This June, the EEA / EFTA countries Norway, Iceland and Liechtenstein and the UK finally reached a free trade agreement. The entry into force of the new amendments to corporate law, e.g. the Private and the Public Limited Liability Companies Acts (the “Companies Acts”), on the residential and nationality requirements for the general manager and the directors of the board, are subject to Norway and the UK having entered into a free trade agreement. Pursuant to the amendments, nationals of states party to the EEA Agreement or nationals of the UK and Northern Ireland will fulfil the residential and nationality requirements in the Companies Acts, when also residing in such state.
The Norwegian Parliament has consented to the entering into of the free trade agreement, and the agreement was signed by Norway and the UK in July. However, the amendments to the Companies Acts will not enter into force until Norway and the UK have implemented their internal procedures for ratification of the agreement. It is expected that this will happen shortly.
In the meantime, the current legislation which states that the general manager and at least half of the board members must be resident in Norway or be nationals of states that are parties to the EEA agreement and resident in such state, will still apply. As of 1 January 2021 and until ratification, companies with general managers or boards of which more than half of the directors are UK citizens, will not satisfy this requirement. This means that such boards are not validly composed, and the companies may risk forced liquidation proceedings, cf. Section 16-15 subsection 1 no. 2 of the Companies Acts. However, it is possible to apply for an exemption from the residential and nationality requirement to the Ministry of Trade, Industry and Fisheries by submitting a standardized form to the ministry. Companies that are affected by the UK’s withdrawal from the EU / EEA must still apply for an exemption until the free trade agreement has been ratified by Norway and the UK.
This newsletter will be updated when the agreement is ratified, and the legislative amendments enter into force.