NORWAY Law and Practice Contributed by: Ylva B Gjesdahl Petersen, Marius Holm Rynning and Johan Fredrik Brende, Thommessen
4. Government Inducements 4.1 Subsidy Programmes
• compliance; • no insolvency; • litigation; and • disclosed information.
The Norwegian government offers several pro - grammes to incentivise equity financings in growth companies. • Innovation Norway offers certain grants, start- up loans, innovation loans and guarantees to support Norwegian growth companies. The government has also backed several seed funds through Innovation Norway aimed at providing financing to growth companies. • The Research Council of Norway provides a tax deduction scheme (SkatteFUNN), which reduces the costs related to research and development. • Export Finance Norway provides govern - mental loans and guarantees for investments in Norway that contribute to exports or to other transactions that generate value within Norway. Additionally, Norway has signed a contribution agreement with InvestEU for green, digital, small and medium-sized companies financing, which covers financial products and projects under the three InvestEU policy windows: • sustainable infrastructure; • research, innovation and digitalisation; and • small and medium-sized businesses. Moreover, the Norwegian government invests in numerous growth companies and venture funds, directly or indirectly, in Norway and internation - ally, through the state-owned investment com - panies Investinor, Argentum, Nysnø and Norfund as well as through regionally based seed funds.
Normally, the more mature the company is, the more extensive the representations and warran - ties. It can be noted that, similarly as with M&A transactions, the representation and warranty catalogue is somewhat less extensive/compre - hensive than typically is seen in, for instance, the USA. In terms of recourse in the event of breaches of any representation or warranty, a key point to note is that a Norwegian limited company – as a matter of law – may not indemnify investors in connection with a share capital increase. Any loss for breach of warranties or otherwise there - fore needs to be compensated at shareholder level. Normally, this is done through the issuance of compensation shares in the event of a loss, as existing shareholders would not normally be willing to offer any cash compensation to new investors in the event of a breach of warranties by the company. In some cases, the venture capital investor will need to be issued a number of warrants equal to the maximum number of compensation shares, as the issuance of new shares will require the resolution by the general meeting (with a two-thirds majority requirement). In most cases, however, the shareholders will – in the shareholders’ agreement – undertake to vote for the necessary resolutions in order to issue the compensation shares. A loss can be defined in different ways, but a common approach is to look at the value reduction of all the shares in the company and multiply it by the investor’s ownership share.
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