How to do business with Norway ?

Mr Bjørn O. Bjørnsen, Director, Central Europe and the Baltic`sInnovation NorwaySerbian Chamber of Commerce, 18 September 2007

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Innovation Norway

Started its activities on 1 January 2004 by a merge of some important specialized institutions

Subordinated to the Ministry of Trade and Industry

Activity: Business development through loans and financial support , focus on innovation, internationalization and tourism, programs and indiviual support, main focus on development in the districts of Norway and the SMEs

750 employees in offices distributed throughout all of Norway’s counties and in 30 countries. The Head Office is located in Oslo.

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Objective

”Innovation Norway’s objective is to

promote private- and socio-economic

profitable business development

throughout the country and to release

the commercial opportunities of the

districts and regions by encouraging

innovation, internationalisation and

profile-building.”

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Effective and result-oriented

• Around NOK 4 billion- Euro 500 mill - for the reinforcement of Norwegian industry

• Innovation Norway contributes to the establishment and protection of 7,000-8,000 jobs each year

• Customer surveys indicate that at least 90% of Innovation Norway’s funds is devoted to projects that are regarded as important for companies’ survival and profitability development

• 70% of the companies who were promised funding in 2000 think that the projects will lead to a high degree of skills development in one or more professional fields

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Tromsø

Bodø

Steinkjer

TrondheimÅlesund

Hermansverk

Bergen

Stavanger

Kristiansand Arendal

TønsbergSarpsborgSkien

Drammen Oslo og Akershus

Molde

Hamar

Vadsø

Lillehammer

Tynset

Tinn

Førde

• Regional knowledge of business and the community

• Regional differentiation of Innovation Norway’s products and services

An organisation close to its customers

District Offices

Local Offices

Alta

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An organisation close to its markets

BrazilBulgariaCanada China

Czech Rep.Denmark

Estonia Finland France

GermanyHungary

India Italy JapanKoreaLatvia

Lithuania

Malaysia Poland Portugal RomaniaRussia SingaporeSouth Africa Spain Sweden Thailand The Netherlands TurkeyUnited Kingdom USAVietnam

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Facts About Norway

Official name Kingdom of Norway

System of government Constitutional monarchy Parliamentary democracy

The Royal House of Norway Harald V, King of Norway, born 21 February 1937 Sonja, Queen of Norway, born 4 July 1937 Haakon, Crown Prince of Norway, born 20 July 1973 Mette-Marit, Crown Princess of Norway, born 19 August 1973 Ingrid Alexandra, Princess of Norway, born 21 January 2004 Sverre Magnus, Prince of Norway, born 3 December 2005

Population 4 681 134 inhabitants as of 1 January 2007 Norway has an indigenous Sami population as well as five national minorities, defined as groups with long association with Norway.

Official languages Norwegian (the two forms Bokmål and Nynorsk) Sami (equal status with Norwegian in parts of Troms and Finnmark counties)

Religion Protestant Christianity

Currency Norwegian kroner, NOK 1 EUR = NOK 8.24 as of November 2006 1 USD = NOK 6.40 as of November 2006

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Some more facts about Norway of todayExport 2006 Euro 107 bln

Of which export of oil and gas Euro 53 bln

Import 2006 Euro 67 bln

Unemployment 2,7 %Consumer price index 0,4 %

GPD per capita (NOK 461.665) Euro 57.708

GDP growth 2007 about 5 %

Norway is presently experiencing a very high economic activity. Labour market capacity limits are being challenged in both the private and public sector. As a result a need for buying capacity outside Norway as well as import of workers from abroad.

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North-America10,0 %

Europe76,7 %

Africa1,4 %

Asia9,9 %

Oceania0,6 %

South-America

1,4 %

Exports of trad. Commodities - Share 2005

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Norwegian exports 2005NOK 840 billion (estimated)

Ships and Rigs1,0 %

Services20,7 %

Oil and Gas50,7 %

Trad.commodities27,6 %

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Serbia – Norway trade balance

Trade turnover January – December Mill EURO ( rate 1 EURO=8 NOK)

Exports from Norway 2005 2006

8,8 12,8

Iron & steel products and products of plastics =56 %

Imports to Norway 2005 200

5,1 6,9

Products of metall = 40 %Source: Statistisk Sentralbyrå

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Norwegian Business Activities in Serbia

• Telenor – largest single foreign investment ever in Serbia• Albartos – high tech shipping• Elopak – production line of liquid food packaging, drinking

cartons• Rapp Zastava – ship engines• Technor – hydro power projects in Srbska• Statkraft – energy projects• NTE – Nord Trøndelag Energi - energy projects• SINTEF – SME projects• SIVA/SINTEF – development of company incubators• Norwegian Airshuttle – low cost airline with direct flights to

Belgrade

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Business in Norway

Norway is a highly developed democratic society with a strong and stable economy that offers attractive opportunities for international business enterprises.

