Norway International Update Q4 2024

The Supreme Court clarifies the principles for financial settlement in cases where independent contractors are reclassified as employees

In a decision from 20 December 2024, the Norwegian Supreme Court passed a judgement on how financial claims from individuals that have been wrongfully engaged as independent contractors and instead are deemed employees, should be calculated. The case related to three health workers that had been engaged as independent contractors. However, the health workers had in fact been working as employees during their engagement and were therefore reclassified as employees.

The Supreme Court decided that the health workers were entitled to supplementary payment for unpaid hours, overtime compensation, holiday pay etc. on top of the consultancy fees that they had received. It was not decisive that the fees paid under the consultancy agreement were far higher than the hourly rate the health workers would have been entitled to as employees. Further, the Supreme Court decided that the higher consultancy fees did not give grounds for deduction in the supplementary payments, as the consultancy fees did not explicitly cover overtime payment and holiday pay, which the workers would be entitled to by law and applicable collective bargaining agreement.

Further, the Supreme Court assessed whether the health workers claim for holiday pay had been time barred and ruled that this was not the case. The Supreme Court ruled that ordinary rules for limitation do not apply for holiday pay, and that the holiday pay entitlements are transferred from year to year instead of being barred successively. The limitation period started to run when the employment ended. This meant that the health workers were entitled to payment of holiday pay going back more than 10 years.

The judgement is a reminder of the economic exposure that companies are subject to when engaging independent contractors, and therefore supports a restrictive practice with use of independent contractors/consultants.

The full decision is available here (in Norwegian).

The Anti-Discrimination Tribunal decided that an applicant was not discriminated when his job application was rejected due to Russian citizenship

In December 2024, the Norwegian Anti-Discrimination Tribunal ruled on a case involving a Norwegian power sector supplier who rejected a job applicant who was a Russian citizen due to security concerns. Represented by Wiersholm, the company argued that the applicant’s Russian citizenship posed a security risk and was in breach of requirements made by clients that restricted personnel from high-risk countries. The Tribunal acknowledged this as direct ethnic discrimination under the Norwegian Equality and Anti-Discrimination Act but concluded that it met all conditions for lawful discrimination, absolving the company of any wrongdoing.

Together with another decision from the Tribunal from this autumn, this decision provides useful take-away, including that (i) the Tribunal is hesitant to overrule the security assessments made by the businesses on a case by case basis and (ii) that businesses can, as a starting point, place great emphasis on public threat assessments from national security authorities when evaluating security risks, including the risk level for the sector in which the business operates, and the risk of pressure and influence from foreign intelligence on employees with connections to the relevant country.

To reduce the risk of security assessments being in breach of the protection against discrimination, we recommend that businesses develop background check guidelines that assess risks associated with high-risk country affiliation and further that these guidelines are discussed with the employee representatives.

The Norwegian bond market

The Norwegian bond market was very strong in 2024, with both number of issuances and issuance volume close to the all-time high year 2021. The positive momentum from 2023 continued in 2024 and based on the significant activity we are seeing early on; we expect such trend to continue in 2025.

The variation in the issuers is a testament to how the Norwegian bond market has developed. The market has an impressive ability to absorb deals, which is due to, among other things, the growing investor base in the Norwegian bond market and the significant inflow to the high yield funds. The growing investor base is also reflected by the increased number of foreign issuers, particularly with a significant number of new issuers from Sweden, Germany and the UK. Even though the terms of the bond issues largely remain the same, we have seen some influence from other markets with new issuers exploring the possibility to introduce new concepts and tweak certain customary provisions.

The interest rates declined in 2024, with declining reference rates and tighter credit spreads. Certain repeat issuers stayed away from the market when the interest rates where soaring in 2022 and 2023, but the drop in interest rates made them re-enter the market in 2024. In addition, the declining interest rates have made several solid issuers enter the market, both listed companies and well-known private companies. Such companies entering the market proves the appeal of the Norwegian bond market.

Historically, the Norwegian bond market was largely dependent on issuers from the oil and gas sector. The trend with a more diversified base of sectors continued in 2024, with the oil and gas sector now representing approximately 20 per cent. of the Norwegian high yield market. Other sectors are generally continuing the trend from previous years, with real estate as an exception. After a significant drop off in 2023, the real estate sector is showing signs of revival, a trend which is expected to continue in 2025.

