Covid-19 – information for foreign companies with activities in Norway
Norway's travel restriction and quarantine regulations are changing the scene of how M&A transactions are carried out. M&A sale processes usually include in-person management presentations, site visits and meetings with stakeholders and key employees. The covid-19 travel restrictions and quarantine regulations in Norway, has made these interactions difficult.
Even if the meetings, tours and presentation can be held virtually, it is in some cases crucial with physical presence and in-person interaction to be able to evaluate M&A opportunities, and to inspect physical assets. Below, we will give a short overview on the restrictions in place, and the limitations and consequences they have on travels to Norway in connection with cross border M&A.
The Norwegian government has closed the borders to foreign nationals who lack a residence- or work permit in Norway. The Directorate of Immigration and the police has the power to expel foreigners without a residence permit. An exemption from this rule is EEA nationals who are independent and self-employed, and who have established, or are in the process of establishing business activities in Norway.
For an EEA national to be granted right of residence as a self-employed person, he or she must substantiate a genuine business activity in Norway. This assessment can be based on documentation that shows that the person is running or intends to establish business activities within Norway. For the person to be deemed self-employed, the person in question must hold a position that makes her or his stay in Norway necessary to establish and/or run the business, i.e. he or she plays a key and active role in the M&A process. A position as a passive shareholder does not fall within the exemption; it must be an active role in setting and/or managing the business. A typical example would be a person from an EAA based private equity fund acquiring and managing a Norwegian business operation.
However, all travelers coming from abroad must undergo quarantine for 10 days upon arrival in Norway. This will also be the case for the EEA nationals who are self-employed and are coming to Norway to establish businesses. The regulation has an exemption from the duty of quarantine for persons who travel in connection with work between their home and workplace, and cross the borders between Norway, Sweden and Finland. This means that the person has to provide documentation regarding his or her employment in Norway. This exemption will unfortunately not apply to the above mentioned exemption for an employee from a PE based firm, whether from Sweden or Finland, or another EEA country that sends its employees to Norway for assisting in a transaction with a Norwegian Target.
The quarantine restrictions also apply for those who has been in close contact with anybody that have previously or subsequently been confirmed as infected. The regulation stipulates that close contact in this manner is regarded as contact with others less than two meters away for more than 15 minutes, and direct physical contact with secretaries from other persons.
The current restrictions placed on foreigners travelling to Norway will normally allow access to Norway in connection with a cross border transaction. The problem, however, is that the current rules will require a 10 day quarantine immediately after arrival, which makes a physical visit less practical. Even if the regulatory landscape changes quickly in the current environment, the involved parties will therefore have to limit themselves to electronic communication.