Foreign capital, knowledge and technology have traditionally played an important role in the development of Norwegian trade and industry, and international cooperation has become even more important to Norway's growth in an increasingly global economy.

 

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Business in Norway (2)

Though Norway has chosen not to become a member of the European Union (EU), Norwegian and foreign owned companies located in Norway have full access to the EU market – including the new member states – through the European Economic Area (EEA) agreement.

There is a stable and transparent political climate with a well-functioning public sector that makes it relatively simple and straightforward to run a business enterprise.Formal requirements to be met when establishing a business in Norway are few, and costs are low.

Norway has a flat 28% corporate and capital gains tax rate and a social security system that provides national health and unemployment insurance.

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Norwegian Strategic Business Areas

• In – coming Tourism• Oil and Gas• Health and bio technology• Renewable Energy and Environment• ICT• Marine products• Maritime• Creative industries

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In coming TourismFocus :

• Sweden• Germany• Denmark• UK• Netherlands• USA• France• Italy• Spain• Japan

New markets:• Russia• China• Poland

Innovation Norway has offices with professional staff in all these markets running tourist projects

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In coming Tourism (2)

2006 : Number of overnight guests in hotels in Norway was 3,94 million of which 3 million were tourists

Aim for 2010 : 1 million overnight guests per year

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Oil & Gas

Exploration of oil & gas at the Norwegian continental shelf started in 1971.

Presently oil/gas exploration takes place at 51 different fields

About 40 % of the registered resources are not yet explored.

Oil & gas products is the larges single export ”product” from Norway and represents 47 % of the total export – about NOK 510 bln or Euro 64 bln.

About 80.000 persons are employed in the oil & gas sector

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Oil & Gas (2)

Norway is today the world`s 3rd largest exporter of natural gas , in 2006 total production was about 87 bln scm (standard cubic meter).

Total oil production is now about 2,5 mill barrels/day (incl NGL and condensate). By this Norway is the 8th largest producer of oil in the world and the 3rd largest exporter of oil.

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Oil & Gas Technology supply industry

The Norwegian oil & gas industry cluster is expanding its international business activities and is now involved in the most challenging global projects –mostly offshore – mainly in North Sea, China, Russia, Middle East, Mexico gulf .

Estimated total turnover in 2005 was NOK 50 bln (Euro 6,2 bln) and the aim for 2010 is NOK 80 bln , about Euro 10 bln.

The largest part of the foreign activities and turnover is handled by the 20 largest companies.

The oil & gas supply industry comprises of about 3.000 companies.

Most of the companies that work on the international markets are member of the INTSOK network:

www.intsok.no

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Health , medical - and bio technology

Norway has one of the worlds largest per capita investment in new hospitals.

In parallel to such projects Norwegian companies are developing new products and solutions , incl focus on ICT solutions to secure safe and good communication between the different levels in the health sector.

This incl tele medicin and standardization of electronic solutions. As well as new operating methods.

Norway has around 110 companies within bio technology and about 200 companies within medical technology, mainly SMEs.

The companies are active within ICT health, electronics, sensor technlogy, equipment for laboratories, rehabilitation, medical bio technology etc. Other areas include gene technology, cell biology, micro/nano technology and bio informatics

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Focus areas within Renewable energy and environment

• Renewable energy (wind and hydropower, wave and tidal, bioenergy, solar energy , other incl geothermal

• Hydrogen and fuel cells

• CO2-clean gas power station

• Energy efficiency

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Priority areas for the EU members, Poland the Czech Republic and Hungary

Most promising opportunities have been identified in:

• Waste water treatment

• Upgrading, reconstruction and construction of new WWTPs, nitrogen and phosphorus removal technologies, sludge management

• Solid waste management

• Upgrading and reconstruction of landfills, biodegradable waste treatment, environment-friendly incineration technologies

• Packaging and packaging waste recycling

• Brownfield remediation

• Renewable energy

• e.g. biomass use, small hydroelectric plants

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Priority areas for Turkey and Russia

For Turkey the most promising opportunities have been identified in

• Alternative and renewable energy generation, especially

• Upgrading and reconstruction of the existing hydroelectric power plants

• Construction of new H.E.P.P, especially smaller plants with installed capacity up to 15 MW

For Russia

• Energy conservation activities, main focus on

• More efficient heat and electrical energy distribution and generation systems

• Less energy consuming technologies for various sectors of industry

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Marine food and Aquaculture

• Norway is the 2nd largest exporter of marine food after China.

Total export was USD 4,2 bln in 2006.

