The most common forms of security over real estate are:
In addition, sometimes assignments will be made of claims arising under hedging arrangements (eg interest exposure), as well as assignments of claims against the seller in a share sale and purchase agreement (including assignments of claims arising under any lease guarantees provided by the seller).
All of the above forms of security entitle the mortgagee to take possession of the asset in question and dispose of it with priority over unsecured creditors.
To be perfected, a mortgage over real estate or lease contracts must be registered in the Norwegian Land Registry. A floating charge over receivables, operating assets and/or inventory must be registered in the Moveable Property Registry. Receivables can also be pledged by notice to the debtor.
A fixed charge over property can be granted by any party who is registered as owner of the property in the Land Registry, including companies, limited liability partnerships, traditional partnerships and individuals.
In some circumstances, a lender may consider reducing the security package in order to mitigate any adverse tax consequences for the borrower due to limitations on the tax deductibility of interest on loans secured or guaranteed by a shareholder or its affiliates.
Last modified 21 Jan 2026
A pledge or form of security over real estate includes the land, buildings erected on it and fixtures which form part of those buildings.
It is also possible to take security over fittings, furniture and similar moveable property. However, where moveable property is not considered to be part of the pledgor’s stock or machinery and plant, the pledge must be perfected by way of the pledgor handing over the pledged goods to the pledgee or to a third party so that the pledgor no longer has physical access to the goods.
In the case of the pledgor’s stock and/or machinery and plant, this can be secured by registration of the pledge in the Moveable Property Register.
Last modified 21 Jan 2026
Norwegian law does not recognize the principle of a trust or a split between legal and beneficial ownership.
In a structure involving several lenders, a contractual obligation is often used which places an obligation on a security trustee/agent to hold the security on behalf of the lending syndicate. This type of contractual obligation will be recognized and is enforceable. The security may then be granted in favour of the security trustee/agent on behalf of the lenders. This structure may involve a certain amount of risk for the lending syndicate if the agent becomes subject to insolvency proceedings after having received payment from the borrower, but before those funds have been transferred to the relevant lenders. This risk can be mitigated where the agent has a contractual obligation to keep the funds in a separate account, distinct from its own funds.
Last modified 21 Jan 2026
Debt is commonly traded between lenders. Syndicated lending documentation is becoming standardized based on the terms of the Loan Market Association, and this allows for free transferability of debt between lenders with the security being held on their behalf by a security trustee/agent and the debt being administered by an agent.
In addition, there are several ways of transferring debt:
Last modified 21 Jan 2026
Except where there is a violation of sanctions regulations, there are no general restrictions on granting security to foreign lenders.
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There is no stamp duty in creating a security interest. There are also no notaries’ fees. The fee for registration of security in the Land Registry is NOK 545 per pledge (as of January 2026).
Fees are also payable for security registered in the Moveable Property Register, at NOK 1,417 per pledge or NOK 983 if made electronically (as of January 2026).
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Yes, there are both financial assistance rules and corporate benefit rules which must be complied with.
Pursuant to the first paragraph of section 8-10 of the Norwegian Limited Liability Companies Act (Aksjeloven), a limited liability company can, subject to certain conditions, provide financial assistance to a third party for the purpose of acquiring the company’s shares or the shares in its holding company. The company cannot provide such assistance to the company itself for the purpose of acquiring its own shares. The statutory provision also applies to public companies (under similar provisions in the Public Limited Liability Companies Act (Allmennaksjeloven), and to a certain extent, with modifications, to companies with unlimited liability such as unlimited partnerships (kommandittselskap) and silent partnerships (stille selskap).
Financial assistance may only be provided validly up to the amount of the assets which the company may legally use for the distribution of dividends (distributable reserves). However, if the target company following the acquisition becomes a subsidiary of the acquirer (which must be incorporated within the EEA), the distributable reserves limitation will, if certain conditions are met, not apply. In brief, the conditions are as follows:
In addition, the board must report whether or not adequate security must be furnished for the claim for repayment or recovery. Section 8-7 of the Norwegian Limited Liability Companies Act and the Norwegian Public Limited Liability Companies Act limits a Norwegian limited liability company’s right to grant credit to or provide security for the benefit of its shareholder(s) or a party closely connected to a shareholder. Parties closely connected to a shareholder include companies where the shareholder has a determining influence, typically subsidiaries of the shareholder. A party is always deemed to have a determining influence over a company if it owns sufficient shares in another company as to represent a majority of the votes in that other company, or has the right to vote in or vote out a majority of the directors of that other company.
