Joint venture – Collaborative enterprise
Establishing a joint venture can be an effective way for businesses and investors to collaborate in the Norwegian market. Joint ventures enable parties to combine resources, share risks and bring together complementary expertise or capital for a common commercial objective.
This article provides an introduction to how joint ventures may be structured under Norwegian law and some of the legal and practical issues that should be considered when establishing the cooperation.
What is a joint venture?
A joint venture, or fellesforetak in Norwegian, is a structured collaboration between two or more parties pursuing a common business objective. In Norway, as in other jurisdictions, a joint venture may be established for a specific project or as a long-term cooperation.
The parties may contribute different capabilities or resources. One participant may, for example, contribute industry expertise, technology or an existing business, while another provides market access, assets or capital.
Under Norwegian competition law, a joint venture that on a lasting basis performs all the functions of an autonomous economic entity may constitute a concentration for merger-control purposes. Other joint ventures may instead need to be assessed under the rules on anti-competitive cooperation.
Why establish a joint venture?
Joint ventures allow parties to pool resources and capabilities into a common business. Depending on the purpose of the cooperation, this may provide greater capacity, access to complementary expertise, sharing of risk and costs, or access to capital and new markets.
A joint venture may also be used where parties wish to make an investment or acquisition together rather than independently. Businesses may transfer assets, operations or parts of their existing businesses to the joint venture, or establish a new business to pursue a particular commercial opportunity.
For international businesses, a Norwegian joint venture can also provide a structure for entering the Norwegian market together with an existing Norwegian business or investor.
How to establish a joint venture
In Norway, joint ventures are frequently established as private limited liability companies (AS), with the joint venture parties holding shares in the company. Depending on the circumstances, partnerships or limited partnerships may also be considered.
A contractual cooperation that is not formally incorporated as a separate company should nevertheless be structured carefully. Depending on how the business is organised and how risks and liabilities are allocated, the arrangement may fall within Norwegian partnership law even if the parties have not intended to establish a formal partnership.
Where an AS is used, the cooperation will normally be regulated through a shareholders' agreement in combination with the company's articles of association.
The shareholders' agreement will typically address matters such as:
- the purpose and business plan of the joint venture;
- initial capital contributions and future funding obligations;
- equity contributions, shareholder loans and external financing;
- governance, board representation and reserved matters;
- dividend and distribution policy;
- transactions between the joint venture and its shareholders;
- contribution of personnel, assets, technology or other resources;
- transfer restrictions and changes in ownership;
- deadlock mechanisms;
- tag-along and drag-along rights where appropriate; and
- termination, exit and dissolution of the joint venture.
The articles of association should be coordinated with the shareholders' agreement, particularly where provisions concerning share transfers, pre-emption rights, share classes or governance are intended to have corporate effect.
Where financing is required, the funding structure should be considered together with the governance arrangements. Future capital calls, shareholder loans, external debt financing and the ability of the joint venture to provide security or make distributions can all affect the commercial balance between the parties.
In cross-border joint ventures, these arrangements should also be coordinated with the transaction documents and mandatory Norwegian company law. LexOslo advises international investors, companies and foreign law firms on Norwegian law issues arising in connection with investments, transactions and joint venture arrangements.
Joint venture structures may also have consequences for beneficial ownership reporting. Ownership percentages are not the only relevant factor: voting arrangements, board appointment rights, veto rights and other contractual control mechanisms may also be relevant when identifying the beneficial owners of a Norwegian joint venture company.
Competition law considerations
Competition law should be considered at an early stage when establishing a joint venture, particularly where the joint venture parties are actual or potential competitors.
A joint venture that on a lasting basis performs all the functions of an autonomous economic entity may constitute a concentration under the Norwegian Competition Act. Where the applicable turnover thresholds are met, the establishment of the joint venture may therefore require notification to the Norwegian Competition Authority before it can be implemented.
Under the current Norwegian thresholds, notification is generally required where the undertakings concerned have combined annual turnover in Norway exceeding NOK 1 billion and at least two of them each have annual Norwegian turnover exceeding NOK 100 million.
Joint ventures that do not constitute a concentration may nevertheless be subject to the prohibition against anti-competitive cooperation under section 10 of the Norwegian Competition Act and, where applicable, Article 53 of the EEA Agreement. This can also be relevant to restrictions between the joint venture and its shareholders, or cooperation between the shareholders outside the joint venture.
Particular care is required where competitors cooperate on bids, acquisitions, projects, customers, pricing or markets that they could potentially pursue independently. The fact that the parties have established a joint venture does not in itself remove competition-law concerns.
The appropriate competition-law analysis will therefore depend on the purpose and scope of the joint venture, the relationship between the parties and the markets in which they operate.
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(Initally published 11 October 2024 – Updated August 2026)
How LexOslo can assist
Finance law is at the core of LexOslo's practice. We also advise on transactions and corporate and commercial matters, including joint ventures, particularly where the work has a financing, investment or cross-border dimension.
We can assist with the Norwegian law aspects of establishing and structuring joint ventures, including shareholders' agreements, governance arrangements, funding structures, corporate documentation, transactions between the parties and the joint venture, and related Norwegian regulatory issues.
If you require Norwegian law assistance in connection with a proposed or existing joint venture, please contact LexOslo.
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