• Farmed seafood about 52 % of total export.

• Norway is producing 46 % of the total world production of atlantic salmon , that is about 600.000 ton in 2006

• Pelagic fish – herring and macrell – is primarily exported to Russia, Ukraine, Japan and Poland

• Norwegian consumption of seafood is about 100.000 ton/year or more than 25 kg/capita

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Maritime Sector

• Ever since the days of sails, shipping has been one of Norway`s most important industries.Foreign trade statistics show that gross freight income from shipping reached almost Euro 10 bln.

• Freight income accounted for about 12 % of total Norwegian export of goods and services (incl oil and gas).

• 1st January 2005 the Norwegian foreign going fleet comprised of 1.614 ships – mostly very specialized carriers of oil, gas and other specilized cargo.

• The Norwegian-controlled offshore fleet is the second largest in the world after USA

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Maritime Sector – shipbuilding and ship equipment

Total turnover: NOK 31 mrd, 18.000 employees

• 12 Shipyards.Turnover NOK 9,5 mrd, 4.000 employees

• Suppliers of ship equipment – 139 companies. Turnover NOK 12,3 mrd, 6.500 employees

• Ship consultants- 14 companies, turnover NOK 450 mill

Møre Region and the maritime sector:

• 75 % off all large offshore ships are designed in the area

• 50 % off all large offshore ships are outfitted in the area

• 35 % off all large offshore ships are owned in the area

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Norwegian ”clusters”Sector Region R & D institutions Companies

Aquaculture technology

Bergen, Hordaland Aas, Austvoll, Feeding Syst., Proocean, NorMær, Rabben

Aquaculture technology

Trondheim Aqua…., Frøytang, Superior

Biotechnology, marin Tromsø

Bergen

Fishery research Institute

University of Tromsø

Biotechnology, farmasy

Oslo University of Oslo

University hospitals

Amersham, Dynal, Axis, Photocure, Genovision

Biotechnology, agriculture

Hamar region NLH – Norwegian University of Life Sciences

Geno As, Norsvin

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Norwegian ”clusters” (2)Sector Region R & D institutions Companies

Building technology Oslo, Rogaland NTNU- Norwegian University of Science and Technology

Oslo School of Architecture

20 architechts and engineering consultants, incl Snøhetta

Value added fish products (white fish and pelagic)

Båtsfjord, Finnmark, Vestrålen, Måløy-M&R, Egersund-Karmøy

Melbu Domstein, Lerøy

Airport technology Oslo region Jotron, Ocas, Park Air

Renewable energy, fuel cells

Oslo, Grenland, Nordland

NTNU -Norwegian University of Science and Technology, Kjeller

Scanwafer, Norcell

Renewable energy, wind

Trøndelag, regions along side western coast

NTNU Norwegian University of Science and Technology , Kjeller

Scanwind, UMOE Mandal, Vestas Kr.sand

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Norwegian ”clusters” (3)

Sector Region R & D institutions Companies

ICT OsloArendalHaldenSteinkjer

University of Oslo and a number of regional colleges

Mechanical engineering and automatisation

Jæren JÆRTEK 13 companies, 2600 employees. ABB Autom.

Mikro- electronics Trondheim, Leksvik NTNU - Norwegian University of Science and Technology, - SINTEF

Lyng, Navia, Oceanor, Corrocean

Environmental Technology

Counties in southern Norway + Trøndelag region

Clusters of companies in Green Business Norway and OREEC (Oslo Region Renewable Energy and Environment Cluster

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Norwegian ”clusters” (4)

Sector Region R & D institutions Companies

Mobile commiunication solutions

Oslo Opera, Birdstep, Telenor

Furniture Møre & Romsdal Ekornes, Fora Form, Furnes, Helland, Hellegjerde, Pedro, Stokke

Oil and Gas technology

”Engineering valley”, Asker, Bærum, Oslo

Rogaland

Aker-Kværner, ABB

Plastic and composits Østfold

Shipbuilding Sunnmøre SINTEF, Trondheim 14 shipyards + 80 subcontractors, 4200 employees

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Norwegian ”clusters” (5)Sector Region R & D institutions Companies

Pleasure crafts/yachts

Agder Fjord, Marex, NorSea, Nordkapp, Skipsplast, Draco, etc.

Space & satellitt Oslo region

Nordland/Troms

Norsk Romsenter

Kjeller

University in Tromsø

Narvik Regional College

Nera

KongsbergKongsberg Spactec, Andøya

Technical medical equipment

Mjøs region Sintef Unimed 10 companies around Mjøsa lake

Paper & Pulp Østfold, Buskerud and Nord-Trøndelag

Norske Skog (Hønefoss,Halden, Tofte

Borregaard (Sarpsb.)