The credit to or guarantees for the benefit of such companies may only be validly granted up to the amount of the assets which the company may legally use for the distribution of dividends (distributable reserves), and only if adequate security is furnished for the claim for repayment or recovery. Whether a credit or security may legally be granted pursuant to the Act must be determined on the basis of the situation at the time when the credit or security is granted.
The term ‘security’ covers both real security (i.e. security interests, mortgages etc) as well as personal security (ie guarantees, co-debtor arrangements etc). A negative pledge from the subsidiary in connection with the shares in the company being pledged as security for a loan to a shareholder is generally considered not to involve a grant of security under section 8-7.
An exemption from this prohibition is available where the financial assistance is provided to another company within the same group of companies (konsern) as defined in the Norwegian Limited Liability Companies Act. However, if the parent of the group is not a Norwegian limited company, the financial assistance must serve the group’s ‘economic interests’ which for all practical purposes means that such financial assistance must not be used to pay dividends to the ultimate owners of the group.
The directors of a limited liability company are obliged to ensure that they act responsibly and in the best interests of the company and its shareholders with regard to corporate management.
The Norwegian Limited Liability Companies Act also contains provisions designed to ensure that agreements entered into with shareholders and other group companies are made on arm’s-length terms.
However, there is limited regulation of the precise requirements related to corporate benefit. For the assessment of corporate benefit, the following matters must be considered:
The question of whether the corporate benefit arising from a transaction is sufficient is ultimately a commercial decision to be made by the company’s board of directors.
There are other corporate law issues which include rules relating to adequate capital maintenance, restrictions on transactions between a company and connected parties and provisions relating to transactions which take place within certain periods before the company enters into an insolvency process. The Norwegian Limited Liability Companies Act contains requirements that board resolutions are required when the company makes any decision of material importance to the company.
The Norwegian Limited Liability Companies Act section 3-8 was changed with effect from 1 June 2021 and contains rules stating that ‘agreements’ between a company and its shareholders/the parent of the company’s shareholders are not binding on the company unless the agreement is approved by a board of directors of the relevant company (ie the guarantor/security provider).
The ‘agreement’ must have a ‘real value’ that is greater than 2.5% of the balance amount of the latest available audited annual accounts of the company at the time of agreement. The term ‘agreement’ also comprises guarantees and other types of security provided. The rule applies equally when the agreement is entered into by the company with someone who is acting ‘according to an agreement or an understanding with’ its shareholder. Guarantees/security which benefit a third party (such as banks) may thus fall within the scope of section 3-8.
There are certain exceptions to this, i.e. for agreements entered into in the course of the ‘ordinary business’ of the company and is based on customary commercial terms and principles. Furthermore, guarantees or security provided on behalf of a group company, in accordance with section 8-7, fourth sub-section, no 2 and 3, are exempted from the scope of the clause providing that the shares of the subsidiary company must be wholly owned by the parent company. Likewise, agreements to provide financial assistance from the company to a third party for the purpose of acquiring its own shares or the shares in its holding company, in accordance with section 8-10, are exempted from the scope of the clause. These exceptions also apply to public companies (by virtue of similar provisions in the Norwegian Public Limited Liability Companies Act).
If the agreement/security in question does not fall within the exemptions of section 3-8 of the Norwegian Limited Liability Companies Act, the procedure set out there must be followed for it to be valid. Section 3-8 also sets out a formal procedure which must be followed in these matters, namely that (i) the board must prepare a report in accordance with section 2-6 of the Norwegian Limited Liability Companies Act where the agreement/security and the value of the company’s contribution is set out in more detail and that the equity and liquidity of the company will remain sound, (ii) the board must separately declare that the agreement is in the interest of the company, (iii) the declaration and the report must be dated and signed by all board members. The report and declaration from the board must all be sent to all shareholders with known address as well as to the Norwegian Business Register for registration.
