OECD Economic Surveys: Norway 2026

Yosuke Jin

Eline Holter Henriksen

Productivity growth has slowed over the past decades in Norway (Figure 4.1). Past OECD studies suggest that stringent regulations in the product market adversely affect productivity developments at the firm level (Andrews, Criscuolo and Gal, 2019) as well as at aggregate levels (Conway et al., 2006); (Nicoletti and Scarpetta, 2003), where the efficiency of resource allocation is also reflected (Arnold, Nicoletti and Scarpetta, 2011; Andrews and Cingano, 2014). According to the OECD framework for the quantitative assessment of structural reforms (Égert and Gal, 2017), such stringent regulations, together with rigid insolvency regimes, account for a substantial share of impediments to long-run productivity developments.

Regulations are essential for achieving various objectives and they can support economic activity. Therefore, the key policy challenge is to achieve these objectives effectively while minimising the economic distortions generated by regulation. These objectives include economic ones, which address market failures such as asymmetric information (e.g., adverse selection and moral hazard) and externalities (e.g., pollution), as well as social and environmental objectives. However, regulations create trade-offs with economic efficiency when they entail adjustment frictions. In particular, regulations impose compliance costs (e.g., adjustments in production processes), administrative burdens (e.g., the time and resources spent monitoring and reporting compliance), and costs related to delay and uncertainty (Cordes, Dudley and Washington, 2022). The decline in business dynamism could be attributed to rising adjustment frictions, which reduce the responsiveness of firms to growth opportunities (Decker et al., 2020).

The approach to discussing regulations needs to evolve to address new challenges (OECD, 2025a); (European Union, 2025). As in many other OECD countries, regulatory barriers discriminating against market entry have been significantly reduced over the past three decades in Norway. At the same time, regulatory compliance costs and administrative reporting burdens have increased. The number of legislative proposals has substantially increased over this period in the European Union. In addition, the average length of each proposal has almost doubled (Marcus, 2024) and the language has also become increasingly complex (Haag, Hurka and Kaplaner, 2025). Norway is part of the European single market, which requires the incorporation and application of legislation covered by the European Economic Area (EEA) agreement into national law. Moreover, the country has also introduced its own new regulations, which have outpaced the reduction in existing ones.

The focus on regulations is also shaped by changes in economic and technological developments. As the economy has evolved over time, the policy objectives underlying some regulations may have become outdated. Also, progress in digitalisation provides new opportunities to better manage regulations by simplifying and streamlining regulatory obligations for businesses, strengthening coordination across authorities and even reducing some of the risks that form the rationale for certain regulations – risks that may now be addressed more cost-efficiently through alternative policy instruments. In parallel, regulatory frameworks need to be adapted to fully harness the productivity gains offered by digitalisation and artificial intelligence (OECD, 2025a).

A growing and more stringent regulatory environment may have a role in sapping the vitality of OECD economies (OECD, 2025a). To the extent that regulatory burdens add to adjustment frictions, they reduce the efficiency of resource allocation across firms. In particular, the fixed costs stemming from such regulatory burdens disproportionately weigh on potential entrants and new firms. This would amplify the stymieing effects on market entry of explicit entry barriers and rigid insolvency regimes that excessively penalise failed entrepreneurs. All of these factors harm productivity-enhancing channels, as new firms often possess a comparative advantage in radical innovation while also exerting competitive pressure on incumbents to innovate. The progress in implementing the policy reforms recommended in past OECD Economic Surveys has been overall limited (Table 4.1).

The OECD Product Market Regulation (PMR) indicators, which assess regulatory frameworks in legislative terms by standardised metrics across countries, suggest that regulatory frameworks in Norway are overall less stringent than in many other OECD countries (Figure 4.2; Panel A). Norway is among the best performer across OECD countries in several policy areas, such as the governance of state-owned enterprises (SOEs), conduct and entry regulations in service sectors, trade facilitation and trade tariffs. However, the country’s performance lags behind the OECD average in “Administrative and regulatory burden”, which assesses entry barriers, and “Regulations impact evaluation”, which relates to the regulatory policy making system (Figure 4.2; Panel B). The PMR indicators do not directly cover regulatory burdens that firms face on a continuous basis, such as compliance costs and administrative reporting burdens, but these costs can result from a weakness in “Regulations impact evaluation” as discussed further below.

According to recent surveys conducted by the OECD, most business associations consider regulation in their country to be excessive (OECD, 2025b). In these surveys, the number of business associations reporting regulatory requirements and compliance as the most significant challenge was by far the largest, more than twice the number of those identifying other issues such as talent acquisition and retention, taxation. Very similar results are found for Norway, according to surveys conducted among Norwegian firms by NHO (2025). Survey results find that firms perceive regulatory issues as the most important non-market determined obstacle to firm expansion, exceeding taxation or access to finance (Figure 4.3).

Among regulation-related tasks, business associations from 67% of countries in the OECD surveys view reporting costs as the most burdensome, followed by costs incurred complying with content obligations in regulation, frequent changes to regulation and lack of coordination between different regulatory bodies. The same trend is observed in Norway. According to the NHO surveys, firms report overall reporting burdens are the most burdensome regulatory requirements, followed by content obligations in regulation (Figure 4.4).

The vast majority of business organisations (77%) in the OECD surveys reported that administrative compliance costs have grown over the past three years. The situation is similar in Norway. According to a survey conducted by NHO in 2025, 66% of surveyed firms perceived that the administrative burden had increased over the past two years. The Better Regulation Council, a regulatory oversight body (see below), conducted qualitative assessments of the impact of regulatory proposals on businesses. According to these assessments, out of 300 proposals reviewed in 2024, 250 involved costs for businesses. Most of these entailed small costs, but 88 involved high-to-medium costs. The remaining 50 proposals were considered as reducing business costs.

Reporting obligations in Norway, as elsewhere, are wide-ranging, and some of them are cumbersome. For instance, the VAT system is complex due to exemptions and multiple rates. Some firms face difficulties in identifying the VAT rules applying to their products. As a result, there is a risk that that firms, concerned about underreporting and subsequent penalties, pay too much when declaring VAT. Against this background, firms often rely on reporting tools and authorised accountants to comply with a wide range of requirements, which in some cases are very costly. Such tools can, for instance, connect firms’ bank accounts with the accounting system and convert data into a format compliant with public reporting requirements. These systems may be used in cooperation with a state-authorised accountant who can review, correct, or file reports on behalf of business owners. As a result, overall reporting burdens are substantial, in particular, for small businesses (Box 4.1).

Moreover, firms are often required to submit the same information to multiple authorities (NHO, Regnskap Norge and Revisorforeningen, 2024). This relates in particular to turnover data, wage and payroll information, sickness absence and income declarations, annual accounts and other accounting information, as well as general business data. For instance, the Norwegian Labour and Welfare Administration (NAV) often requires firms to provide the same information that they have already submitted to the tax authorities. The necessary information, however, already exists in a digital platform where such information is supposed to be shared among authorities (“Altinn”, see below). On top of this, the Labour Inspection Authority can also require firms to provide the same information again during its controls.

Costs associated with complying with content obligations in regulation are difficult to quantify, but they are likely to be significant (NHO, 2025). According to a survey conducted by NHO among its sector-level affiliate associations, the share of those reporting industry-specific regulations as most burdensome is notably high in renewable energy and power producers (72%), followed by seafood and aquaculture companies (57%) and financial institutions (54%). Indeed, Norwegian environmental, social and sustainability regulations tend to strive for best-in-class standard, with correspondingly heavier requirements. According to the OECD Environmental Performance Reviews (OECD, 2022), Norway has aligned its actions with many EU regulations and goals as part of the EEA, sometimes with more stringent requirements than EU members.