LM Petterson (Moss)

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Norwegian ”clusters” (6)

Sector Region R & D institutions Companies

Wood industry Hedmark and part of Oppland

Fagernes, Norwegian University of Life Sciences, Ås

Moelven, Forestia, Eidsskog-Stange skogene

Trondheim R & D Area

NTNU- Norwegian University of Science and Technology, SINTEF

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Where to obtain market info ?

 Oslo Chamber of Commerce can produce a MINI MARKET REPORT showing the potential for your products on the Norwegian market.

The report will include:

- general market trends in Norway for your type of products- distribution channels- competitors and other operators in the market- some trade leads and relevant contacts, such as branch organizations etc.

Total price for the report is EUR 700.-.

http://www.chamber.no/

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Where to obtain market info ? (2)

The official Norwegian Trade Portal:

www.nortrade.com

Here you can also by a click find the official Norwegian Trade Directory as well as a lot of relevant and detailed info about companies as well as how to do business with Norway

The website of the Norwegian Embassy in Belgrade:

www.norveska.org.yu

The website of the Serbian Embassy in Oslo:

www.serbianembassy.no

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Starting business in Norway

Info available on the following items on : http://www.bedin.no/CWObjekter/Guide_starting-engelsk-

TOC.shtml

Register your businessType of business entityValue added taxAccountingEmploymentTaxationImport and export of goodsBusiness planWho can tell

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Successfully doing business in NorwayBusiness meetings and negotiationsSome hints….

Pre-meeting preperations

Appointments should be set up well in advance.

Intermediaries are less important to set up initial contacts and securing the deal than in many other cultures.

Dress conservatively – at least until the host opens up for an open-shirt dress code.

Be punctual. If you are only a few minutes late for a business meeting, call your counterpart and explain the delay

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Successfully doing business in NorwayBusiness meetings and negotiationsStart of meeting

Exchange of business cards follows after an initial small talk.

Business people are not addressed by their titles. Norwegians and Danes are generally less formal than Germans and Swedes and address each other rather informally. First names are used less than in the US, so let your counterpart set the stage for how to address each other.

Norwegians are direct and do not focus on rituals and social environments for the negotiations. In the initial meeting Norwegians are ready to talk business after only a few minutes of small talk. During business meetings Norwegians are straightforward and direct.

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Successfully doing business in NorwayBusiness meetings and negotiations

Presentation and negotiation tactics

Norwegian companies are generally willing to pay for quality. They are also willing to switch suppliers to get better terms or better quality.

You need to build trust. Bring a good business presentation. Emphasise facts, benefits and profitability during your presentation. It may be wise to give an honest impression by even pointing out certain weaknesses/disadvantages. Your personality and social skills are of some initial importance but of little importance when decisions are made.

Negotiators will be oriented towards facts and figures rather than the broad corporate view.Do not over promise, and make sure that you keep your deadline/schedule promises. Otherwise Norwegians quickly lose interest.

To Norwegians “New” is not necessarily better. You need to present a convincing case – not based on emotions but on usefulness and technical quality. New concepts have to be proven as high quality, practical and already well tested.

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Successfully doing business in NorwayBusiness meetings and negotiationsPresenting a proposal

If you have made a proposal you will need to stick to it. To your Norwegian counterpart trust is important. Turning around and changing or adding surprising new elements is generally not popular. It is also hard to renegotiate terms after an agreement has been made, even if circumstances have changed.

Norwegians are normally not tactical negotiators. If they say your product is too expensive they probably mean it.

Present a firm, realistic and competitive initial offer and expect some bargaining. Yield something for psychological reasons but do not drop your initial offer so much that the initial offer appears as a bargaining technique. The counterpart could perceive that as dishonesty.

In Norwegian corporations there may be a low level of individual risk taking – making it difficult to get the final signature even when you have convinced the negotiator. To press for greater speed can easily backfire.

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Successfully doing business in NorwayBusiness meetings and negotiations

Dos and don'ts. In general

Avoid excessive gift giving or any other action that can be perceived as a bribe. Scandinavia probably ranks as the most corruption free area in the world.

Hard selling techniques will get you nowhere in Norway. Avoid bragging and exaggerations and make a well-documented presentation that gets your counterpart involved and lets him/her buy from you rather than you selling through one-way communication.

Norwegian body language and tone of voice is less expressive than in North America and southern countries. Do not misinterpret this as lack of interest.

Southern Europeans and South Americans should be aware that interrupting a Scandinavian speaker is considered rude.

More and also other relevant hints at: www.norway.com/businesslinks

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Visit our website at: innovationnorway.no

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Thank you very much for your attention !

bjorn.bjornsen@invanor.no