Another emerging trend is the number of PE-backed companies entering the market, opting for the flexibility offered in the Norwegian bond market. Noticeably, an increasing number of bonds are maintained post-acquisitions, with the permitted transferee-concept and similar concepts being utilized by several issuers in 2024. With the expected uptick of M&A transactions, it will be exciting to see how such relatively new concepts are being utilized in 2025.

Bank financing

In 2024, the landscape of bank financing in Norway has demonstrated stability, primarily characterized by a predominance of refinancing deals. This trend is complemented by a vibrant high yield bond market, which has facilitated the emergence of several super senior revolving credit facilities alongside structures that integrate bonds and secured term loans on an equal footing (pari passu).

The subdued activity in mergers and acquisitions (M&A) and real estate sectors has reduced the volume of new financings. However, there is an observable uptick in these sectors as we approached the fourth quarter of 2024, with optimistic projections extending into 2025.

In light of a less active M&A market, there has been a noticeable shift towards alternative financing structures. These include fund financings, holding company (holdco) financings, dividend recapitalizations, and continuation vehicle transactions. These mechanisms are increasingly being leveraged to create dynamics, as alternatives to ordinary M&A transactions.

Looking ahead, it is anticipated that these financial products will continue to gain traction in the Norwegian market, regardless of the potential resurgence in M&A activities. Both sponsors and lenders, including those in the private credit sector, are showing a growing acceptance of Norwegian law as the governing law for credit agreements.

The competition amongst the banks remains strong in most segments. This competitive environment is leading to narrower interest margins across various segments.

The loan market in Norway remains predominantly influenced by Norwegian and Nordic banks, which continue to focus on relationship-driven deals. Nevertheless, there is a rising presence of private credit funds, either serving as the sole source of funding or participating as term loan B (TLB) lenders.

• The Ministry of Finance («MoF«) has adopted amendments to the Norwegian Lending Regulation, which sets out requirements for lending practices for loans to consumers. The amendments took effect on 31 December 2024. The Norwegian Financial Supervisory Authority largely proposed to continue the current regulations, as described in the Q3 update. However, the MoF has decided to reduce the maximum Loan-To-Value (LTV) requirement for mortgages from 85% to 90%. In addition, the debt-servicing capacity requirement is amended to allow lenders to take the risk-mitigating effects of fixed-rate loans into account.
  
• As noted in the previous update, legislation implementing Regulation (EU) No 1286/2014 (“PRIIPs“) and Directive (EU) 2019/1160 and Regulation (EU) 2019/1156 (“CBDF“) entered into force on 1 October 2024.
  
• The funds industry has over time expressed that Norwegian management companies of securities funds have had competitive disadvantages to their EU equivalents due to specific Norwegian legislation and practice. The MoF has now requested for the Financial Supervisory Authority to consider regulatory changes allowing management companies to enter into income-sharing agreements. In addition, the MoF has amended the securities fund regulations allowing for currency hedging within a share class and allowing special funds to be exempt from the rule that limits the use of a maximum of 50% of the fund’s assets in repurchase agreements.
  
• The Norwegian Savings Bank Committee was set to assess, amongst other things, the capital structure in Norwegian Savings Banks. On 18 November, the Committee delivered its report, which has been sent for public consultation to 3 February 2025. In the Committee’s opinion, the capital structure should be amended to ensure that banks with equity certificates meet the requirements for CET1 capital set out by the EU’s Capital Requirements Regulation (CRR). The committee also proposed to remove the ability to pay customer dividends from profits.

The purpose of the new E-com Act (Nw. ekomloven) and the corresponding E-com Regulation (Nw. ekomforskriften), is to modernize the regulation related to electronic communication services, and set out more up-to-date security and privacy regulation, strengthen consumer protection, facilitate sustainable competition and efficient use of society’s resources and stimulate business development and innovation.

The legislation applies to activities related to electronic communications, associated equipment and data centers. This includes, among other things, the management and use of the electromagnetic frequency spectrum/electromagnetic waves and numbers/domain names.

