Norway’s super-rich will flee to Switzerland to avoid exit tax, claim lobbyists

Norway’s planned changes to a so-called exit tax are threatening to trigger a wave of departures from that country by start-up founders and companies, according to a lobby group.

Last March, the Norwegian government announced its latest step to close tax loopholes for wealthy expatriates by setting a deadline for the payment of an exit tax on unrealised changes in the value of their assets, or their transfer. That plan follows increases in wealth and dividend taxes since 2022 that have prompted dozens of the country’s richest to relocate, mainly to Switzerland.

A majority of about 150 early- stage entrepreneurs – responding to a survey by the newly established Norwegian Alliance for Startup and Tech – are considering leaving Norway after the latest tax plan, board chairman Anders Mjaset said in an interview.

Most respondents also see the new rules making it “a lot harder” to attract international talent and raise venture capital, he said.

While the increases in wealth tax over last two years would only affect the most highly valued early-stage companies, the sector’s key concern is about taxing unrealised gains, according to the group.

The exit tax changes aren’t directed at start-up entrepreneurs, and foreigners contributing to Norwegian start-ups don’t necessarily have to assume tax residency in Norway, said Oslo’s finance minister yesterday, criticising what he said was disinformation that is deterring foreign entrepreneurs.

The amended exit tax, still due to be approved by parliament, would have to be paid 12 years after leaving, whereas currently it is possible to keep deferring it.

Norway, which is western Europe’s biggest oil and gas producer, needs to find new sources of economic growth and to ensure it doesn’t endanger new business, Alexander Woxen, former chief executive of the Oslo-based Startuplab, has said.

“As long as we pump oil, it doesn’t really matter for this generation – but in the longer term, if we really want to have a more diverse industry composition in Norway, we need to also cater for that,” Mr Woxen said. “We expect this to be counterproductive while the current government…is not willing to debate this.

“The problem is that once it has unfolded far enough, it’s harder to rewind because they created the notion that these awkward kind of tax schemes come and go and reduce the ability to raise money in Norwegian start-ups.”

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