Although it is difficult to assess the overall regulatory costs, a recent OECD study attempts to identify them by looking at the resources spent on dealing with regulation. Andrews, Turban and Tyros (2026), using a task-based approach, found that the share of aggregate wages devoted to regulation-related tasks in the United States increased from 4.0% in 2012 to 4.2% in 2024, amounting to USD 521 billion or 1.8% of GDP. They also found that the share of jobs devoted to regulatory tasks in the United States is 3.2% in 2024. According to the estimate, following Andrews, Turban and Tyros (2026), the share of jobs devoted to regulatory tasks increased in the 2010s and has remained higher in Norway than in the United States and the European countries for which data are available (Figure 4.5).

According to Andrews, Turban and Tyros (2026), the average increase in regulatory costs over the last 10 years (around 3%) is associated with a decline in labour productivity of 0.5% and a reduction in the share of workers in young firms of almost 0.4 percentage points. These results are broadly in line with other studies that found a material aggregate cost of regulatory burdens (Coffey, McLaughlin and Peretto, 2020; Dawson and Seater, 2013). These results suggest that high regulatory costs may weaken business dynamism and productivity growth in Norway.

The entry rate has been declining in Norway (Figure 4.6), although business dynamism appears to be strong, given high entry and exit rates (Box 4.2; Figure 4.7). Moreover, firm expansion is limited compared with many EU countries (Figure 4.7), while the share of employment in young firms has been declining (Figure 4.6). The share of “high-growth” firms (i.e., those that have increased employment by at least 10% over the past three years) and their contribution to both total employment and value added has markedly declined in Norway since the late 2000s (Fjaerli, Nygård and Rybalka, 2025). The trend decline in firm entry and the expansion of young firms can be associated with high regulatory burdens (OECD, 2025a).

The low survival rate among young firms (Figure 4.7) may indicate that the high exit rate reflects, at least partially, the premature dissolution and liquidation of young and innovative firms in Norway. This occurs in a context where young firms in Norway have a relatively higher propensity for innovation than elsewhere (Figure 4.8). Fjaerli, Nygård and Rybalka (2025) examine changes in the status of young firms classified as “high-growth” during the period from 2005 to 2014 at a nine-year horizon (Figure 4.9). They showed that only 42% of them survived in the market nine years after they had become a “high-growth” firm.

Aggregate productivity developments have been increasingly driven by a handful of large established firms. McKinsey (2025), based on a sample of around 3 400 Norwegian companies across five key industries, documented that 1% of these firms (“frontrunners”) accounted for around 40% of total productivity growth in these industries during the period between 2015 and 2023. Most of these frontrunners are large established firms. Compared with the largest companies in other Nordic countries, the largest Norwegian companies tend to focus more on maintaining steady cash flows than on pursuing further growth (NHO, 2025). Over the period 2005-25, among the top 50 Nordic companies, Norwegian firms have increased dividend payments more than those in other Nordic countries, while they increased investment to a lesser extent than their counterparts.

Growth prospects, as measured by market capitalisation, are low compared with other Nordic countries. Among the 50 largest listed Nordic companies, the share of Norwegian companies in total market value has more than halved since the mid-2000s (NHO, 2025). The same source showed that the value of Norwegian growth companies among the 1 000 largest growth companies in the Nordic region was also lower than in Denmark, Finland and Sweden as of 2022. These findings suggest that business dynamism needs to be revived by supporting the entry and expansion of new firms. The on-going government initiatives to reduce regulatory burdens and to reform insolvency regimes should contribute to this objective. Other related recommendations in this Survey, in particular the reform of capital taxation (Chapter 1), would also help boost business dynamism.

Given the increasing regulatory burdens and declining business dynamism, there is now a strong case for a regulatory reset in Norway, as in other OECD countries. It should aim to manage more effectively the current stock of regulations and ensure that the design of new regulations is sufficiently responsive to an evolving economic environment (OECD, 2025a). A robust regulatory policy-making system lays the groundwork for such a regulatory reset. However, this is an area with large scope for improvement in Norway according to the OECD PMR indicators (Figure 4.2, Panel B).

The Norwegian government announced a new regulatory simplification strategy to reduce administrative costs in spring 2026. The strategy will introduce a requirement to use e-invoicing and digital bookkeeping, although its details are not yet established. The government introduced a similar strategy in the past, aiming to save the business community NOK 11 billion between 2021 and 2025. According to a government report published in August 2025, the measures adopted so far are expected to result in annual cost savings for businesses of around NOK 7 billion, including the use of electronic invoicing, an important ongoing initiative. However, the actual progress seems to be below the target according to the head of NHO. This may reflect underlying regulatory issues that impede the full utilisation of digital technologies (see below).

While pursuing simplification by utilising digital technologies, the Norwegian government should tackle the complexities of regulations themselves. Ex-post reviews of regulations are the area with the greatest scope for improvement in Norway (OECD, 2025c; Figure 4.10), according to the OECD Indicators of Regulatory Policy and Governance (iREG). The OECD’s Best Practice Principles on Reviewing the Stock of Regulation provides guidance on how to review existing regulations in line with this recommendation (OECD, 2020a). The following discussion builds on this guidance.

In Norway, periodic ex-post evaluation of rules is mandatory for some primary laws. This is also the case in some OECD countries, whereas systematic mandatory periodic ex-post evaluation of all (or at least major) primary laws exists in slightly more than 30% of OECD countries. In Norway, such mandatory ex-post evaluation may be required by Parliament when the legislation is enacted, but there is no systematic requirement across all primary laws. Threshold tests to identify those regulations with the highest impact, thus requiring a review, are not used. In the United Kingdom, in contrast, regulations affecting businesses are systematically reviewed every five years, covering relevant aspects discussed just below (OECD, 2020a).

According to OECD (2020a), there are four key questions that guide ex-post reviews, forming the basis of ex-post evaluation methodology. The first is whether a valid rationale for regulating still exists (“appropriateness”). In reviewing the performance of a regulation, it is essential first to determine whether the underlying policy logic remains valid in light of subsequent changes in the economy and policy environment. The larger the number of objectives and the more ambitious they are, the more authorities need to navigate complex trade-offs between the different objectives. One such example can be seen in the agriculture sector (Box 4.3). Such restrictive regulations not only limit competition in the agriculture sector but also induce anti-competitive practices among large incumbents in the retail sector (Norwegian Competition Authority, 2024; Box 4.4).

The second key question is whether the regulation has actually achieved its intended objectives (“effectiveness”). A fundamental element of reviewing the performance of regulations is to assess the outcomes relative to what otherwise would have occurred. In Norway, where periodic ex-post evaluation of rules is undertaken for some primary laws, it systematically assesses whether the underlying policy goals have been achieved. In around one quarter of OECD countries, such an assessment is required for all primary laws. Ensuring continued effectiveness also means that policymakers must be mindful of the assumptions made at the design stage and observe if they prove to be accurate in practice. Such comparisons between actual and predicted impacts are conducted in some ex-post evaluations in Norway.

The third key question is whether regulation has achieved its goals at minimum cost and without unintended adverse outcomes (“efficiency”). Overall, countries are less likely to assess costs and benefits when evaluating rules than when designing them, but around 20% and 25% of OECD countries assess systematically assess costs and benefits, respectively, including Sweden in both cases. In Norway, both costs and benefits are assessed only for some primary laws, and quantification is not required in either case. Without comprehensive consideration of both costs and benefits, it is not possible to determine the net impact of a rule. Moreover, it is unclear how costs are assessed, as administrative burdens, compliance costs, and enforcement costs are never assessed. This is in contrast with ex-ante evaluation, in which all of these are systematically assessed. Finally, while around 30% of OECD countries examine unintended consequences systematically for all primary laws, Norway examine them only for some ex-post evaluations.

