The municipality of Bø in North Norway has moved ahead with tax breaks as it positions itself as an Arctic tax haven.
Norwegian financial media E24 reported in December that Bø, located in the Vesterålen region of Nordland county, was the country's first municipality to reduce inheritance tax for its residents.
Since this January, moneyed inhabitants of the Bo region of Vesteralen pay less than half of the national wealth tax — 0.35% of their total holdings rather than 0.85%.
[Bø wants to be] Norway’s answer to Monaco"
The local council hopes to attract some of Norway's ultra-wealthy at a time when falling oil prices mean that many in the highly taxed nation are starting to worry.
"In the north of Norway we're known for fishing and tourism. We have the northern lights and we have beautiful nature, but it's not enough," said Sture Pedersen, head of the local council in Bo.
"We're losing people every year. So instead we're lowering the wealth tax so that we can become a business-friendly region," the Sunday Times reported.
Martin Wikborg, a tax lawyer and partner with the Oslo law firm Magnus Legal, questions the measure. "Unfortunately, many wealthy Norwegians are leaving Norway because of the particular net-wealth tax regime," he said. "A lot go to the UK, particularly to London. Some others go to Cyprus or Switzerland. They say it's unfair that Norwegian resident owners are hit with a tax that foreign owners do not have to pay."
Pedersen previously told E24 that he wanted Bø to be "Norway's answer to Monaco". The municipality currently has 2,600 inhabitants, Many of the residents work in tourism or cod fishing.
Between 400 and 500 of its current residents are expected to benefit from the tax break.