While the new legislation mainly is a continuation and modernization of existing legislation, below we have highlighted certain of the most anticipated changes:

Cookies. Until now, and contrary to recent EU practice, a user’s general consent to cookies in the browser settings (or other forms of opt-outs) was considered a lawful consent under the Norwegian E-com Act. However, the E-com Act now requires the user to provide a GDPR valid consent (opt-in) for a website to set cookies and similar technologies on a user’s device, in line with the current interpretation of the EU ePrivacy Directive.

New electronic communication services. The definition of electronic communication providers has been broadened to be in line with the EU Electronic Communications Code. This means that new services will be regulated by the E-com Act, such as number independent person-to-person services as web-based message services or VoIP-services such as Facebook, Skype, WhatsApp etc.

Data centers. The existing legislation did not have any specific data center regulation. The new E-com Act introduces several obligations for data center operators, including a registration duty, security and redundancy requirements, and usage limitation for the purposes of national security/important public interests.

Strengthened consumer rights. Several new provisions related to the protection of consumers has been introduced, e.g. requiring contract terms to be easily accessible and not contain discriminatory terms, availability for people with disabilities, more detailed cost and consumption rules and requirement to make available an e-mail account for three months after the end of an agreement.

New appeals board. A new Electronic Communications Appeals Board has been introduced to give companies and individuals a right to complain/appeal decisions made by the Norwegian Communications Authority.

CSRD enters into force in Norway

On November 1, 2024, the Norwegian legislation implementing the EU Corporate Sustainability Reporting Directive (CSRD) entered into force. The decision was made by the King in Council on October 11. On the same day, the Norwegian Ministry of Finance also decided transitional rules that provide a gradual introduction of the new requirements on sustainability reporting the next years, in alignment with the approach of the EU.

On June 21, 2024, the Norwegian Parliament adopted new legislation on sustainability reporting through amendments to the Accounting Act, the Auditor Act and the Securities Trading Act. The legislative amendments were in line with the proposal from the Norwegian Ministry of Finance from March 2024. The aim of the new sustainability reporting legislation is to provide relevant, comparable and reliable information about (i) the sustainability risks that companies are exposed to, and (ii) how the companies affect people, climate and the environment. The legislation also seeks to ensure that the sustainability information is readily accessible across the different EU and EEA member states.

In Wiersholm’s recent newsletter on CSRD, we provide a more detailed update on the new sustainability reporting requirements and their implications for Norwegian companies – which you can read more about here.

Consultation on the proposal for Norway’s ratification of the BBNJ Agreement

The Agreement under the United Nations Convention on the Law of the Sea on the Conservation and Sustainable Use of Marine Biological Diversity of Areas beyond National Jurisdiction (BBNJ Agreement) was formally adopted on 19 June 2023, by consensus, at UN Headquarters in New York. Norway signed the BBNJ Agreement on 20 September 2023 but has not yet ratified it. The BBNJ Agreement is the third implementing agreement to the United Nations Convention on the Law of the Sea (UNCLOS), which lays down an international legal framework to govern activities related to the world’s oceans and seas.

On November 1, 2024, the Norwegian Ministry of Foreign Affairs launched a consultation on the proposal for ratification of the BBNJ Agreement, seeking input from consulting bodies regarding Norway’s ratification of the agreement (available here). The BBNJ focuses on four main elements:

• Marine genetic resources, including the fair and equitable sharing of benefits.
• Measures such as area-based management tools, including marine protected areas.
• Environmental impact assessments.
• Capacity-building and the transfer of marine technology.

If Norway ratifies the BBNJ Agreement, this will require changes to Norwegian law. Therefore, the Norwegian Ministry of Climate and Environment has issued a proposal for a new law on the conservation and sustainable use of marine natural diversity in areas beyond national jurisdiction, along with proposals for minor amendments to the Norwegian Planning and Building Act. The proposed law and the amendments aim to implement the BBNJ.

The deadline for consultation on both the legislative proposal and Norway’s ratification of the BBNJ Agreement was January 6, 2025.

