This is Norway, the land of fjords, lakes and wealth taxes. That's right. Five years ago, Norway's center left government raised the wealth tax from 0.85% to roughly 1.1%. And soon after, the world was treated to headlines like this, more than 30 Norwegian billionaires left after a wealth tax hike. The failure of Norway's wealth tax hike. It's a warning. What's behind Norway's wealth tax exodus? And yeah, something clearly happened in 2022 that caused especially many wealthy business owners to leave Norway in three different waves. But this type of coverage, it often raised more questions for me than it answered. First, 30 billionaires left? Okay, Norway isn't a populous country, but how big was that exodus really compared to the billionaires and millionaires that stayed behind? Did so many people leave that it made the wealth tax ineffective, or that it hurt the Norwegian economy? But perhaps more importantly, why did a tiny tax tweak of just one quarter of a percent trigger a sudden panic when Norway has had a wealth tax for decades, and Switzerland, where most of them went, also had a wealth tax, it all just didn't add up. So we had to go beyond the headlines. We spoke to Norwegian tax experts and dug into the data ourselves, all to answer why are so many millionaires leaving Norway?

First, let's start with the facts. This graph shows business owner tax refugees identified by independent journalists at the Norwegian Broadcasting Corporation. Sure, while this increase in millionaire business owners leaving after 2022 and then a renewed spike in 2025 is not statistically watertight proof that the wealth tax caused the exodus. But it clearly shows an unusual number of wealthy business owners left right after this hike. But 50 millionaires leaving in a year? Is that actually a lot? And are these potentially big contributors to the wealth tax? That's exactly what Norwegian journalist wanted to know. And they found that if we look at the total amount of wealth that can be taxed and how much belonged to the people that left. We can see that it's just about 2%. That makes for less interesting headlines, doesn't it? 2% of millionaire wealth left after Norway hiked its wealth tax by 0.25%. As we can see here, that was not enough people leaving to offset the increased revenue from the wealth tax. After this hike. So I don't think that this headline that called Norway's wealth tax a failure makes much sense. So instead, we should go with this headline, Norway's Lessons for Europe on wealth taxes. Just let some millionaires go. No, I don't think so either, because some things were still not adding up for me in this entire saga. First of all, why were most Norwegian millionaire business owners heading to Switzerland, where they also have a wealth tax which crucially brings in more revenue than in Norway? Second of all, look at this wealth tax revenue as a share of total government revenue. It's almost nothing. And crucially, lower than Switzerland. And sure, of course in Switzerland wealth taxes are different per region. And so perhaps Norwegian millionaires were just moving to regions with very low wealth taxes. But if these tiny wealth taxes are so crucial to the wealthy, then why do we not see massive migration inside Switzerland itself, meaning that there would be no wealth tax revenue at all, but perhaps even more puzzlingly. Why are so many business owners leaving Norway?

Because when I looked into how Norwegian Wealth taxes specifically worked, I found that they heavily favored business owners over, for example, landlords. You see, if in Norway you are a landlord or you have a lot of money in the bank, or you own a lot of stocks or even if you own a lot of fancy cars, then you will pay a wealth tax of about 1% over all of your assets, minus all of your debts. But there's a catch. Only Norwegian residents with a worth above €173,000 have to pay a wealth tax, and there is a huge discount for the home that you actually live in. Only the wealthiest 12% of the population, therefore, in Norway, actually pay the wealth tax. But if you are a small business owner like me, you are lucky because you will pay a far lower wealth tax than a landlord or someone who just has a lot of money sitting in the bank. You see, because private businesses and especially startups are very hard to properly value if nobody is buying or selling their shares. Norway's government has said that, look, we value private businesses simply by looking at hard assets like bank accounts or buildings, and then we subtract depths from those. But we do not look at soft assets like intellectual property, brand value, customer loyalty or proprietary technology, or even future potential. This is absolutely crucial because some economists have estimated that soft, intangible assets are so important that private firms in Norway end up valued at 70 to 90% below their true market value. For tax purposes. This could explain why Norway, despite having a wealth tax for well over a hundred years, actually has a lot of billionaires per person, almost as many as the US. But it does leave our main question and answered why did so many millionaire business owners leave Norway after 2022?

