Foreign Direct Investment

Due to the economic crisis triggered by the Covid-19 pandemic, FDI in Norway dropped sharply in recent years: according to UNCTAD’s World Investment Report 2022, FDI inflows were negative both in 2020 and 2021, at minus USD 1.3 billion and USD 1.6 billion, respectively. The country's FDI stock stood at USD 150.2 billion in 2021. Despite the uncertain economic situation, Norway continues to be a major investor abroad, with a total stock of outward FDIs of USD 198.2 billion. The latest data from Statistics Norway show that the main sectors in terms of inward FDIs are mining and quarrying (18%), financial and insurance services (17.8%), manufacturing (12.1%), wholesale and retail trade (9.1%), and real estate (8.3%). In terms of ultimate investing country, the U.S. leads the way with 19.5% of the total stock, followed by Sweden (11.5%), the UK (7%), Denmark and Finland (6.4% each, Statistics Norway). 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. However, the trend reversed due to the ongoing conflict between Russia and Ukraine and the consequences it caused in the energy market (new investments in the gas sector worth USD 672 million were announced in 2022 – FDI Intelligence). Lately, 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 2022 FDIs to Norway totalled USD 3.9 billion, compared to a flow of USD 5.8 billion recorded in the same period one year earlier.

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 8,100 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, its skilled and multilingual population, a modern economy and rich energy resources. Norway has a particularly favourable business climate, and the country ranks 14th out of 82 nations in the Economist Business Environment ranking. It is also ranked at 12th place out of 102 in the 2022 Corruption Perception Index.