Norway adopts the EU’s 14th package of sanctions against Russia

On June 24, 2024, the European Union adopted its 14th sanctions package against Russia since its invasion of Ukraine in 2022. On October 2, 2024, Norway implemented the additional Russia-related sanctions, aligning itself with the measures in EU’s 14th package of sanctions. The new package of sanctions is targeted towards certain sectors of the Russian economy, such as energy, finance and trade. These sectors are vital to Russia’s ability to finance its war against Ukraine and are sectors in which it has been possible for Russia to find ways of circumventing international sanctions. The 14th package includes the following key elements:

• Measures targeting liquified natural gas (LNG). For instance, the package prohibits all future investments in, and exports to LNG projects under construction in Russia.
• Listings of 27 specific vessels supporting the Russian warfare. These vessels are prohibited from accessing ports and receiving services.
  
• Restrictive measures on an additional 116 individuals and entities.
  
• Prohibition for EU banks outside Russia to use the Financial Messaging System of the Central Bank of Russia (SPFS). The package also prohibits EU operators from engaging with banks from non-Russian third countries that are connected to SPFS.
  
• Further export restrictions on dual use/advanced technology items. Current export bans on industrial goods have also been extended.
  
• Extension of the flight ban and the prohibition on the transport of goods by road. The flight ban will apply for all non-scheduled flights in which a Russian person decides the origin or destination. The prohibition on the transport of goods by road in the EU will apply for all EU-companies owned 25 % or more by a Russian legal or natural person.

We also note that on December 16, 2024, the Council of the European Union adopted the 15th package of sanctions against Russia. This package specifically focuses on preventing the current circumvention of EU sanctions by targeting the Russian shadow fleet and weaken Russia’s military and industrial complex. The package includes new anti-circumvention measures, additional listings, measures related to trade, protection of European companies and new financial sector measures. 

Notably, the EU has for the first time imposed ‘fully-fledged’ sanctions (i.e. a travel ban, an asset freeze and a prohibition to make funds available) on various Chinese actors. This includes one individual and two entities facilitating the circumvention of EU sanctions, along with four entities supplying sensitive drone components and microelectronic component to the Russian military industry in support of Russia’s war against Ukraine.

On January 8, 2025, the Norwegian government announced that efforts to implement the new sanctions into Norwegian law are underway. The additional listings have already been implemented.

Expansion of Norwegian export restrictions

In the fall of last year, the Norwegian Ministry of Foreign Affairs announced a new control list (List III) to the Norwegian Export Control Regulation. The amendments took effect from November 1, 2024, with a transitional period of approximately one month allowing affected parties to adjust to the new requirements.

Under the export control system, a range of products, technology and services may not be exported without an export license from the Norwegian Ministry of Foreign Affairs, which until recently was specified in two lists issued by the Ministry: List I for defence-related products and List II for dual-use items (e.i. civil-use products and related technology and services not included in List I that may also have military uses). The new list, List III – National Control List of Dual-Use Goods), further expands the scope of the Norwegian export restrictions by listing certain critical goods and technologies that are not currently included in List II. The Norwegian government expects that List III will be expanded with additional goods and technologies going forward.

In a real estate focused newsletter from December 2024, our real estate team summarised recently and upcoming legal changes and matters impacting the real estate sector in Norway, specially prepared with our foreign real estate clients in mind.

The newsletter covers the following topics:

• The Ministry of Finance lowers the equity requirements in the lending regulation
• Proposed amendments to the Tenancy Act
• Regulations relating to the Register of Beneficial Owners
• The Norwegian Mapping Authority is to investigate property ownership in Norway
• Report on foreign investment in Norwegian enterprises
• Regulation on energy mapping
• The CSRD has entered into force
• Legal requirements on gender representation on corporate boards

Read the newsletter here.

Wiersholm’s six new Trondheim-based partners have finally joined Wiersholm

As announced in the Norway International Update for Q1 2024, we are enhancing our presence and competitiveness in the Trondheim region by welcoming six new partners: Terje Bjørndahl, Eirik Edvardsen, Frode Henning Antonsen, Morten Brandhaug, Martin Fevaag Larsen, and Bård Solem. Read more here.

