Brexit - Impact on company management
As of the 1st of January 2021, British nationals who are not Norwegian residents no longer can be the general manager or make up more than half of a board in Norwegian companies.
As a result of the United Kingdom leaving the EU with effect from the 1st of January 2021, Norway`s relations with the United Kingdom will no longer be regulated by the EEA Agreement. This will have consequences for the company management for around 800 Norwegian companies.
According to current legislation, the general manager and at least half of the board members of joint-stock companies, public limited companies, and cooperatives must either be resident in Norway or be both citizens of and resident in another EEA state. These requirements also apply to the members of the corporate assembly. For foundations, the requirements only apply to the board members.
Together with the other two EFTA countries, Iceland and Liechtenstein, Norway is in ongoing negotiations with the United Kingdom regarding a free trade agreement. Before an agreement is reached and put in place by law, Norwegian companies must ensure that their board composition at all times meets the requirements of Norwegian legislation.
Norwegian companies can apply for a dispensation from the requirements
The Norwegian government has made an arrangement for companies to apply for a dispensation for persons who, as of 1st of January 2021, no longer meets the requirements for residence and citizenship.
The Ministry of Trade and Industry is processing these applications. They have stated that they have a goal to process all applications before the 31st of December 2020.
The Norwegian government is considering to change the law
Depending on the outcome of the negotiations between the EFTA countries and the United Kingdom, the government is considering implementing rule changes in the Companies Act, the public limited Liability Companies Act, the Cooperatives Act, and the Foundations Act, which will remove the exemption requirements for British citizens. This means that a potential future free trade agreement with the United Kingdom will open up for British citizens to once again be able to sit in the management of Norwegian companies without being resident in another EEA-state.
However, before a potential change in the legislation, Norwegian companies who are affected by Brexit must either replace the company management with persons residing in Norway or another EEA-state or apply for a dispensation before the 31st of December 2020.
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