Norway (officially the Kingdom of Norway) is a prosperous, democratic country in Northern Europe, located mainly at the western portion of the Scandinavian Peninsula.Norway has a very high standard of living, a low level of corruption, and a high level of education and health care. Norway has achieved these highest standards of living in the world partially by having a large amount of natural resources compared to the size of its population.
Norway has mixed economy with free market activity and large state ownership in certain key sectors (for example, in petroleum sector, hydroelectric energy production, aluminium production, telecommunications and banking).
Banking sector in Norway is dominated by domestic commercial and regional savings banks, with a number of foreign-controlled banks from Western and Northern Europe.
1 EUR = 9.7665 NOK (2017-12-08)
During the last 11 years EURNOK exchange rate was within the range 7.2925 - 9.7500, reaching its maximum in Dec 2008 and falling to its minimum in Aug 2012.
Chart 1. Euro to Norwegian krone (EURNOK). Source: ECB.
|Nominal GDP (2016)||Nominal GDP per Capita (2016)||Real GDP Growth (2016)|
|334.9 bln EUR (-0.05%)||64 000 EUR (-0.06%)||1.0 % (2015: 1.6 %)|
According to Eurostat, nominal GDP of Norway in 2016 was 334.9 bln EUR.
Norway underperforms the European Union in terms of real GDP growth with the average annual differential coming to -0.1% over the past 10 years (2006 - 2016). In 2016 real GDP growth was 1.0% which was below the Euro Area average (1.8%) and below the European Union average (1.9%). Real GDP growth in 2017 - 2022 are IMF's estimates.
Chart 2. Real GDP Growth in Norway. Source: Eurostat, International Monetary Fund.
In 2016, nominal GDP per capita in Norway was 64 000 EUR.
Norway has an above-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, exceeded that of the European Union by 62.8% over the past 10 years (2006 - 2016). GDP per capita at PPP in 2017 - 2022 are IMF's estimates.
Chart 3. GDP Per Capita at Purchasing Power Parity in Norway; European Union = 100.
|CPI, MoM (Sep 2017)||CPI, YoY (Sep 2017)||CPI, Year Average (2016)|
|0.7 % (Aug 2017: -0.8 %)||1.6 % (Aug 2017: 1.3 %)||3.9 % (2015: 2.0 %)|
According to Eurostat, inflation rate in Norway in 2016 expressed as annual percentages of average consumer prices was 3.9% which was above the Euro Area average (0.2%) and above the European Union average (0.3%). Inflation rates in 2017 - 2022 are IMF's estimates.
Chart 4. Inflation Rate in Norway. Source: Eurostat, International Monetary Fund.
|Unemployment Rate (2016)|
|4.7 % (2015: 4.4 %)|
|AAA (highest credit quality), outlook stable||Aaa (prime), outlook stable|
Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.
Withholding tax rates applied on payments of interest and dividends in Norway are shown in Table 1.
|Natural person, resident||0.0 %||0.0 %|
|Natural person, non-resident||25.0 %||0.0 %|
Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.
Norway signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Norway and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 1 January 2013 of signing the agreement is given in brackets):
There are 3 ways for jusrisdictions to exchange information on tax matters:
Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.
Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.
Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.
Norway signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Norway and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 1 January 2013 of signing the agreement is given in brackets):
Norway signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.
Norway has signed bilateral agreements with 54 jurisdictions to automatically receive information:
Norway has signed bilateral agreements with 68 jurisdictions to automatically send information:
Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).
|FATCA Status in Norway|
|IGA in effect since 15 April 2013, Model 1|
Norway has FATCA agreement with the U.S. in effect since 15 April 2013 (Intergovernmental Agreement Model 1). Financial institutions operating in Norway are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: Norwegian financial accounts hold in U.S. financial institutions will be reported to Norwegian authorities.
|Financial Market Development|
|5.2 (max 7.0), 9th out of 138 countries|
|6.3 (max 7.0), 8th out of 138 countries|
According to World Economic Forum's Global Competitiveness Report 2017-2018, financial market development in Norway is scored 5.2 out of maximum 7.0 and ranked 9th out of 138 analysed economies, trustworthiness and confidence of financial market is scored 5.3 (18th place).
Chart 5. Financial Market Development in Norway. Source: WEF.
Soundness of banks is scored 6.3 bringing Norway into the 8th place.
Chart 6. Soundness of Banks in Norway. Source: WEF.
|Maximum Protected Amount|
|2 000 000 NOK|
Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.
From a depositor's point of view it is important to know:
All these details about deposit guarantee scheme in Norway are summarised in Table 2.
|Scheme Participants||all credit institutions operating in Norway, branches of non-EEA banks, branches of Norwegian banks abroad|
|Scheme Exemptions||branches of EEA-banks (covered by their home countries)|
|Eligible Depositors||natural persons, legal entities|
|Covered Accounts||any credit balance on a named account, and any debt evidenced by a certificate of deposit issued to a named person|
|Maximum Protected Amount||2 000 000 NOK|
|Paid In Currency||NOK|
Table 2. Deposit guarantee scheme in Norway.
EEA stands for European Economic Area and consists of all EU member states plus Liechtenstein, Norway and Iceland.
Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.
|Local Currency (Norwegian krone)||Foreign Currency|
|Aaa (prime)||Aaa (prime)|
Local currency (Norwegian krone) deposit ceiling for Norway is set to Aaa (prime), foreign currency deposit ceiling is Aaa (prime).
|Number of Banks|
|Consolidated Assets (2016)|
|3 626.39 bln NOK (+5.38%)|
|Recent Changes (2016)|
|new banks: 5, closed banks: 4|
Currently there are 172 credit institutions operating in Norway.
In 2016 consolidated banking assets in Norway were 3 626.39 bln NOK. The consolidated banking assets' evolution is shown at Chart 7 below.
Chart 7. Consolidated banking assets in Norway.
Recent structural changes (2013 - 2016) of the banking sector of Norway are summarised in Table 3.
|Number of Opened Banks||2||2||3||5|
|Number of Closed Banks||3||2||2||4|
Table 3. Recent structural changes in the banking sector of Norway.
The list of the most recently opened banks in Norway is provided in Table 4.
|MARITIME & MERCHANT BANK ASA (new)||December 2016|
|SKAGERRAK SPAREBANK (new)||December 2016|
|INSTABANK ASA (new)||September 2016|
|EASYBANK ASA (new)||January 2016|
|Citibank Europe PLC (new)||January 2016|
|MONOBANK ASA (new)||November 2015|
|SKANDIABANKEN ASA (new)||September 2015|
|Safe Deposit Bank of Norway AS (new)||July 2015|
|GRENKE BANK AG BRANCH NORWAY (new)||November 2014|
|KOMPLETT BANK ASA (new)||March 2014|
Table 4. The most recently opened banks in Norway.
All the credit institutions operating in Norway can be classified into several categories. Table 5 summarises the number of banks in each category.
|Category||Number of Banks|
|Branches of foreign banks||42|
|Special purpose banks||1|
There are 40 branches of foreign banks from 8 different countries in Norway. Table 6 shows the number of branches grouped by the country of origin.
|Country of Origin||Number of Branches|