Norway's richest are leaving the country after slight tax increase

Source: The Guardian
10 Apr 2023 16:50

Over 30 of the country's super-rich have left Norway in 2022.

Norwegian flags flutter at Karl Johans street in Oslo, Norway, May 31, 2017. (Reuters)

Since the center-left government raised wealth taxes to 1.1%, a record number of Norway's richest are fleeing to low-tax countries, The Guardian said in a report on Monday.

Research conducted by Dagens Naeringsliv newspaper found that in 2022, over 30 Norwegian billionaires and multimillionaires left the country - more than that in the previous 13 years combined - while more super-wealthy people are expected to move away this year over the tax increase passed last November, which will eventually cost the government tens of millions NOK of lost tax income.

Switzerland was the favourite destination for many of them due to its significantly lower taxes.

64-year-old Industrial tycoon Kjell Inge Røkke chose to move to Lugano for its prime location in the center of his businesses and associates.

The fourth-richest Norwegian, with an estimated wealth of around NOK 19.6bn ($1.8bn), said in a letter: “I’ve chosen Lugano as my new residence – it is neither the cheapest nor has the lowest taxes – but in return, it is a great place with a central location in Europe … For those close to the company and to me, I am just a click away.”

According to the report, his change of residence will annually cost the Norwegian government almost NOK 175m in lost tax income.

Norway introduced a few months ago tax increases that target wealth on both local and state levels, including raising taxation on municipality fees in excess assets among other things.

According to Ole Gjems-Onstad, a professor emeritus at the Norwegian Business School, the business giants that left the country had a combined wealth of no less than NOK 600bn.

“In my opinion it is a little bit like Brexit. Norway has no great tradition of self-harm, and the flood of entrepreneurs moving abroad has come as something of a shock,” Gjems-Onstad, said. “Some politicians are, as you know, blaming the wealthy people moving, but I think many ordinary people quite simply do not like that our best investors are leaving,” he added.

Tord Ueland Kolstad is another example of the super-rich leaving Norway. With a fortune of around NOK 1.5bn, the businessman has relocated to Lucerne in Switzerland.

“This was not what I wanted, but the toughened and increased tax rules of the current government means that I, as the founder and responsible owner, have no choice,” he told the Norwegian channel TV 2.

“This is unfortunately the reality of today’s tax policy. It is unjustifiable to impose such costs on the company when you want to create new jobs,” he added, noting that he has met other wealthy Norwegians in his new location.

A state secretary in the Finance Ministry told The Guardian that he hopes that rich Norwegians would return “in time”.

“If you have enjoyed success and become rich in Norway, we hope you will stay and continue taking part in the Norwegian society,” Erlend Grimstad said. “We do encourage Norwegians to succeed in creating value and become rich. And we believe the Norwegian model with a strong public welfare system and high education levels are important factors in making that success possible."

“The model in Norway is that everyone should contribute relevant to ability and therefore those that have a greater ability to pay taxes, should pay a little more.”