The fourth key question is whether alternative approaches may have performed better (“alternatives”). This represents an opportunity to reconsider whether other options might be more efficient at lower cost and/or more effective in achieving regulatory goals. Notwithstanding such benefits, only three OECD countries, namely, the United Kingdom, Korea and the Slovak Republic, systematically assess the impact of a rule against alternative options for all primary laws, while Norway does so only in some ex-post evaluations, as is the case in many other OECD countries. Such assessment would help inform recommendations as to whether the regulation in question needs to be modified or replaced by alternative policy instruments. For Norway, such assessments would be particularly helpful in the areas where regulatory stringency is relatively high such as licensing requirements (see below).

The results of ex-post evaluation of regulations are generally available to the public. One such example among recent evaluations is the assessment on the Norwegian Transparency Act, conducted by the Ministry of Children and Families, drawing also on input from external bodies such as KPMG. The evaluation concludes that the Transparency Act has significantly strengthened Norwegian companies’ work on responsible business conduct. However, it also identified challenges such as high compliance costs and administrative burdens, including those related to building internal systems. According to the report, actual costs may have been around three times higher than originally estimated. Moreover, the report identified some unintended consequences: while supplier questionnaires (“skjemavelde”) are extensively used, small firms may be excluded due to heavy documentation requirements; and while disclosure requirements are high, more transparent companies may score lower than competitors who do not disclose risks sufficiently. These findings provide key insights for possible reforms.

Finally, ex-post evaluations are only useful if they inform necessary changes to existing rules. In Norway, although periodic ex-post evaluations have been conducted, the government does not provide a public response to the recommendations made in these evaluations. In particular, the country does not report evidence that recommendations from ex-post evaluations have led to tangible improvements in the evaluated regulations, in contrast with Denmark, Finland and Sweden. This crucial step – translating ex-post evaluations into actual changes to existing regulations – remains a gap in many countries (OECD, 2025f). Norway should consider filling this gap by strengthening the mechanisms through which ex-post evaluations are effectively translated into reforms of existing regulations.

Ad hoc reviews can be established to address a more general theme or concern, such as compliance costs, or to focus on a particular economic activity, alongside the programmed ex-post evaluations. There are clear benefits to review regulations as a group, rather than individually, where the regulations concerned interact with each other or operate jointly to achieve related policy objectives (OECD, 2020a). Some of the largest gains from reform have resulted from such ad hoc initiatives (OECD, 2020a). In conducting such broader reviews, high priority should be given to reviewing regulations that have wide application across the economy or society and have potentially significant impacts on citizens or organisations, and for which there is prima facie evidence of a problem (OECD, 2020a).

Countries have an opportunity to make more strategic use of reviews that broadly assess the stock of regulations, depending on the identified problems. One such approach is the so-called “principle-based review”, which focuses on a uniform screening criterion or principle to address specific performance issues or impacts of concern. This approach, being more selective, tends to be more manageable than “in-depth” reviews (see below) and can enable deeper analysis (OECD, 2020a). Principle-based reviews are relatively common, as for instance 17 EU member countries have undertaken them over the past five years. In doing so, most focused on administrative burdens, while other criteria such as compliance costs and competition were used much less frequently. In some OECD countries, such broad-based reviews focusing on compliance costs or competition have been conducted, including as many stakeholders as possible and specifically aiming at reforms (Box 4.5).

In Norway, there are mechanisms that correspond to principle-based reviews, including “Official Norwegian Reports”. These are produced by an expert commission appointed by the government or a ministry. Such broad-based reviews should be used for policy reforms effectively. For instance, the Official Norwegian Report on FDI screening mechanism published in 2023 provided a number of sound recommendations but has not succeeded in gaining broad attention or leading to policy reforms. Given the substantial obstacles faced by Norwegian businesses (Section 4.1.1), the authorities should consider carrying out a principle-based review focused on reducing regulatory burdens by setting up a formal mechanism specifically aimed at reform and engaging a wide range of stakeholders, following the example of other countries including Denmark (Box 4.5).

New regulation should aim to achieve policy objectives while minimising unnecessary costs, particularly in a context where the modernisation and simplification of the regulatory framework are required. The regulatory framework for introducing new regulation is more solid than that for existing regulation in Norway, but the distance from OECD best practice is actually larger in this area, according to the OECD iREG (Figure 4.11).

In Norway, there is a requirement to conduct a Regulatory Impact Assessment (RIA) in the development of all regulations. In doing so, multiple options are considered, including the baseline (i.e., no policy action), the preferred option, multiple regulatory alternatives for all primary laws – standards that are comparatively higher than in many other OECD countries. Multiple non-regulatory alternatives are also considered for some primary laws. Such considerations help reduce the risk of overlooking alternative, potentially more effective ways of achieving the desired impact, or of imposing unnecessary rules and burdens that may undermine it.

When conducting RIAs, both the costs and benefits of proposed regulations are assessed, and quantification is required in both cases in Norway – again representing higher standards than in many other countries. Moreover, RIAs in Norway comprehensively examine how new rules affect a range of aspects beyond direct costs and benefits for all primary laws. These include impacts on competition, small businesses, market openness, innovation and trade. The coverage is among the most extensive across OECD countries. Compliance costs, however, are considered only for some primary laws. Finally, broader assessments are lacking in Norway, as is also the case for ex-post evaluation, as there is no requirement to investigate macroeconomic and financial costs, which are examined in seven OECD countries including Finland and Sweden for at least all major laws.

RIAs should meaningfully inform regulatory design. This is the area in which Norway lags behind the OECD average and other Nordic countries. First, only some RIA results are published online in Norway, in contrast with all other Nordic countries where they all are. Second, RIAs are not publicly accessible through a central registry, which is the common platform across OECD countries, in contrast with most other Nordic countries. Moreover, decisions not to conduct a RIA are not made publicly available, leaving room for discretion in regulatory design. Importantly, the extent to which RIAs lead to modifications of regulatory proposals is not clear, as the effectiveness of RIAs in this regard has not been assessed according to the OECD iREG database. The authorities should consider increasing the transparency of the RIA process and ensuring that the results of RIAs are more systematically taken into account in regulatory design.

The governance structure plays an important role in ensuring both ex-ante and ex-post evaluations are conducted effectively. In Norway, line ministries propose new regulations and they are adopted by the Government (“the King in Council”). The Ministry of Finance oversees the Instructions for Official Studies (Utredningsinstruksen), which set the requirements for preparing regulatory proposals and conducting RIAs. The administration of the Instructions for Official Studies is delegated to the Norwegian Government Agency for Public and Financial Management (DFØ). The agency is responsible for providing guidance on how government entities must or may comply with the Instructions and how technical analysis should be conducted. Line ministries are also responsible for conducting ex-post evaluations. The requirements for ex-post evaluations are based on the Regulations for Financial Management (Økonomiregelverket).

Norway established the Better Regulation Council, a regulatory oversight body, as is the case in many other EU and OECD countries. In many instances, evaluations are most appropriately conducted within the ministries responsible for the relevant regulations, given their subject-matter expertise, familiarity with developments over the life of a regulation and access to relevant skills. However, the more “sensitive” a regulation is, and the more significant its economic or social impacts, the stronger the case for an arm’s-length or independent review process. Countries therefore often use standing bodies within government to conduct such reviews (OECD, 2020a), as is the case for the Better Regulation Council. In this respect, New Zealand has adopted a different approach by establishing a dedicated Ministry for Regulation, a central government agency with cross-government oversight responsibilities aimed at improving the quality of regulation, strengthening regulatory stewardship, and reducing unnecessary regulatory burdens (Box 4.6).

