Norway: Economy and Business Opportunities – An International Perspective

Norway is well-known as a prosperous country. It boasts the world's largest sovereign wealth fund as well as one of the highest GDP per capita. It also ranks at the top of the UNDP Human Development Index.

The EU outsider has fared much better than the Eurozone, where GDP declined by 6.6% by the time 2020 was over. Norway, on the other hand, ended 2020 with a GDP decline of only 1.4%.

Both the downturn and the recovery of the country's economy were faster than in most other parts of Europe. In March 2020, the Norwegian krone reached a 40-year low after a dramatic drop in oil and gas prices. In order to increase global oil prices, the country decided to limit short-term oil production in April. Softer COVID-19 measures also helped to counter the global drop in oil and gas prices.

Since the first wave of the pandemic eased down much sooner than in most other parts of Europe, the economy began to recover as early as June.

In contrast to the rest of Europe, Norway's government gross debt did not increase in 2020, despite public monetary support and a robust loan program to banks.

Before the pandemic, unemployment had been steadily decreasing, but the pandemic's negative impact on the hospitality sector put a stop to this trend. There's an estimated rise to 4.5% in 2020, but it should drop to 4.3% in 2021 and 4% in 2022.

The inflation rate in 2020 stayed below 2%, but it's expected to rise to 3.3% in 2021 as domestic consumption increases.

Norway and the rest of Europe's north-eastern corner have done remarkably well in mitigating the economic fallout of the pandemic, aided by comprehensive welfare systems, broad digitalization, and relatively low reliance on tourism. As vaccination programs pick up and international trade recovers, it appears that this legacy will endure. Experts expect further economic recovery in the second quarter, and output should surpass pre-pandemic levels by the end of the year.

With all these statistics, it's easy to see why it's worth exploring Norway's business opportunities. The country is a world leader in many industries such as oil and gas, electricity, and maritime. Innovation, technology, and knowledge development are also given high priority, so sectors like MedTech, FinTech, EdTech are booming. Foreign companies interested in investing in Norway can find relevant networking opportunities, potential partners, and specialists.

Furthermore, starting a business in Norway is relatively easy, as evidenced by Norway's ninth place in the 2020 Ease of Doing Business ranking.

Can I Start a Company in Norway if I'm Not a Norwegian Citizen?

Yes, you can. You don't have to be a Norwegian citizen to set up a business in Norway, but if you're not from a country that's a member of the EU or EEA, you will need to get a residence permit.

As a foreign national, you will be subject to the same laws as Norwegian business owners. You'll need to get a Norwegian identification number (D-number), and a Norwegian business address – a post box will not meet the requirements.

You can register your business through company registration sites such as Altinn. Altinn is what most Norwegians use since it provides all the information you need to start a business, including forms, document templates, and guides.

You can begin running your business once it's been legally registered. All companies in Norway are expected to keep track of and document their revenue and expenditures. If your company generates revenue of more than NOK 50,000 per year, you'll need to use an accounting system to do your bookkeeping.

You'll also want to familiarize yourself with the deadlines you must adhere to when submitting documentation and payment. If you hire an accountant, they can do this for you, but it's still better to keep yourself informed.

Main Sectors of the Norwegian Market

Despite the fact that Norway is not a member of the European Union, the EEA and Schengen agreements have allowed it to fully integrate into the European single market.

Natural resources abound in the region, and its economy is based on their exploitation. For instance, Norway is the most important natural gas supplier in Western Europe. However, the oil rents that once dominated the GDP now account for only 5.2%. The political consensus is to save the revenue generated through gas and oil for future generations, which is why Norway has the world's largest sovereign wealth evaluated at more than $1.1 trillion as of January 2021.

The industry sector accounts for 29.1% of the GDP and 19.1% of the workforce. Its share of the GDP began to rise in 2017 after years of continuous decline. The main manufacturing sectors are metals, machinery and electrical equipment, wood pulp and paper, chemical industry, and shipbuilding. Norway also boasts one of the world's largest and most modern fleets.

Fishing is another important commercial activity. Norway is, in fact, the second biggest seafood exporter after China.

Agriculture accounts for 1.9% of the GDP and 2% of the workforce. Subsidies to agriculture are substantial.

The service sector is very well-developed. It accounts for 57.7% of the GDP and 78.9% of the workforce. The skilled workforce in this country is renowned for its high levels of competence and efficiency. The country maintains a competitive advantage across industries through its balanced cooperation between government, industry confederations, and labor unions. This structure ensures flat hierarchies with high productivity and versatility, and low conflict levels.

As an expat looking to make money in Norway, you might want to look into starting an import/export business, especially if you already have useful connections in your home country. However, don't jump in until you conduct thorough market research. You need to be aware of how much demand there is for your products and what are the tax implications.

The real estate sector is another lucrative option. Norway is widely regarded as one of the safest places to invest in real estate. It has a strong economy with supportive legislation.

Automobile repair and servicing businesses have proven profitable in almost every country. Considering Norway's geographical location, climate, and social culture, this can be a very attractive opportunity, especially if you have already acquired some experience and the technical know-how in your home country.

This article does not necessarily reflect the opinions of the editors or the management of EconoTimes