A guide to the Transparancy Act and which companies it applies to

In today's modern society, openness and transparency are essential for trust between companies and their stakeholders. In Norway, the Transparency Act has been introduced to ensure that larger businesses operate with a high degree of transparency. In this blog post, we will take a closer look at which companies the law applies to and which criterias must be met.

The Transparency and its scope of application:
‍The Transparency Act targets "larger businesses that are dresident in Norway and that offer goods and services in or outside Norway." This means that both Norwegian and foreign companies can be covered by the law, as long as they meet certain requirements.

The requirements for Norwegian business
For a Norwegian business to be subject to the Transparancy Act, it must meet the following criteria:

Conduct business domiciled in Norway:
A business is considered domiciled in Norway if it is either incorporated in accordance with Norwegian company law or has actual management in Norway. This ensures that the law applies to companies that are legally established in the country or have significant business activity here.

The business offers goods and services in or outside Norway:
The term "goods and services" shall be interpreted as either goods or services. In other words, it is sufficient for the business to offer either goods or services in the country. It is important to note that it is not required that the goods or services be provided for consideration, which distinguishes the Transparency Act from the general business concept.

The business must be a "larger business":
For both Norwegian and foreign companies, the requirement to be a "larger business" applies in order to be covered by the Transparency Act. What is characterized as a larger business depends on whether the business fulfills the conditions in the Accounting Act § 1-5 or exceeds two of three conditions in the Openness Act § 3 nos. 1-3.

According to § 1-5 of the Accounting Act (Regnskapsloven), this mainly includes public limited companies and listed companies. Alternatively, a business can be considered large if, on the balance sheet date, it fulfills two of the following three conditions, in accordance with § 3 of the Transparency Act:

• Sales revenue of 70 million.
• Total assets of 35 million.
• Average full-time work over 50

According to Section 3 a) of the Transparency Act, parent companies must be considered "larger enterprises" if the conditions are met for parent and subsidiary companies viewed as a unit (consolidation rule).

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