According to the Better Regulation Council, some RIAs were not sufficiently robust. The council assesses whether impact assessments have been carried out in accordance with the requirements of the Instructions for Official Studies and whether the impacts on the business sector have been sufficiently identified. The council issues non-binding written opinions, with each opinion concluding with a traffic-light rating, including a “red light”, which indicates that the proposal has not been adequately assessed. In 2024, the council issued 11 opinions with a red-light rating. Among recent cases, the council found the assessment of the amendment to the Tax Administration Act to be insufficient. According to the council, the authorities did not provide estimates of the administrative costs for firms to fulfil reporting obligations. However, given the non-binding nature of the council’s mandate, its opinion had little impact on the amendment to the Act.

The role of the Better Regulation Council is limited compared with that of regulatory oversight bodies in OECD best performers. The Council plays a role in regulatory design and stakeholder engagement, similar to regulatory oversight bodies in many other European countries. However, the Council does not have the authority to return RIAs for revision, in contrast with regulatory oversight bodies in 15 OECD countries. The Regulatory Scrutiny Board in the European Union often issues negative opinions on impact assessments and return them for revision if they do not include a clear comparison of regulatory options, including cost-benefit analyses for each (OECD, 2025f). In Norway, the Council also has no responsibilities for ex-post evaluation, neither in directly conducting evaluations nor in quality-controlling the ex-post evaluations undertaken by line ministries. By contrast, in slightly more than 33% of OECD countries, a body outside the government has responsibilities for reviewing ex-post evaluations.

Parliament decided in 2025 to wind down the Council, providing little justification for the decision. The Council has expanded its capabilities over time to comment on stakeholder engagement activities and to publish formal opinions on regulatory impact assessments for revision. The business community views the Council as a regulatory “watch dog”, considers it effective in assessing regulations and emphasises that its statements should be better reflected in regulatory outcomes (NHO, 2025). The decision to wind down the Council should be repealed. Thereafter, the Council’s mandate should be expanded so that it exercises effective influence in the design of new regulation, for instance, by allowing it to return inadequate RIAs for review, and in the ex-post evaluation process.

There are clear benefits to engaging stakeholders. They provide information about the impacts of rules as experienced in practice and help identify regulations or regulatory areas that are problematic. Stakeholder engagement at an early stage, i.e., before rules are drafted, is key to understanding policy problems and to identifying potential solutions. Such early-stage engagement takes place in Norway for some primary laws. In contrast, stakeholder consultation on draft primary laws, which opens the rule-making process to those directly affected, is systematically required, as in many other countries. Stakeholders should also be actively engaged in broader reviews (e.g., principle-based reviews; see above), as they help effectively identify regulatory burdens and detect adverse interactions across regulations (“public stocktakes”).

The setup for stakeholder engagement is overall robust. There is a complete online database of all regulations, which is up-to-date and freely available to the public in a searchable format. The government publishes online a list of primary laws to be prepared, reformed or repealed in the near term. Moreover, the minimum consultation period is set at six weeks, which is relatively long compared with other European countries. Thus, the public is sufficiently informed and has sufficient time to express its opinions. Stakeholders submit their statements, and the authorities decide how to reflect them in the final legislative proposal. Nonetheless, the contribution of stakeholder engagement to policy design is not clear, as publicly available information on stakeholder consultation is limited, including information on cases where draft regulations were revised as a result of stakeholder input. Importantly, the authorities are not required to respond to consultation comments, for instance by publishing a government response explaining how feedback was integrated into the final regulation.

While it is important to engage stakeholders actively, the lack of transparency and accountability in interactions between interest groups and policymakers risks tilting the playing field in favour of interest groups. In general, as governments across countries make greater use of industrial policies, policy reforms to check unregulated lobbying activity are becoming increasingly important to ensure that markets remain competitive and no undue advantage is given to better-endowed or more politically connected firms (Vitale and Bitetti, 2026).

However, the interaction between interest groups and public officials in the regulatory process is generally not regulated in Norway, as is also the case in other Nordic countries. Further, these interest groups are not required to register in a dedicated public lobbyist registry. Likewise, public officials are not required to make their agenda available online. They are not required to make publicly available the identity of those consulted during each regulatory process, which is a notable difference from all other Nordic countries where such requirements exist. There is no regulation specifically addressing conflicts of interest for appointed public officials or senior civil servants, although a cooling-off period after leaving office does apply to them. Moreover, advisory groups, which are more frequently involved in consultation on draft primary laws in Norway than in other countries, are not required to publicly disclose the names of their members.

In fact, although corruption is perceived to be low (Figure 4.12), lobbying is among the most vulnerable areas to public integrity in Norway (OECD, 2024); Figure 4.13). The Group of States against Corruption (GRECO) of the Council of Europe also notes that lobbying is among the few areas in which Norway has not fully implemented its recommendations (GRECO, 2025). According to GRECO, Norway needs further efforts to increase transparency regarding how top executive officials engage in contacts with lobbyists and other third parties seeking to influence governmental processes and decisions. In concrete terms, the information recorded on the conclusions of the meetings with lobbyists and other third parties needs to be routinely made public, identifying the persons with whom the meetings took place and the specific subject matter discussed.

Another vulnerable area to public integrity in Norway is conflicts of interest (Figure 4.13), to which the remaining recommendations by GRECO relate. Any member of the government, the Storting (Parliament) and the Supreme Court is obliged to submit an interest declaration, unlike appointed public officials and senior civil servants. However, according to GRECO (2025), there are no specific sanctions to ensure proper enforcement of the integrity system, including the applicable disclosure requirements. GRECO highlights the importance of introducing such specific sanctions and a formal system for review of the declarations.

The overall firm entry rate is high but has been on a declining trend, and the contribution of young high-growth firms has weakened in Norway. Ensuring market entry of prospective new firms is essential for facilitating more effective learning from the global frontier as such firms have the comparative advantage in adopting and commercialising new technologies, and they help maintain market discipline, boosting competitive pressure on incumbents to innovate (OECD, 2015; Saia, Andrews and Albrizio, 2015). Finally, stringent regulation of foreign direct investment (FDI) and international trade can also act as entry barriers insofar as they restrict the establishment of foreign affiliates and mute the productivity enhancing effects of international competition. The impact of such restrictions may be disproportionately large, as foreign firms investing abroad tend to be at the technological and productivity frontier.

In Norway, the scope to reduce administrative and regulatory barriers to market entry is greater than in many other OECD countries (Figure 4.2; Panel B). Entry barriers are distinct in nature because they inherently discriminate against new entrants, whereas ongoing compliance costs and administrative burdens apply to all businesses. However, compliance costs may weigh disproportionately on entrants and young firms. When reviewing stringent entry barriers as part of ex-post regulatory evaluation, the authorities need to assess whether the related requirements remain valid in terms of their rationale, whether they are effective and efficient and whether alternative policy options should be pursued (see above).

The number of procedures and the number of public bodies that must be contacted in order to start a company remain large. Company registration is streamlined through the “Coordinated Register Notification”, managed by the Brønnøysund Register Centre, which submits information to the Central Coordinating Register for Legal Entities, the Register of Business Enterprises, the Norwegian Labour and Welfare Administration, Statistics Norway and the Norwegian Tax Administration. However, separate registration is still required for VAT and employees. Overall, registration requirements are relatively high compared with other Nordic countries. There is scope to streamline these procedures. For instance, the register of the employees at the Ministry of Labour, which is not required in other Nordic countries, could be removed or integrated with other procedures. Likewise, registration of employees in an insurance scheme can be consolidated with other procedures, as is the case in Denmark and Sweden.

