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Foreign Direct Investment

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 201920202021
FDI Inward Flow (million USD) 16,715-1,326-1,628
FDI Stock (million USD) 170,542169,837150,246
Number of Greenfield Investments* 335146
Value of Greenfield Investments (million USD) 1,1779681,579

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.


What to consider if you invest in Norway

Strong Points

Advantages for FDI in Norway:

  • Norway has a very strong economy and encouraging prospects of development. 
  • The high value-added sector of information and communication technologies is, for example, very well developed. 
  • The public sector is well organised (around a sovereign fund in surplus that can intervene at any time in the economy) and the country has high quality infrastructure. 
  • The workforce is highly skilled, multilingual and has one of the highest purchasing powers in the world. 
  • As can be seen from its eighth spot in the World Bank ranking of countries where it is easier to do business (Doing Business Norway), the business environment in Norway is very positive and stable. 
  • The banking and financial sectors as well as the fiscal and legal framework are also very robust. 
  • The country's political environment is democratic, healthy and transparent.
Weak Points

Disadvantages for FDI in Norway:

  • Norway's economy is generally not very diversified and is therefore very dependent on the price of oil, and the country has already exceeded the peak of its production (even if new deposits have been discovered). 
  • Like any open international economy, it is also very vulnerable to the economic situation of its main economic partners and the impact of the exit of the United Kingdom (Norway's largest export market) on its economy is still difficult to predict. 
  • Due to the geographical isolation of certain regions of the country, expenditure in the areas of transport, logistics and telecommunication infrastructure is very high. 
  • The country has put in place relatively strict labour laws that accentuate the extremely high wage costs in the country.
Government Measures to Motivate or Restrict FDI
The government maintains an open position towards FDI in Norway. Norway does not offer significant tax benefits to investors (whether foreign or Norwegian), but some benefits, such as lower social security contributions, lower tax rates and additional deductions for individuals apply for investments made in the less populated areas of northern Norway. Existing regulations, standards and practices may slightly favour Norwegian, Scandinavian and European Economic Zone investors.
For more information you can visit the Innovation Norway page, the government agency whose purpose is to help companies offer financing through the Industrial Development Contracts and Research in Norway. 

Special restrictions exist in Norway and apply in the following sectors: 

  • Acquisition of waterfalls, rights for power supply and mines
  • Acquisition of land, real estate and leases in the long term
  • Acquisition of cultivable land and forests
  • Purchase of more than 10% of the share capital of a Norwegian financial institution
  • Direct investments in exploration and petroleum operations that are licensed by the government

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.


Investment Opportunities

The Key Sectors of the National Economy
The best business opportunities are consumer goods, information and communication technologies, construction and services for business, oil and gas, food processing, marine industry, fishing, shipbuilding, mechanical engineering and metals.
High Potential Sectors
Equipment / machinery and services for natural gas fields, telecommunications, naval and marine equipment, renewable energies, environmental technologies, medical equipment and supplies, security equipment, transport infrastructure (road network, rail network and urban transport), data centers, battery tech, life sciences, ocean tech, digitalisation, tourism.
Privatization Programmes
Norway has no current plans to privatize any state-owned enterprise.
Tenders, Projects and Public Procurement
Doffin, Public Procurement portal
Tenders Info, Tenders in Norway
Ted - European public markets, Business opportunities in EU 27
DgMarket, Tenders Worldwide

Sectors Where Investment Opportunities Are Fewer

Monopolistic Sectors
Postal services, railways, domestic production and retail sale of alcohol.
Sectors in Decline
None in particular.