In recent years, a growing number of Norwegian entrepreneurs and investors have chosen to relocate abroad. The public debate often reduces this to a simple question of tax levels.
But the underlying issue is more complex — it is not only about how much is taxed, but what is being taxed.
This issue has also attracted international attention. I was recently interviewed by France Télévisions for C dans l’air, discussing how Norway’s wealth tax affects founders in practice:
The difference between wealth and liquidity
Norway’s wealth tax is often described as a tax on the wealthy. In principle, that is correct.
In practice, it can also apply to individuals whose wealth exists primarily on paper.
Founders and early-stage investors often hold significant equity in companies that have been valued by the market — sometimes through funding rounds or secondary transactions.
These valuations can be substantial.
But they are not liquid. They do not generate cash flow and cannot easily be converted into cash without selling ownership.
The startup paradox
This creates a paradox.
A company can grow in value. Its founder can become “wealthy” on paper.
And yet, that same founder may have limited personal liquidity — sometimes to the point of having to reduce personal expenses to meet tax obligations.
In extreme cases, founders may be required to pay tax on values they have never realized — not once, but repeatedly, year after year.
This is not only theoretical.
In my own case, building WAYSCloud has resulted in personal wealth tax obligations of approximately €25,000 per year over the past three years — driven largely by external valuations following investment, not by realized income.
This creates a direct tension between valuation and reality.
The capital required to meet these obligations must come from somewhere: either from customers, through increased pricing, or from investors, through dilution. In practice, it can also limit the ability to attract and retain talent, as capital that would otherwise be used for hiring, product development and growth is instead used to fund tax on unrealized value.
At that point, the effect is no longer abstract. It directly shapes how companies are built.
A structural mismatch
This is not necessarily a flaw in intent, but a mismatch between how modern companies are valued and how tax systems define wealth.
Startup ecosystems are built on future expectations. Valuations reflect potential, not realized gains, while tax systems often treat those valuations as present wealth.
That gap matters.
Why it affects behavior
When tax obligations are tied to illiquid assets, individuals are forced to make choices.
They may:
- sell shares earlier than intended
- reduce reinvestment
- or relocate to jurisdictions with different tax structures
This is not theoretical. It is already visible in Norway.
This dynamic has also been reflected in Norwegian business media, including interviews with E24, Norway’s largest business and financial news outlet, and Shifter, where I have discussed these challenges in more detail.
In my case, relocation has not been practically possible due to personal circumstances. But the underlying incentives remain.
Whether founders leave or stay, the system continues to shape decisions — influencing how companies are built, financed and grown.
A broader European context
This issue is not unique to Norway.
Across Europe, policymakers are trying to balance:
- redistribution
- competitiveness
- and capital formation
But Norway presents a particularly clear case because of how wealth tax interacts with early-stage equity.
This is also why the topic has gained attention beyond Norway.
In France, where wealth taxation is already a political issue, similar questions are being discussed. The Norwegian model is being observed not only as a policy choice, but as a real-world case of how such systems affect behavior in practice.
It reflects a broader European concern about how taxation interacts with innovation, capital formation and entrepreneurship.
Sweden as a reference point
Comparisons with Sweden are often part of this discussion.
Sweden abolished its wealth tax in 2007. Over long periods, macroeconomic growth across Nordic countries has been relatively similar. But aggregate GDP figures alone do not capture how specific policy changes affect different parts of the economy.
Focusing only on macro-level growth risks creating a composition effect: multiple underlying dynamics combine into a single outcome, making it difficult to isolate the impact of individual policy decisions.
A similar discussion has been raised by Civita, a Norwegian public policy think tank, which has examined how wealth taxation interacts with innovation-driven entrepreneurship.
More detailed data from sources such as the Global Entrepreneurship Monitor, OECD and the European Innovation Scoreboard suggests that Sweden has developed stronger outcomes in areas such as early-stage entrepreneurship, access to venture capital, patent activity and high-growth companies over time.
These differences do not point to a single cause, but they do suggest that incentive structures — including taxation — may influence how innovation ecosystems evolve.
“It may take decades to reverse the damage”
This perspective has also been reflected by former Swedish finance minister Anders Borg. In an interview with Dagens Næringsliv (DN), he pointed to similarities with Sweden’s past:
“As a Swede, you get the feeling that you are experiencing what we went through in the 1970s and 1980s, when business owner after business owner left the country — at significant cost to Sweden.” (translated)
The comparison is not exact, but it illustrates how policy can influence behavior over time — and how those effects may only become fully visible in hindsight.
The question of timing
One of the core challenges is timing. Taxation is being applied before value is realized.
In traditional industries, this is less problematic. In startups, it can be decisive, because early-stage companies depend on reinvestment, long-term ownership and capital staying within the company.
A possible adjustment
This does not necessarily require removing wealth tax, but it may require adjusting how it applies.
One possible approach is time-based. Allowing newly established companies and their founders a temporary exemption or deferral would recognize how early-stage value is created.
Such an approach would allow capital to remain in the company during its most critical phase, support continued growth, and ensure that value is realized before taxation is triggered.
Why this matters
At its core, this is not about individual founders, but about system behavior.
Tax policy influences where companies are built, where capital stays, and where value is ultimately created. In a global market, those decisions are increasingly mobile.
A shared pattern
This is no longer a narrow domestic debate.
It is being discussed in Norway, reflected in national business media, and increasingly observed from abroad. In France, similar questions are part of an ongoing policy discussion, while in Sweden the Norwegian experience is often viewed with a sense of recognition — shaped by its own history.
What emerges is not a single conclusion, but a growing awareness that how wealth is defined and taxed can influence real-world outcomes — affecting behavior, capital flows and long-term economic structure.
Closing
The question is not whether wealth should be taxed, but when — and under what conditions.
When taxation is applied to value that exists only on paper, it can shape real decisions in ways that extend far beyond the individual.
What happens in Norway today may inform decisions elsewhere tomorrow — and once those decisions are made, they are rarely easy to reverse.