Despite some complexity at the legislative level, administrative procedures are facilitated through a single web portal called “Altinn” (Box 4.7). The portal is managed by the Norwegian Digitalisation Agency and provides entrepreneurs with information on the procedures required to start a company. Moreover, the information is classified by economic activity, allowing entrepreneurs to access easily what is relevant to them. Importantly, Altinn also serves as a single point of contact through which entrepreneurs apply for many (though not all) licences. In this fully digitalised process, the entrepreneur uses a common identification number throughout all applications, which avoids unnecessary duplication.

In practice, however, the overall reporting burdens remain large. As firms often need to introduce reporting tools and hire accountants in practice (see above), such reporting obligations are considered to be an effective entry barrier. To reduce them, coordination among authorities needs to be strengthened so that information reported by firms is effectively used for multiple purposes. In this respect, the Storting adopted a decision in March 2026 to ensure the implementation of the “once-only principle” (i.e., reporting obligations cannot be imposed when the same information has already been submitted to public authorities). This decision needs to be effectively rolled out. Going further, a study commissioned by the Ministry of Finance (Schwencke, 2019) argued for making it possible for small limited liability companies to submit integrated reporting that would provide relevant data for both the annual financial statement and tax return, with appropriate adjustments (e.g., valuation methods) applied within the administration. The authorities should consider the introduction of such a single data submission.

The business licence system in Norway is more complex than in many other OECD countries (Figure 4.14). Licences and permits refer to regulatory tools and processes that provide formal ex-ante approval. As an ex-ante intervention, licences and permits differ from other regulatory tools in that they focus on risk prevention before an activity begins, blocking or allowing market entry or the start of operations, rather than regulating ongoing operations or addressing issues after they arise. Licences and permits should be used in a risk-proportionate way, i.e., when activities are high risk and ex-ante conditions and safeguards are essential for risk mitigation. These include cases where the probability of serious harm is high, where potential harm would be significant and irreversible, and where risks need to be managed even before operations commence (OECD, 2025g).

Currently there is no requirement that a new licence introduced by the government has to be risk-proportionate. This contrasts with Denmark, Finland and Sweden, where such a requirement exists for all or most licences. The authorities should consider a more graded regulatory response - one which is proportionate to the level of risk posed by a business or activity. When the probability of harm is low or when any potential harm is reversible or low impact, alternative options such as notifications or reporting requirements should be used instead (OECD, 2025g). Such an approach would help avoid over-reliance on licences and permits and would contribute to simplifying the licence system by ensuring only strictly necessary processes and information obligations are imposed, and that licences and permits are standardised for clarity and efficiency.

In Norway, there is no requirement for the authorities to regularly review existing licences. Periodic risk assessment is crucial to ensure that licences and permits continue to achieve their intended objectives in changing circumstances (OECD, 2025g). As with regulation more broadly, the policy objectives behind the use of licences and permits may be difficult to identify or may become outdated. Periodic review of existing licences should therefore be undertaken. Although the government keeps an up-to-date inventory of licences required for businesses, this is managed by various bodies. Consolidating these inventories into a single body, as in many OECD countries including Finland and Sweden, would make it is easier for the government to conduct periodic assessments of existing licences and permits.

The lack of a risk-proportionate approach is also reflected in the use of periodic licence renewals. In Norway, a number of licences issued by public bodies, mostly related to workplace security such as fire and electricity usage, have to be periodically renewed. There is basically no such requirement in any other Nordic country. While time-limited licences may be appropriate in specific contexts, overuse of this approach creates unnecessary burden. In most cases, compliance can be more effectively ensured and addressed through inspections and enforcement mechanisms. Necessary measures to manage risks can still be requested from licence holders without imposing mandatory periodic license renewals (OECD, 2025g).

Most barriers to efficiency in licensing stem from a lack of institutional coordination, along with legal or procedural complexities (OECD, 2025g). Efficient coordination requires the participation of all actors involved in licensing from high-level strategy makers to operational roles, and across all levels of government. This helps ensure alignment of approaches, methods and requirements, while minimising duplications, overlaps or gaps in information collection and the management of licencing processes (OECD, 2025g). As the coordination across different levels of government is not strong in Norway, engaging local authorities in establishing common policy objectives and harmonising risk assessments would help streamline licences and permits and their requirements.

Stringent regulations in key upstream sectors further weigh on business dynamism, affecting productivity developments in downstream sectors (Bourlès et al., 2013; Andrews et al., 2025). Despite the overall high firm entry rate in Norway (Figure 4.7), entry rates vary significantly across sectors (Figure 4.15). Sector-level entry rates in Norway are lower than the EU average in the following sectors: electricity and gas, financial services and transportation services. One possible explanation is relatively high entry barriers in these sectors due to regulation. In fact, sector-level regulation is relatively stringent in the electricity and gas sector as well as the transportation sector compared with other Nordic countries, according to the OECD PMR indicators (Figure 4.16).

In some transport sectors, the requirements to obtain a licence appear disproportionately restrictive. The optimal level of regulatory requirements for new firms varies across transport sectors, depending on the risk associated with the services provided. In general, licensing is necessary in rail and air transport sectors. However, requiring a licence in the road freight sector as well as water freight and passenger sectors is considered stringent, according to the OECD PMR scoring system. In Norway, a licence is required to establish a firm in the road freight and water passenger sectors, while notification suffices in the water freight sector. In contrast, only notification is required in around 33% of OECD countries including Finland and Sweden in the water passenger sector and in around 5% of OECD countries in the road freight sector.

Moreover, the requirements to renew licences also appear disproportionately restrictive in some sectors. Among others, the provision of road freight transport services is a standardised and limited-risk activity and, as such, it should not be subject to licence renewal requirements. In Norway, such licence renewal requirements exist in this sector. In contrast, around 35% of OECD countries where licensing exists do not impose such licence renewal requirements, including Sweden. Maintaining standards and compliance can be ensured by ex-post enforcement, such as inspections and levying fines. In addition, providers of long-distance domestic passenger transport services by coach are not able to freely choose routes, which are subject to approval by the Ministry of Transport. In 24% of OECD countries, carriers are free to choose their routes, including Finland and Sweden.

Licensing requirements become more complex when the authorities need to reconcile potentially conflicting objectives and when coordination problems arise across agencies. An illustrative example is the development of power stations, as this is the sector in which industry-specific regulations are perceived to be particularly restrictive (Section 1.2). According to THEMA Consulting Group, developing a new hydropower station takes 10-12 years, of which 6-8 years are spent on licensing (with project screening and construction accounting for the remaining time). In the case of onshore wind power stations, development takes 7-9 years, of which around 5 years are spent on licensing. These lead times are significantly longer than those in Denmark and Finland, according to the study by Osloeconomics and Sweco (2022).

The long lead times are largely due to licensing procedures, impact assessments and administrative processes. The installation of a large hydropower plant is subject to the Energy Act, as well as the Watercourse Regulation Act and the Water Resources Act (Box 4.8). Power plants exceeding a certain capacity threshold are also subject to an Environment Impact Assessment (Box 4.8). In these processes, numerous authorities are involved. Moreover, under the Planning and Building Act, municipalities are responsible for zoning plans (reguleringsplaner) and granting building permits. As discussed in the last Economic Survey of Norway, licensing requirements are strict and should be alleviated. To do so, the process can be streamlined by expanding the scope of cases in which decision-making power is delegated from the Ministry of Energy to the Water Resources and Energy Directorate, instead of requiring assessments by both public bodies, in the case of large hydropower plants.

