The exodus of rich Norwegians to Zug, Zurich and Ticino does not stop. The introduction of a penalty tax by the social democratic government at home does not change that.
Norwegian industrial tycoon Kjell Inge Rökke relocated to Lugano in September.
One of the first to come was the multiple Olympic champion and world champion in cross-country skiing, Björn Dählie. The 54-year-old ski star moved with his wife to the low-tax train at the beginning of the year.
Since then, not a month has gone by without another prominent move by a rich Norwegian to Switzerland becoming known. No fewer than 36 people with assets of at least one billion crowns – the equivalent of a good 100 million francs – are said to have migrated to Switzerland this year, as recently reported by the Norwegian business newspaper “Dagens Näringsliv”.
In September, the fishing and oil magnate Kjell Inge Rökke wrote to his fellow shareholders and employees that he was moving the center of his life from the posh Oslo suburb of Asker to the “beautiful city” of Lugano. The fourth-richest Norwegian did not say a word about the fact that his assets will be taxed in Switzerland in the future.
Only a few weeks later it became known that the major IT investor Jens Rugseth was moving to Lucerne. And almost at the same time it was reported that the discounter heir Magnus Reitan had bequeathed his assets of 20 billion crowns, the equivalent of around 1.9 billion francs, to his children registered in Geneva.
Higher wealth taxes drive the rich away
The wealthy Norwegians take to their heels because they would have to pay significantly more taxes in their homeland. After taking power last year, the Social Democrat-led government raised the wealth tax on net wealth over 1.7 million kroner (160,000 francs) to 1.1 percent. At the same time, the tax on dividends was increased and the deduction on shares was reduced. In doing so, she fulfilled her election promise to ask the rich to pay more for the common good.
The tax increase will be steep for the well-heeled: According to tax experts, wealth taxes on business assets will likely double for many in 2022, while dividend taxes will also rise by almost 50 percent. Quite a few owners are therefore forced to ask their companies for dividends that are higher than profits, explained the think tank Civita. Last but not least, this also inhibits the willingness to invest further in companies.
The government of Prime Minister Jonas Gahr Störe is still unyielding. In order to stop the emigration of wealthy Norwegians, she does not want to lower taxes again. Rather, a kind of penalty tax for renegade Norwegians is introduced. This is intended to ensure that unrealized gains from shares that have been accumulated up to the point of exit from Norway are also taxed there. The regulation should also apply if the shares are transferred to close family members living abroad.
The Treasury justifies its uncompromising stance by saying that the wealthiest must make a more generous financial contribution in order to maintain the country’s generous welfare state. It is not about preventing individuals or companies from prospering. Incidentally, there are still several thousand millionaires in Norway, more than in most other rich countries in a per capita comparison.
However, it is questionable whether the exodus can be stopped with this emigration tax. Just a few days ago, the Norwegian media reported that the extremely wealthy shipowner and investor Trond Harald Klaveness had also relocated to Switzerland. According to Norwegian media, he is said to have bought a property on the left bank of Lake Zurich.
Also this week, Fredrik Haga, one of the founders of crypto company Dune, announced that he would leave Norway and formally register in Zug on Saturday. “It’s not that we don’t want to pay taxes. It’s about having to pay taxes on money I don’t have.” the 31-year-old told the Financial Times.
Although his company Dune is growing rapidly, it is making losses. That’s why it’s not possible for him to pay a dividend or sell shares in his company, says Haga. He left Norway because he feared his next tax bill would be several times his disposable income.
Advertisement for luxury Swiss real estate in Norway
The arrival of the super-rich from Norway is likely to bring lavish additional income into the coffers of individual cantons such as Zug. According to the Financial Times, the wealth of wealthy immigrants from the Far North totals 29 billion kroner, which equates to 2.7 billion Swiss francs, according to the country’s annual tax returns.
The first companies are already vying for potent customers from Scandinavia. For example, the Swiss real estate company Property One placed several full-page advertisements in the Norwegian business newspaper “Dagens Näringsliv” in the past few weeks, as the “Handelzeitung” reported. One advertisement features a luxurious roof terrace with an elegant lounge and an unobstructed view of Lake Zurich, an apartment in the Park Tower in Zug or a spacious property with a villa and private lake access in Freienbach (SZ).
Kevin Hinder, CEO of Property One, told Wirtschaftsblatt that his company had been involved in several transactions with Norwegians in Ticino and German-speaking Switzerland for months. It is expected that demand will continue to rise – and that Norwegians fleeing their home country actually intend to settle down in Switzerland.