On 1 November 2024, these partners finally joined Wiersholm, marking a significant milestone for our firm. Over the past year, we have steadily bolstered our team in Trondheim, establishing a robust regional office with a focus on fisheries and aquaculture, renewable energy, real estate, construction, mergers and acquisitions, disputes, and tax. Our Trondheim team now comprises 34 dedicated employees.

Wiersholm strengthens the partnership with four new partners

We are pleased to announce the promotion of four new partners, Andreas Gustavson, Svanhild Vesterheim, Stian Advocaat Endre and Theresa Schumacher Walberg. All four have been internally recruited and the change took effect on 1 January, 2025. The promotions reflect our firm’s commitment to nurturing talent from our own ranks and strengthening our service offering in key practice areas.

«Andreas, Svanhild, Stian and Theresa have all made a name for themselves as incredibly skilled lawyers and have been key figures in their fields for a long time. They are also very nice people who are very well liked by our clients. It makes me extra proud to be able to promote talent from our own ranks. With these admissions, we are building on a strong partnership and paving the way for future growth,» says Stephan L. Jervell, Managing Partner of Wiersholm.

Wiersholm awarded Norwegian M&A firm of the year

We are proud to announce that Wiersholm was awarded Norwegian M&A firm of the year at the Mergermarket European M&A Awards in London on 27 November. In addition, the takeover of Adevinta won the grand prize of European Deal of the Year – a deal where Wiersholm advised the long-time shareholder Schibsted.

Partner and Head of Corporate, Anne Lise Ellingsen Gryte, and Partner Sverre Sandvik represented the firm at the award ceremony.

“This award is a great achievement and a testament to our position as a leading M&A firm in Norway. We really appreciate that the entire team is recognized for our role in some of the largest and most complex transactions in the Norwegian market. The Adevinta takeover was one of them, which makes us extra proud of the European Deal of the Year award, in competition with other landmark deals in Europe. We remain grateful to our clients for their continued trust,” says Ellingsen Gryte

Record number of participants at Nordic Buy Out Forum 2024

On 5 December 2024, we hosted the 14th annual Nordic Buy Out Forum in Oslo!

With over 650 participants – a record turnout – and a great line-up of talented speakers, we deep dived into the four main topics;

• Navigating growth and value creation during turbulent market conditions
• Industry and sector deep dives – and strategies for success
• AI – Transforming and disrupting business landscapes
• Future outlooks and geopolitics post US elections

The conference is a yearly highlight for us, and we deeply value the exchange of knowledge and the networking opportunities it provides. Thank you to everyone who joined us and contributed to the vibrant discussions!
 
Many thanks to all participants, and especially to our speakers Ellen Amalie Vold (NVCA), Guillaume Rubens (BCG), Raja Skogland (The Visionary Company), Trond Riiber Knudsen (TRK Group), Sten-Roger Karlsen (Investinor), Frode Strand-Nielsen (FSN Capital), Karl Dalby Skjelbred and Christel Heckmann (Danske Bank), Adina Symreng (BCG), Torgeir Svae (Kverva), Hans Arne L’Orange (Clarksons Securities), Fredrik Bjørland (Schibsted), Bjørn Olstad (Microsoft), Maged Helmy, PhD (Newcode), Nora Szentivanyi (J.P. Morgan), Andreas Gustavson and Theresa Schumacher Walberg (Wiersholm) and our host and NBOF-founder, Jarle Kvam (Wiersholm).

We look forward to the 15th edition of Nordic Buy Out Forum on 4 December 2025, and we hope to see you there!

Watch some highlights from the conference below.

Save the Date – Upcoming Events

Pre-event: Norwegian Arbitration Day 2025

For the second consecutive year, we have the pleasure of inviting you to the Wiersholm pre-event, organized alongside the 2025 Norwegian Arbitration Day in Oslo – with the main theme:

“The rule of t(h)ree: Use of decision trees as a research-based tool for better decisions in commercial arbitration”

Ensure your participation by registering today and keep an eye out for further information as the event date draws closer. Register here.

We look forward to seeing you on 26 February 2025! (You may of course also register for this event even if you are not planning to participate on NAD 2025).