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There are no restrictions on payments made to foreign lenders under a security document or loan agreement. There is no withholding of tax in Norway on interest payable to foreign external lenders. This applies regardless of the lender being resident within the EU, EEA or in any other jurisdiction.
Last modified 21 Jan 2026
A creditor can agree to subordinate its security interest to that of another creditor by a priority agreement, usually in the form of an intercreditor agreement. The agreement will govern the subordination of the debt as well as the security and will cover matters such as rights of enforcement. If the agreement covers any security rights which are registered (for instance in the Norwegian Land Registry), the ‘reversal’ of or change in priority must be registered for it to be perfected.
The Norwegian Liens Act (Panteloven) provides for a statutory, preferential lien, e.g. in favour of the bankruptcy estate as security for the necessary costs of the bankruptcy proceedings. A security interest is created in any pledged asset belonging to the debtor at the time of commencement of the bankruptcy proceedings and other assets pledged as security for the obligations of the debtor at that time.
The lien amounts to 5% of the value of the asset but is limited to 700 times the court fee (the current court fee is NOK 1,345 from 1 January 2026) for each asset registered in an asset register (e.g. real property, ships, aircraft). The lien takes priority over other statutory liens and all other encumbrances on the asset and can only be used to cover the necessary costs if no other (unencumbered) assets are available to cover these costs.
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If a choice of law is a sensible choice (i.e. not chosen to deliberately avoid a national law or policy), the Norwegian courts will give effect to it, but Norwegian law will apply in certain circumstances, e.g. regarding perfection of security in Norway.
Norwegian law should be chosen to govern any security document under which a Norwegian company creates security over a Norwegian asset.
Where the asset that is the subject of the mortgage or charge is situated in another country, a security document governed by the law of that country will often be appropriate, and the choice of that law will be recognized by the local courts.
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A security interest which has not been validly perfected is void against any third parties which have a validly perfected security interest in the same asset, as well as against any bankruptcy estate.
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A holder of security over land is not liable for environmental damage provided it does not take possession of the land and does not itself cause, or knowingly permit, damage to the environment.
Care must be taken if the security is enforced because owners of land that operate, use or possess the land can be liable under strict liability rules, for environmental damage from or on that land, even if the owner did not cause the damage and further even if there has been no fault or negligence on the part of the lender/owner. A mortgagee should not go into possession of land without careful consideration of the implications of potential environmental liability.
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Often the loan agreement itself will describe events of default which must have occurred before the lender can enforce its security. Typical events of default include non-payment of interest or principal, breach of representation, breach of covenant, material adverse change and insolvency. The agreement will also often describe formalities to be fulfilled before enforcement of the security can take place.
If the agreement itself does not describe events of default or formalities to be fulfilled before enforcement takes place, the Norwegian Liens Act lists specific events where the lender can demand repayment (e.g. non-payment of interest or principal sum, insolvency). If the facility is an on-demand facility, all the lender need do is demand repayment.
The request for repayment should be sent by registered mail, with a defined two-week deadline for repayment.
Under the Norwegian Enforcement Act (Tvangsfullbyrdelsesloven), the secured party or lender may on the occurrence of a default event demand a compulsory sale of the secured property.
The Enforcement Act provisions are mandatory, and enforcement must be effected with the assistance of enforcement authorities (being the court or the Execution and Enforcement Commissioner). It is not possible to contract out of the provisions of the Act in the loan agreement. However, the parties may agree a procedure of enforcement that will take place without court intervention, but this can only be done after the default has occurred and not as a part of the original loan agreement.
To enforce the security, the lender must request enforcement before the competent court. The filed request must comply with both the material and formal requirements set out in the Enforcement Act.
The dealing court will decide whether a compulsory sale should be conducted by a court appointed administrator or by way of public auction by the Execution and Enforcement Commissioner, or if enforcement should take place by way of taking possession.
In respect of security over financial collaterals the Norwegian Financial Collateral Act (Lov om finansiell sikkerhetsstillelse) entitles the parties to agree on a procedure of enforcement in the agreement, as distinct from security in real property. This is only relevant for financial collateral such as bank accounts and shares and other securities.
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There are two non-insolvency proceedings under the Norwegian Bankruptcy Act (Konkursloven). A debtor company in financial difficulties may apply for debt settlement proceedings before the court, either as a request for compulsory composition or as a request for voluntary composition.
