Moving abroad has come as a surprise, costing tens of millions of dollars in missed tax receipts.
Following the centre-left government's hike in wealth taxes to 1.1%, a record number of super-rich Norwegians are fleeing to low-tax countries.
According to Dagens Naeringsliv research, more than 30 Norwegian billionaires and multimillionaires will leave Norway in 2022. This was more than the entire number of super-rich persons who had left the country in the previous 13 years, according to the report. Because of the hike in wealth tax in November, even more super-rich individuals are projected to leave this year, costing the government tens of millions of dollars in missed tax receipts.
Many have relocated to Switzerland, where taxes are significantly lower. They include billionaire fisherman turned industrialist Kjell Inge Rkke, who relocated to the Italian-speaking city of Lugano, close across the border from his favourite hangout Lake Como and fashion capital Milan.
Rkke, 64, is Norway's fourth-richest man, with an estimated fortune of NOK 19.6 billion (£1.5 billion). "I've chosen Lugano as my new residence - it is neither the cheapest nor has the lowest taxes - but in exchange, it is a great place with a central location in Europe," he wrote in an open letter. I am only a click away for people connected to the company and to me."
His transfer will cost Norway around NOK 175 million in lost tax revenue each year. Rkke was the highest-taxed individual in the country last year. According to Dagens Naeringsliv, he has paid around NOK 1.5 billion in taxes since 2008.
His relocation to Switzerland follows a relatively minor tax rise aimed at the country's super-rich, who are subject to wealth taxes at both the local and state levels. This includes a 0.7% municipal tax on assets worth more than NOK 1.7 million for individuals and NOK 3.4 million for couples. There is also a 0.3% state wealth tax on assets worth more than NOK 1.7 million. The government hiked the state rate to 0.4% for assets worth more than NOK 20 million for individuals and NOK 40 million for couples in November, bringing the maximum wealth tax rate to 1.1%.
Ole Gjems-Onstad, retired professor at the Norwegian Business School, estimated that those who fled the nation had a combined worth of at least NOK 600 billion.
"In my opinion, it's similar to Brexit." "There is no great tradition of self-harm in Norway, and the flood of entrepreneurs moving abroad has come as a bit of a surprise," Gjems-Onstad said. "Some politicians, as you know, blame the wealthy people who are leaving, but I believe many ordinary people simply do not like the fact that our best investors are leaving."
Tord Ueland Kolstad, a retail estate and salmon farming investor worth around NOK 1.5 billion, has relocated from Bod, Norway, to Lucerne, Switzerland. "This was not what I wanted, but the current government's toughened and increased tax rules mean that I, as the founder and responsible owner, have no choice," he told Norwegian network TV 2.
Kolstad said that the increase in wealth tax meant he would pay little over NOK 6 million, which he claimed would require him to pay himself a dividend of NOK 10 million to account for increased dividend tax.
"Unfortunately, this is the reality of today's tax policy." "It is unjustifiable to impose such costs on a company in order to create new jobs," he remarked.
Kolstad told the Norwegian newspaper Aftenposten that he had no friends in Switzerland when he initially came. "But now that there are a few of us [Norwegians], we meet for coffee every now and then."
According to Erlend Grimstad, a state secretary in the Ministry of Finance, rich Norwegians will return "in time."
“If you have enjoyed success and become rich in Norway, we hope you will stay and continue taking part in the Norwegian society,” he said. “We do encourage Norwegians to succeed in creating value and become rich. And we believe the Norwegian model with a strong public welfare system and high education levels are important factors in making that success possible.
“The model in Norway is that everyone should contribute relevant to ability and therefore those that have a greater ability to pay taxes, should pay a little more.”
By fLEXI tEAM