal subjects, the intention is limited to providing a brief outline of each area of the law. We hope that you will find this introduction useful and readable. Arntzen de Besche Sven Iver Steen Trond Vernegg Erlend Haaskjold Managing Partner M&A Partner, Editor Litigation Partner, Editor 3 DOING BUSINESS IN NORWAY Svartisen is Norway’s second largest glacier and covers more than 370 square kilometres. The highest point on the glacier rises to 1,595 metres above sea level. The name Svartisen comes from ‘svartis’, or ‘black ice’, an old word used to describe the deep blue colour of the ice and the contrast with the white snow and newer ice on the glacier plateau itself. The lowest part of the glacier is just 20 metres above sea level, making it easily accessible to tourists and glacier walkers. CONTENT INTRODUCTION ..................................................10 INSOLVENCY ........................................................... 54 General ...................................................................................11 General .................................................................................55 FORMS OF DOING BUSINESS ..................13 TAX SYSTEM ..............................................................59 General ................................................................................. 14 General ................................................................................60 Tax administration ..........................................................60 LIMITED LIABILITY COMPANIES ............16 Tax treaties.........................................................................60 Private and public Entities subject to tax ......................................................61 limited liability companies ..............................................17 Rate of tax ..........................................................................62 Incorporation .......................................................................18 Tax losses ............................................................................63 Company capital ..............................................................20 Interest ................................................................................64 Shares and shareholders’ rights ....................................21 The general meeting ........................................................22 PARTICIPATION EXEMPTION .................................... 66 Qualifying investments / COMPANY MANAGEMENT ...........................................25 Shares in limited liability companies ......................... 66 The board of directors .....................................................25 Investments in partnerships General Manager ...............................................................27 and hybrid entities .......................................................... 68 The corporate assembly .................................................28 Investments in securities’ funds ................................. 68 Auditor .................................................................................28 Investments in other equity instruments ................. 69 Representation and signatory power..........................28 Investments in non-equity instruments .................. 69 DISTRIBUTION OF EQUITY ...........................................31 BUSINESS TAXATION ......................................................71 Dividend ...............................................................................31 Depreciation ........................................................................71 Capital reduction ..............................................................32 R&D (Skattefunn)..............................................................73 Merger or demerger ..........................................................32 Tax consolidation ..............................................................74 Repayment following liquidation ................................32 Exit taxes .............................................................................76 Capital increase .................................................................32 Tax residency ......................................................................77 FINANCIAL INSTRUMENTS ..........................................36 Taxation of non-residents ..............................................78 Convertible loans ..............................................................36 Withholding taxes .............................................................79 Warrants shares .................................................................37 Mergers and reorganisations .........................................95 Warrants ..............................................................................37 CFC regime ........................................................................80 Share capital reduction ...................................................38 TRANSFER PRICING ......................................................83 MERGERS AND DEMERGERS Scope of rules ....................................................................83 BETWEEN LIMITED COMPANIES ..............................40 Documentation ................................................................ 86 Merger ..................................................................................40 Advance Pricing Agreements ....................................... 86 Demerger ............................................................................ 42 SPECIAL TAX REGIMES ................................................. 88 Dissolution and winding-up ......................................... 43 Transfer of license interests .......................................... 88 Board liability ....................................................................44 Refund of tax value of exploration costs .................. 88 PARTNERSHIPS....................................................46 Hydro-electric plants .....................................................