A voluntary composition arrangement seeks to reach an agreement between the creditors of a company, which typically involves arrangements for reduced payments to creditors. Such an agreement has to be approved by all creditors (secured and unsecured) affected by the proposed agreement in order for it to be valid. Therefore, a voluntary composition agreement will not affect a secured creditor unless he voluntarily accepts the agreement.
A compulsory composition can be established by a vote of the unsecured creditors and requires a qualified majority of the votes. A lender with security will not be affected by the compulsory composition.
The use of formal composition proceedings prevents creditors from enforcing their security without the consent of the creditors’ committee during the first six months of the composition proceedings (for claims established prior to the opening of the proceedings). Likewise, secured creditors cannot implement enforcement sales unless the creditors’ committee grants its consent.
In addition to the procedures outlined above, a preliminary restructuring act has been passed. The Norwegian Restructuring Act (Rekonstruksjonsloven) is in effect until 1 July 2026. The Restructuring Act was passed to mitigate the economic effects of the COVID-19 pandemic and the main purpose was to reduce the risk of unnecessary bankruptcies of viable businesses that have suffered a sudden loss of revenue due to the COVID-19 outbreak.
The Restructuring Act allows a debtor to enter into restructuring negotiations in order to resolve liquidity issues and establish a payment plan with its creditors. Such negotiations may limit a creditor’s right to seize or enforce assets from the debtor and may allow the debtor to incur additional credit to finance the operation of the business as well as improve the prospects for converting debt into equity in connection with the restructuring.
Furthermore, additional credit incurred to enable the debtor to continue its operations during the reconstruction period may be secured with a lien with priority over previously established liens. The Restructuring Act also opens up for exemptions from the statutory priority of corporate tax claims, VAT claims etc and abolish the current principles of equal treatment of creditors upon voluntary compositions and a minimum dividend upon compulsory composition.
Furthermore, informal or private debt restructurings also exist. No statutes govern these proceedings, although the principles used are often based on those found in formal composition arrangements.
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Security rights that are legally protected before the commencement of bankruptcy or composition proceedings, will be recognized in insolvency, assuming that the agreement establishing the security right is valid. Legal protection is in most cases achieved either through registration or notification, depending on the type of security.
However, the debtor’s granting of security may be reversed if the security unfairly favours one creditor at the cost of the others at a time when the financial situation of the debtor was weak or became materially weaker after the security was granted. Such transactions/granting of security can be reversed within a time limit of 10 years.
The security may also be deemed void if:
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The priority of security interests is, as a main rule, determined by the date of perfection of the security (normally either by way of notification or registration).
The holder of a perfected security interest is entitled to the whole of the proceeds of sale of that asset without deductions other than the cost of realization.
The Norwegian Liens Act provides for a statutory, preferential lien in favour of the bankruptcy estate as security for the necessary costs of the bankruptcy proceedings. A security interest is created in any pledged asset belonging to the debtor at the time of commencement of the bankruptcy proceedings and other assets pledged as security for the obligations of the debtor at that time. The lien amounts to 5% of the value of the asset but is limited to 700 times the court fee (the court fee is NOK 1,345 from 1 January 2026) for each asset registered in an asset register (eg real property, ships, aircraft). The lien is preferential to other statutory liens and all other encumbrances on the asset and can only be used to cover the necessary costs if no other (unencumbered) assets are available to cover these costs.
In the event of bankruptcy, certain unsecured claims have legal priority such as the salary claims of employees and taxes.
Unsecured creditors rank behind secured creditors and rank equally between themselves (the pari passu principle).
Last modified 21 Jan 2026
Which assets and rights are considered to be real estate or real rights over which security can be granted to a lender?
A pledge or form of security over real estate includes the land, buildings erected on it and fixtures which form part of those buildings.
It is also possible to take security over fittings, furniture and similar moveable property. However, where moveable property is not considered to be part of the pledgor’s stock or machinery and plant, the pledge must be perfected by way of the pledgor handing over the pledged goods to the pledgee or to a third party so that the pledgor no longer has physical access to the goods.
In the case of the pledgor’s stock and/or machinery and plant, this can be secured by registration of the pledge in the Moveable Property Register.
Last modified 21 Jan 2026