Norway May Soon Be Left Without Billionaires
The billionaires have packed their bags and gone to Switzerland. Now many fear that Norway has lost them forever.
Over the weekend, technology entrepreneur and billionaire Stian Rustad told Dagbladet Børsen that he has had enough.
By the end of the year, he will pack his things and move to Lucerne in Switzerland.
“If I am to save Norway and the world, I have to leave,” said Rustad.
A long line of wealthy people have fled Norway, and now several politicians are sounding the alarm about the development.
The Progress Party’s fiscal policy spokesperson Hans Andreas Limi believes that the exodus of Norwegian entrepreneurs and owners shows that today’s policies have become a competitive disadvantage for Norwegian ownership.
He points in particular to the wealth tax, which Norwegian owners must pay even when the company is running a deficit or the values only exist on paper.
According to Limi, this drains companies of money that could have gone to investments, development, and new jobs.
He believes it is obvious that tax and duty policy affects how people act, and points out that the government itself uses taxes on fuel and fossil cars to influence people’s choices.
“Then the government cannot pretend that the same mechanism suddenly stops working when it comes to the wealth tax. If you make it increasingly expensive to own and invest from Norway, more people will be forced to move to countries with better framework conditions,” he says.
Limi therefore believes that emigration to Switzerland should be taken seriously.
“Emigration to Switzerland should therefore be a powerful wake-up call.”
Bjørn Arild Gram, fiscal policy spokesperson for the Centre Party, tells Dagbladet Børsen that Norway needs entrepreneurs.
“The Centre Party will reduce the wealth tax to strengthen Norwegian and local ownership throughout Norway. For entrepreneurs in particular, there is a need to make some optimizations in the tax system,” he says.
“We need entrepreneurs to develop our country. At the same time, we are concerned with having an effective and strong welfare state, which offers good services throughout the country. To succeed in that, we must all contribute according to our ability,” he says.
“We therefore warn against the Conservative Party’s solutions to create a tax system that could turn many of the country’s billionaires into zero-taxpayers.”
A “Scary Development”
The Conservative Party’s Nikolai Astrup fears that Norway may have already lost something that will be very difficult to get back.
“It is unfortunately a fact that we do not have competitive framework conditions for technology entrepreneurs. Norway’s reputation has also been damaged by the unpredictable tax policy of Støre and Vedum,” he claims.
“I understand that the business community is uncertain about what will come around the next bend when the red-green parties negotiate budgets in the Storting.”
To Dagens Næringsliv he describes the development as “scary.”
“Unfortunately, I think the train has left to get people back home. Maybe some will move home if we get a competitive tax level. But it is important to prevent more people from leaving, and this applies especially to those who will build the jobs of the future,” says Astrup.
Speaking to Dagbladet Børsen, Astrup explains why he believes it may be difficult to lure emigrants back home.
“It is often not just about one person deciding to move home, but about jobs, housing, school, kindergarten, and the entire everyday life of the family. Tearing down trust is quick. Building it back up takes time."
"Worrying for Norway”
Stian Rustad is far from the only wealthy Norwegian who has set his sights on Switzerland in recent years.
For Astrup, the consequences are about far more than where individuals pay taxes.
“The welfare of the future depends on a strong business sector. When oil and gas revenues fall, we need new industries and new jobs. When we are going to create the new companies, we depend on having people who want to invest and venture in Norway. The capital and talent flight we have seen in recent years is worrying for Norway.”
He also believes that it matters where the owners actually live.
“It is clear that it matters whether the business owners live in the local community or not. Local owners not only create jobs, but also contribute to society in many ways,” he says.
Astrup also points out that local owners often invest in new businesses in their own local area.
“Local business owners are also an important source of financing for new businesses locally. Over time, we will probably see more of the companies being sold or moving after their owners. It is a challenge that we must take into account. And where are they making their next investments? Is it in Norway, or is it where they live?”
Moving to Lucerne
Stian Rustad made his fortune on the financial system 24SevenOffice.
The company was later sold to an American company for over two billion kroner. Rustad has since built up and invested in a number of new companies.
When Dagbladet met him last week, he said that both an apartment and a car are already ready in Lucerne.
The main reason for the move is the wealth tax.
Rustad wants to use his money on new technology and environmental companies. The problem, as he sees it, is that such investments can take many years to generate income.
Wealth tax must still be paid on the values along the way.
“If I stay here, I will have to continuously pay wealth tax on money that has not started to roll in—and that may never come to fruition,” Rustad told Dagbladet.
Rustad fears that Norway could end up in a vicious circle.
Norwegian owners have to sell parts of their companies to pay taxes. Some then choose to move out. Ultimately, both the money and the new investments may end up in other countries.
“Then the next generation of entrepreneurs will disappear from Norway. It is incredibly harmful for future business,” said Rustad.
Rustad has also pointed to Sweden as a possible future target. He believes the country has a far stronger environment for startups and venture capital.
”Not an Option”
Astrup ends with a strong attack on the government and the Labour Party.
“The Conservative Party has proposed significant tax cuts in the Storting, but has been voted down. Now the government will soon present its proposals for new tax policy. But in order for us to be able to agree, there must be real solutions to the problems. If the government is not willing to go very far in our direction, a settlement is not an option. We need to see real and significant movement from the Labour Party.”
Is there really a basis for sounding the alarm, or is the Conservative Party using the emigration of some very rich Norwegians as an argument for tax cuts for the richest?
“When young Norwegian entrepreneurs with good ideas choose to move to Sweden, Switzerland, or the US to build tomorrow’s companies, I think it is something we should take seriously,” Astrup replies.
“They do not move because they have a lot of money on their books, but because they have ambitions to build companies that can be worth a lot.”
He says that it is a geological fact that the oil industry will become less important for the Norwegian economy.
“To ensure welfare in the future, we depend on more people investing in building companies and creating jobs in Norway in the years ahead. There is no reason why Norway should not have at least as good framework conditions for job creators as Sweden has.”
Source: Dagbladet Børsen (in Norwegian)