Acquiring a business in Norway: Legal certainty meets human complexity

Acquiring a company in Norway requires navigating both a clear legal framework and a work culture characterised by trust, involvement and long-term commitment. In this article, we bring together legal perspectives from Thommessen with HR and organisational insights from SamSpire to provide a more complete picture of what international businesses should be aware of when entering the Norwegian market.

– The Norwegian labour market is largely built on stability, transparency and dialogue. That can be a contrast for investors coming from more flexible and market-driven systems, says Partner Anders Sundsdal

Together with Managing Associate Alexandra Refsnes and HR Adviser Siri Sandholt in SamSpire, he regularly assists international clients in transactions.

In this article, they share their experience of what foreign businesses should be aware of to reduce risk and to ensure a seamless transition when acquiring businesses in Norway.

Permanent employment as the main rule

Permanent employment is the starting point in Norwegian working life, and the use of temporary and external resources is strictly regulated. For international investors, this can feel unfamiliar.

– As permanent employment is the default in Norway, any use of non-permanent labour is subject to strict rules. There is a general risk that temporary employees, hired-in personnel and consultants may have a claim to permanent employment, says Anders.

In practice, this means that:

• Temporary positions can only be used in specific cases, such as substitutes or in time-limited projects
• Hiring-in through staffing agencies is heavily restricted and primarily permitted to meet temporary replacement needs
• Consultants must operate independently and cannot be subject to the company's day-to-day management and instructions – otherwise, they may be reclassified as employees

In acquisitions involving founder-led or family-owned businesses, it is also common to see a need for professionalisation. Smaller companies often operate with great flexibility, creativity and informal structures – strengths that risk being lost if a large, international owner imposes too much standardization too quickly. Finding the balance between necessary professionalisation and preserving what made the company unique in the first place is often crucial for post-closing success.

Strong employment protection

The employment protection in Norway is strong. Terminations must be based on a valid cause and specific material, procedural and formal requirements apply.

– The threshold for termination is high, and employees who contest the validity of the termination generally have the right to remain in their position until the matter has been decided by the courts, says Alexandra.

CEO agreements - flexibility in exchange for compensation

As a starting point, CEOs are covered by Norwegian employment protection, but agreements can be entered into to provide flexibility.

– CEOs may waive their employment protection in exchange for severance pay. This is common, and we often recommend it, as it provides flexibility for the board, says Anders.

Typically, six months’ notice is agreed, with the possibility of garden leave, in addition to 6–12 months’ severance. Still, success depends on more than legal structure.

– Many integration challenges are not only about the legal aspects, but about clarifying expectations between the board and management, he adds.

Redundancy processes - objective criteria and social responsibility

Redundancies in Norway are subject to specific material and procedural rules and require documentation, involvement and dialogue.

– As a main rule, the selection pool is the entire company. Employees must be assessed against remaining positions and one another based on objective criteria such as seniority, competence and social considerations, explains Alexandra.

There are also requirements for:

• Consultations with employee representatives
• Individual discussion meetings
• Preferential right to new positions for 12 months following termination

She emphasises that the process is not only legal:

– Transparency and early involvement of employee representatives in reorganisations and redundancy processes can in fact speed up implementation and reduce resistance. Transparency builds trust – and improves pace.

• A frequent misconception among foreign buyers is that when a position is removed, the employee holding the position is made redundant. In Norway, the assessment focuses on the person, not the role, meaning the employee has a right to assessed for other suitable positions.

– Voluntary termination agreements are often more appropriate than formal dismissals – they preserve dignity and reduce conflict risk, adds Siri.

Restrictive covenants - lawful but regulated

Non-compete restrictions and customer clauses may be used, but are closely regulated under Norwegian law.

– To enforce a non-compete, the employer must give written notice within statutory deadlines, and compensation must be paid, explains Anders.

Contractual protection matters, but is not sufficient on its own:

– Retaining key employees is not only about contracts, but about trust, purpose and autonomy, says Siri.

Human due diligence - more than risk mapping

Legal due diligence identifies risks. But to realise the value of an acquisition, one must also understand the people.

– Legal due diligence identifies risk, and human due diligence unlocks potential. Norwegian employees are motivated by stability, involvement and meaning, says Siri.

– It is not only about buying a company, but about engaging the people who will realise the value of the acquisition, she adds.

Examples of issues often revealed in human due diligence include unclear leadership structures, dependency on a few key individuals, low organisational capacity for change and lack of clarity in roles and responsibilities. Addressing these early increases integration speed.

Another challenge seen particularly in the tech sector is acquisitions where the primary motivation is not to develop the acquired company, but to neutralise a competitor. In such cases, the incoming owner's priorities can clash directly with the culture and purpose of the acquired business, creating significant friction and uncertainty among employees.