Regarding onshore wind power, coordination problems across different levels of government were partly solved by a reform in 2023. Previously, developers first applied for a national licence and then obtained the municipal permit thereafter. Thus, after the national licence was granted, it did not become valid until the municipal permit was approved. However, since July 2023, the order of approval has changed: a wind power project must first be clarified through a municipal zoning plan under the Planning and Building Act before a national licence can be granted. While this amendment aims to increase predictability and reduce lead times. In practice, the decisions made by municipalities often blocked the development of new plants. While new industrial and energy projects in Norway often face strong local opposition, such decisions likely reflect a wide range of concerns beyond zoning. Norway may consider introducing guidelines or criteria to guide municipal decisions on the establishment of new power plants.

Stringent regulation of foreign direct investment (FDI) and international trade also weighs on business dynamism and limits growth opportunities. Trade openness leads to stronger product market competition, which in turn promotes innovation and productivity-enhancing reallocation via the expansion of the most productive firms into foreign markets and the exit of low-productivity firms (Melitz, 2003; Melitz and Ottaviano, 2008). Moreover, trade and FDI enhance knowledge flows from global customers and suppliers (Crespi, Criscuolo and Haskel, 2008) and from the activities of multinational firms (Criscuolo, Haskel and Slaughter, 2010). The FDI inflow stock in Norway remains very limited for a small economy (Figure 4.17), which can be associated with stringent regulation on FDI.

Regulations on the establishment of foreign affiliates in Norway are relatively stringent. Services are increasingly traded across borders, including digitally and through the establishment of local affiliates abroad such as subsidiaries and branches. The effects of such regulations, measured in terms of ad valorem trade cost equivalents, are found to be substantial (Nordås and Rouzet, 2015; Benz, 2017). These effects are generally stronger in small countries (OECD, 2017) and for smaller firms (Rouzet, Benz and Spinelli, 2017). According to the OECD Services Trade Restrictiveness Index (STRI), restrictions on services trade are relatively strong in Norway (Figure 4.18), primarily due to horizontal regulations applying across sectors (OECD, 2026); most of these relate to the establishment of foreign affiliates.

The category “restrictions on foreign entry” in the OECD STRI assesses regulations largely related to the commercial presence of foreign firms, which is the most important mode of services trade. The OECD STRI examines the proportion of shares that can be acquired by foreign investors in publicly-controlled firms. In Norway, the number of sectors subject to such restrictions is much larger than in many other OECD countries. This directly reflects the fact that there are more sectors in which the government owns at least one major firm, which can be perceived as an effective barrier for foreign firms. For instance, foreign firms may have limited incentives to form partnerships with the government in the Norwegian market. Related to government intervention more broadly, many investors increasingly expect government subsidies in Norway. Foreign firms may perceive it as difficult to obtain such subsidies on an equal footing with domestic firms.

In Norway, a majority of company board members and directors are subject to residence requirements, which in practice targets foreign firm entry. No other OECD countries impose such restrictions systematically across all sectors except Belgium, Iceland and Sweden. That said, such restrictions exist in a few sectors in several countries. One possible explanation is that these requirements aim to facilitate law enforcement when managers and directors must be held responsible for any harm their companies cause if they are residents, as is the case in Iceland (OECD, 2025h). However, if that is indeed the objective, the residence requirements appear disproportionately restrictive with respect to the policy goal. The authorities should clarify the purpose of these requirements and repeal or modify them as appropriate.

Under current legislation, FDI screening applies without exclusion of economic interests in Norway. Since 2019, a new investment screening mechanism covers investments in companies critical to national security and financial stability (National Security Act, Law No. 24/2018). An amendment in 2023 (Law No. 77/2023) broadened the scope of the act to include businesses vital to national or security interests, even if they are not directly linked to a basic national function. In 2024, the European Commission proposed a new regulation to strengthen the existing framework. The proposal requires all EU Member States to establish and maintain a screening mechanism and to define a minimum sectoral scope for screening foreign investments. Danish legislation identifies the defence sector, IT security, dual-use items, critical technologies and critical infrastructure as sensitive areas. The Norwegian authorities should consider whether following this example to define a minimum sectoral scope is appropriate. A recent report, submitted by an expert commission to the Ministry of Trade, Industry and Fisheries in 2023 identified challenges in the current system, and highlighted the needs of clarifying the mandatory notification requirement.

Rights of access to public procurement are limited to suppliers from EEA countries and from countries with which Norway has an agreement based on the principle of reciprocity. In Norway, there is an obligation to include a clause in the contract mandating Norwegian wages and working conditions as stated in collective agreements. For contracts that are performed in Norway, the successful bidder may also be required to take on apprentices. Such obligations related to public procurement are not common in the OECD. The rationale in Norway is to prevent social dumping and work-related crimes, which is unclear or appears disproportionate, and to increase the availability of skilled labour in shortage – an issue that should be addressed through strengthening formal VET programmes, including through partnerships with private firms, rather than limiting such requirements solely to public procurement contracts.

Rigid insolvency regimes hamper the efficient restructuring of firms facing temporary difficulties and the exit of non-viable firms. Preserving unproductive firms and hampering the efficient reallocation of resources from failed enterprises to productive firms reduce aggregate productivity growth (Caballero, Hoshi and Kashyap, 2008; Adalet McGowan, Andrews and Millot, 2017). Importantly, insolvency regimes that disproportionately penalise failed entrepreneurs discourage risk-taking behaviour (Bartelsman, Perotti and Scarpetta, 2008), thereby weighing on the entry and expansion of prospective firms (Calvino, Criscuolo and Menon, 2016).

Reforming insolvency regimes to sort out viable firms and restructure them successfully would reduce the frequency of prospective firms exiting the market prematurely (Figure 4.9). Mjøs, Kostøl and Pelja (2021) found that firms filing for insolvency tend to have recorded higher growth over the years prior to filing. They also showed that, when comparing firms kept as going concerns with those that were liquidated, operating profit over sales was almost identical on average immediately prior to filing. However, the financial situation in the liquidated firms was significantly worse (e.g., a higher debt-to-asset ratio). This indicates that liquidation was more often the result of excessive risk-taking than weak underlying profitability, implying that at least some of the firms were liquidated prematurely.

In general, insolvency regimes involve many stakeholders with different views. Insolvency regimes face a number of market imperfections, notably:

• Information asymmetries, as the debtor and creditors assign different values to the firm (Smith and Strömberg, 2005);

• Incomplete contracts, as it is difficult to write a complete contract ensuring an optimal outcome ex-ante (Hart, 2000); and

• Coordination problems, as the interests of individual creditors can conflict with those of creditors as a collective (Marinč and Vlahu, 2012).

Against this background, striking the balance in terms of the rights of the debtor and creditors is difficult.

According to official data from the Brønnøysund Register Centre, around 30 800 firms were struck off from the business registry in 2025. Of these, around 21% were deregistered due to liquidation, including “compulsory liquidation” (i.e., the court orders liquidation immediately if the firm fails to meet statutory conditions, for example due to poor bookkeeping), while the vast majority were struck off from the registry as a result of voluntary dissolution. According to court statistics used in Mjøs, Kostøl and Pelja (2021), the share of firms filing for insolvency evolved at around 2% toward the end of the 2010s, down from around 3% at the height of the global financial crisis.