People like fishing magnate Kjell Røkke or crypto entrepreneur Fredrik Haga, who told the Financial Times that I had to choose, am I based in Norway or do I want this company to succeed? It's not about not wanting to pay taxes, it's about paying taxes on money that I don't actually have. But strangely enough, it looks like it was not actually the wealth tax hike itself that triggered the exodus, but rather the exit tax that Norway imposed to ironically try to keep entrepreneurs from fleeing the wealth tax hike. You see, Norway's wealth tax does not tax all wealth inside the country, but rather the wealth of all people who live inside the country. So in theory, you could always dodge Norway's wealth tax by simply moving abroad. And this is why Norway had an exit tax for a long time. If you want to change your tax residency, then you face an exit tax of about 38%. And this comes in the form of a capital gains tax on all of your investments before you leave, even if they have not been profitable yet. This is crucial for business owners because their company could be, on paper, worth billions, even if it's not making any profits. And crucially, here, the Norwegian state calculates the value of a private company differently for the capital gains tax than for the wealth tax. That is, if you sold any shares, do, for example, venture capital investors, the government would say, now we know what your company is worth. For example, if you have a startup where your shares were valued by investors at 10 million last year, you immediately owe 3.7 million just for leaving. Realizing this is when things finally started falling into place for me. Norway's wealth tax was famously light on entrepreneurs and startup founders. But the capital gains exit tax? Oh boy, that could cost people like Mr. Røkke and Haga millions. But crucially, the exit tax had before 2022 a massive loophole that everyone knew about. If you left the country and did not sell your shares within five years, the tax obligations simply vanished. So in anticipation of a millionaire exodus after this small wealth tax hike, the government wanted to close that loophole. And this meant that if people like Mr. Røkke or Haga wanted to avoid paying the exit tax, they had to move quickly and leave the country in 2022, avoiding the capital gains exit tax, not avoiding the wealth tax itself saved them millions. Indeed, Mr. Haga himself mentioned the capital gains exit tax rather than the general wealth tax. In his blog on why he left Norway. The exit tax cat and mouse game can explain two subsequent spikes in Millionaire migration, even after the loophole was closed in 2022. First, throughout 2023 more entrepreneurs left betting they could defer payment indefinitely as long as they did not sell their shares. And then in 2024, the government put a stop to that through a 12 year payment gap, effective immediately. And now it didn't matter if you sold or not. Within 12 years of leaving Norway, you had to pay the tax period. No exceptions, no extensions, no loopholes. This could have finally helped to stop the exodus because as you can see here, millionaire departures dropped to just 12 in 2024. However, in 2025, we again see a new spike, which was apparently because the center left party won the election again and some entrepreneurs feared further tightening and especially further uncertainty about increased exit taxes. So, to answer our main question, why were so many millionaires leaving Norway? I think the most plausible explanation is that it was not the minuscule wealth tax hike that favors business owners, but rather a massive 38% potential capital gains tax on unrealized shares.

But given that we've seen that even in response to that, the total wealth that left was actually not that much. Research so far on the effect of millionaire migration has revealed that the effects on Norway's economy have been very minor, even though the businesses that millionaire refugees left behind did suffer, potentially because they could be managed less effectively from Switzerland. Perhaps more interestingly, research on the wealth tax before 2022, not the exit tax, has shown that people who faced a higher wealth tax started investing more in their businesses, which, as we've seen, are taxed at a lower rate within the traditional wealth tax. However, when it comes to the current exit tax that is now very strict, there are serious concerns that this is hurting Norway's potential as a startup hub compared to, for example, Stockholm in Sweden. You see, for young, ambitious entrepreneurs, it's pretty normal to start a business in your home country first, but then to scale it to London or New York or San Francisco, where there are far more investors. However, with the current exit tax startup, founders may need to then pay a massive tax bill to the Norwegian states if early investors valued the business highly, even if that value has not yet materialized. Therefore, I think that the world can learn three lessons from Norway wealth tax experience. Number one, tiny wealth taxes like the one in Norway and Switzerland, do not scare away many millionaires, but also don't raise a lot of money for the state. Lesson number two by taxing unproductive wealth like houses and bank accounts more than active businesses, you can actually stimulate investments in these businesses and therefore the economy. Lesson number three. On the other hand you have to be quite careful with exit taxes. If these hit entrepreneurs far harder than anyone else, you can expect that a lot of them will leave. And perhaps even worse, you can maybe discourage them from starting a business in your country. In the first place. But yeah, these are my takes. What do you think? Did you find my analysis that Norway's millionaire migration was more about exit taxes than about wealth taxes convincing? Do you have high hopes for wealth taxes, or do you think that they are slightly overrated? Let me know in the comments below.