According to figures compiled by Mjøs, Kostøl and Pelja (2021) over the period 2010-19, most insolvency proceedings end with liquidation rather than restructuring. First, out of a total 20 413 insolvency proceedings, the court ordered compulsory liquidation in around 30% of cases, related primarily to SMEs. Among all the insolvency proceedings, 89.9% were terminated due to the lack of assets of the debtor, mostly SMEs, followed by distribution of the debtor’s assets (7.2%) and return to normal operation (2.9%). Along with these 20 413 insolvency proceedings, there were also seven openings of “compulsory composition” (formal restructuring plans) and nine openings of voluntary debt negotiations over the same period. The number of cases in which firms were restructured is excessively limited, which could possibly be related to obstacles in the legislative framework for firm restructuring. Indeed, according to the OECD Insolvency Indicator, Norway has scope to improve measures in the area of barriers to firm restructuring (Figure 4.19).

In Norway, a temporary act was introduced during the COVID-19 pandemic crisis in early 2020 (Reconstruction Act, No. 38/2020), replacing the permanent legislation (Debt Negotiation and Bankruptcy Act, No. 58/1984) with respect to debt negotiations. The temporary act aimed to reduce the risk of unnecessary liquidation of viable businesses experiencing an acute decline in revenues due to the crisis and to increase the chance of successful restructuring processes in viable companies. According to the authorities, the number of restructuring procedures initiated has likely increased somewhat following the introduction of this temporary act. The Ministry of Justice published a proposal (Prop. 56 L (2025–2026) Amendments to the Bankruptcy Act, etc. (reconstruction proceedings)) to replace the existing rules on restructuring procedures set out in the 1984 Act and the 2020 temporary act. Policy reforms are discussed below, mainly reflecting the changes introduced by the temporary act and those introduced under the proposal.

While it is difficult to strike the right balance in terms of the rights of the debtor and creditors, insolvency proceedings in Norway too often end in liquidation rather than restructuring (Thorburn, 2020; Mjøs, Kostøl and Pelja, 2021). According to Thorburn (2020), there has been little protection of debtor firms, their operations cease immediately as suppliers stop delivering, secured creditors abruptly seize collateralised assets, and debtor firms are typically liquidated piecemeal.

Starting insolvency proceedings early is crucial, as it increases the possibility of successfully restructuring viable firms and the liquidation value of failing firms (Adalet McGowan and Andrews, 2016). Debtors tend to delay the commencement of proceedings, as they may hide or cannot recognise the true financial state of their firm. In the vast majority of OECD countries, both debtors and creditors can initiate liquidation and restructuring proceedings. Previously, creditors in Norway could not file for restructuring. Due to the temporary act introduced in 2020, creditors can now also file for restructuring. In the new proposal, this measure is preserved, which would help initiate restructuring proceedings in a timely manner and prevent the value of the debtor’s assets from being lost over time.

Once the proceedings begin, it is key to determine who will manage the debtor’s assets. Allowing incumbent managers to stay in charge of day-to-day operations (“debtor-in-possession” model) has conflicting effects (Adalet McGowan and Andrews, 2016). Managers may have weak incentives to avoid insolvency if they know they can maintain control, thereby reducing ex-ante efficiency. Conversely, if they expect to be removed when the firm becomes distressed, they may have incentives to hide the true financial state of the firm, reducing ex-ante efficiency. Once the proceedings begin, allowing incumbent managers to stay in charge tends to raise the chance of successful restructuring because they possess specialised knowledge of the firm, thereby raising ex-post efficiency. On balance, it is considered unfavourable to automatically dismiss the incumbent manager from a practical standpoint (Adalet McGowan and Andrews, 2018). In Norway, although incumbent management is not dismissed, their management of day-to-day operations is heavily supervised by the “reconstruction committee”, which consists of an insolvency practitioner appointed by the court and creditors’ representatives. While the insolvency practitioner is usually a lawyer, Mjøs, Kostøl and Pelja (2021) suggest that professionals with business experiences such as auditors should take control of operations, assisted by the lawyer, rather than the other way around.

Continuous operations in the debtor company during proceedings increase the chance of successful restructuring (“stay on assets”). Without a stay on assets, firms' operations can be disrupted by creditors claiming productive assets, thus reducing the value of keeping the firm in operation. On the other hand, restrictions on creditors’ claims can adversely affect credit supply (Armour and Cumming, 2008). Therefore, the stay on assets should be time-limited and used strictly to facilitate a restructuring plan (Adalet McGowan and Andrews, 2016). In many OECD countries, including Denmark and Sweden, a stay on assets is permitted and limited in time. As best practice, which balances the interests of the debtor and creditors, the duration of a stay on assets should range between two and four months (Carcea et al., 2015). In Norway, a stay on assets is possible for six months under the temporary act of 2020, which can be extended under certain conditions. No change is foreseen in the new proposal in this respect.

Beyond limiting individual enforcement actions by creditors, several other aspects are key to ensuring continuous operations during restructuring negotiations. In Norway, the insolvency framework allows the debtor company to reject overly burdensome contracts. It also allows the debtor company to avoid transactions that give preference to one or several creditors as well as undervalued transactions entered into before the commencement of insolvency proceedings. The temporary act of 2020 also introduced the possibility of maintaining pre-filing relationships with key suppliers of goods and services deemed critical to the survival of the business. It is important to allow debtor companies to continue payments to critical suppliers so that daily operations are not halted or disrupted (Thorburn, 2020; Mjøs, Kostøl and Pelja, 2021). The new proposal confirms this provision, which is welcome.

It is crucial that the debtor is allowed to obtain new credit after restructuring proceedings begin to meet ongoing needs. However, post-commencement financing should not have priority over existing creditors, which would harm legal certainty and negatively affect credit supply by increasing banks’ perceived risks (Adalet McGowan and Andrews, 2016). According to best practice, post-commencement credit should take priority only over ordinary unsecured creditors, not over secured creditors (Adalet McGowan and Andrews, 2016). In Norway, the temporary act of 2020 introduced the possibility of new financing and gave priority to the new credit over both secured and unsecured creditors. Both encumbered and unencumbered assets of the debtor can guarantee new financing after obtaining consent or approval from secured creditors. The new proposal confirms this higher priority for post-commencement credit. The authorities explain that there has been no evidence of adverse effects on credit supply following the change made in 2020. The amount of new financing benefiting from priority is partly limited through a statutory lien mechanism, typically capped at 5% of the value of the collateral. In addition, the framework allows new financing to be secured by super-priority security over certain asset classes, such as operating equipment, inventory and receivables, which may rank ahead of existing secured creditors without a fixed monetary cap.

Timely and efficient decision-making is essential in restructuring proceedings. In this respect, the possibility of so-called “cram-down”, allowing approval of a restructuring plan by only a requisite majority of creditors, instead of requiring unanimity, is key. In Norway, cram-down is possible, allowing a restructuring plan to be imposed on dissenting creditors by a majority vote. The temporary act of 2020 even reduced the threshold for approval to 50% of total claims, down from two-thirds previously, and removed the condition that at least 25% of the debtor’s outstanding liabilities must be distributed. According to the authorities, this change was one factor that may have contributed to an increase in the number of restructuring proceedings initiated following the temporary act. The new proposal maintains this lower threshold to reach an agreement. The coverage of cram-down is currently limited to payment deferrals and debt write-downs and does not apply to conversion of debt into equity. Going forward, voting on debt-to-equity conversion could also be envisaged (Mjøs, Kostøl and Pelja, 2021).

According to best practices for cram-down, creditors in the same class should be treated equally, and dissenting creditors should receive at least as much under a restructuring plan as they would under liquidation (Carcea et al., 2015). These safeguards help ensure that restrictions on creditors’ rights do not adversely affect credit supply. In Norway, creditors are not divided into classes for the purpose of voting on the reorganisation plan, which may hamper the efficient adoption of restructuring plans, as individual creditors’ incentives may differ across classes. Furthermore, there is no such safeguard ensuring that dissenting creditors receive at least as much as what they would in liquidation. The new proposal aims to reform these aspects. First, it aims to allow creditors to vote separately according to their priority class. Second, the new proposal aims to introduce the safeguard to protect the rights of dissenting creditors.

The treatment of liabilities to public authorities can alter the course of insolvency proceedings. The fact that such liabilities are not dischargeable often make parties unwilling to start proceedings. The temporary act of 2020 introduced derogations allowing restructuring plans to override the super-priority ranking of these liabilities. According to the authorities, this was another main factor that may have contributed to the increase in the number of restructuring procedures initiated following the temporary act. The new proposal introduces a permanent framework under which specific categories of public liabilities can be formally included in restructuring plans and potentially reduced. At the same time, the proposal does not continue the broad temporary derogations from the statutory priority system, replacing them with more targeted and clearly defined rules. Public claims retain their high priority in liquidation, which serves as a benchmark in restructuring, but they are not fully protected from adjustment within a confirmed plan. Compared with the EU restructuring directive, which allows greater flexibility in the treatment of creditor classes and in deviating from strict priority, the Norwegian approach remains more structured and rule-based. This may strengthen predictability, but could also limit flexibility in negotiations where public claims are significant.

A similar asymmetry exists between the treatment of liabilities owed to employees in restructuring proceedings and that in liquidation proceedings. In liquidation proceedings, such liabilities, essentially unpaid salaries, can be reduced for the debtor company through a state-financed guarantee system that protects employees when their employer becomes insolvent. This guarantee does not apply in restructuring proceedings, where liabilities owed to employees must be paid in full by the debtor company. This can constitute a significant obstacle to successful restructuring proceedings and, at any rate, creates a bias towards liquidation. The authorities should therefore consider extending this wage guarantee to cases of firm restructuring (Mjøs, Kostøl and Pelja, 2021).

Finally, the institutional setup can also affect the effectiveness and efficiency of insolvency proceedings. Given the complexities involved in insolvency cases, including assessments of business viability, valuation, creditor incentives and labour‑market effects, generalist judges may find it difficult to develop the necessary expertise. In this context, introducing specialised insolvency courts would improve economic outcomes by reducing large and arbitrary variations in judicial decisions that currently arise in generalist courts. (Mjøs, Kostøl and Pelja, 2021) show that random assignment to stricter or more lenient judges leads to markedly different firm survival and employment outcomes, thereby undermining legal certainty. Specialised courts would improve consistency, predictability and value preservation, particularly by reducing inefficient liquidations. The authorities should consider introducing such specialised courts for insolvency.

Personal insolvency regimes are often more important for entrepreneurs and small businesses (Armour and Cumming, 2008). Entrepreneurs typically use personal finances prior to incorporating and receive only limited liability protection (Berkowitz and White, 2004; Cumming, 2012). As small businesses are often owned and operated by families who have pledged personal assets for loans, business insolvency may lead to personal insolvency once a business fails, even where the business is run by a separate legal entity (Bergthaler et al., 2015). In Norway, it is common practice to use such personal guarantees, which applies not only to sole proprietors but also, in some cases, to the owners of limited liability companies.

Personal insolvency regimes should not be excessively penalising, to allow a fresh start after bankruptcy (Adalet McGowan and Andrews, 2016). Excessively penalising personal insolvency regimes could also delay proceedings, as debtors seek to avoid being declared bankrupt. In this regard, exempting the bankrupt’s assets that are not directly linked to the business is important. In Norway's personal bankruptcy regime, exemptions of pre-bankruptcy assets from the bankrupt estate are more generous than in many OECD countries, as they include the bankrupt’s house (subject to the conditions that the house is the bankrupt’s primary residence and its value is below a specified threshold). In many OECD countries, such exemptions are limited only to modest personal items, such as assets or income required for the debtor’s subsistence.

Nonetheless, the possibility of a fresh start is excessively limited in Norway. The exemption of future earnings from obligations to repay pre-bankruptcy debts – the so-called "availability of discharge" – reduces the debtor’s burden. In Norway's personal bankruptcy regime, the procedure for discharge is complex and lengthy. In legislative terms, there is no possibility of discharge. In practice, the bankrupt may negotiate with lenders but need to wait two years before applying for debt settlement, and the debt settlement can be granted only five years after the bankruptcy ruling. This is far more penalising than in most OECD countries, where the time to discharge is around two years on average. The authorities should establish a simpler discharge procedure and reduce the time to discharge to two years, in line with peer countries and as recommended by the EU Directive on Restructuring and Insolvency. The new proposal aims to make it possible to restructure liabilities for natural persons in a manner similar to that for businesses. However, this provision differs from the discharge for the bankrupt, as it would be limited to individuals with a high chance of successful debt restructuring.

Denmark pioneered modern insolvency reform and influenced the discharge regimes that spread across Europe, laying the groundwork for the EU’s second‑chance and early‑intervention policy agenda. The Danish 1984 Consumer Debt Adjustment Act introduced structured debt reduction and discharge to curtail wasteful collection efforts and maximise creditor returns over a reasonable horizon. Subsequent reforms – notably in 2005 and major updates to the Bankruptcy Act in 2021-22 – strengthened judicial restructuring and, through the transposition of the EU Directive, introduced a preventive restructuring procedure.

Over recent years, the policy debate has focussed on enhancing insolvency prevention and developing pre-insolvency and simplified insolvency procedures for SMEs (André and Demmou, 2022). It is in these areas that reforms have advanced most significantly across OECD countries over the past decade. SMEs face a higher probability of going through insolvency proceedings, as the share of non-viable firms is higher among SMEs than among large companies (Banerjee and Hofmann, 2020). However, SMEs need differentiated treatment, as they often have limited financial resources while insolvency proceedings can be lengthy and costly. Other obstacles include poor record-keeping, which hampers successful restructuring. Furthermore, the value of assets at stake is generally low and creditors tend not to devote sufficient attention to SME cases.

In Norway, a special insolvency scheme for SMEs was introduced in 2020 (Regulation No. 1247/2020). It established specific fast-track and less expensive restructuring procedures for SMEs with 10 or fewer employees and earning less than NOK 6 000 000. Under this system, in-court procedures were pre-packaged. However, payment of administrative expenses by instalments, typically permitted in many OECD countries, were not possible. Importantly, there was no possibility of a cram-down on dissenting creditors. There is no evidence that these special procedures were used extensively. These special proceedings for SME, introduced in the aftermath of the crisis, were wound down in January 2025 as initially foreseen, albeit with delay.

The new proposal does not prescribe any specific special regimes for small businesses but encourages the authorities to explore the introduction of such regimes. The government should re-introduce such simplified and pre-packaged proceedings targeting SMEs. In doing so, they should first make such proceedings easier by allowing instalments in the payment of administrative expenses and introducing a business recovery mediator, as seen in some OECD countries. These measures would be particularly relevant in Norway, where many small businesses were compulsorily liquidated by the court due to insufficient accounting practices and failure to meet statutory requirements (see above), thus helping prevent some firms to be liquidated prematurely. Furthermore, the enforcement of decisions made by a requisite majority of creditors should be introduced and strengthened, which would encourage creditors and debtors to try to reach voluntary agreements at an early stage, following the example of the new special procedure introduced recently in the United States (Box 4.9).

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