Norwegian Startups Are Taking Over New York For Lower US Tax Rates

Norway businessmen are coming in hordes to New York to set up startup companies. They are armed with fresh ideas and good money. Many startups are already in the take-off stage, according to business sources.

The tax heavy Nordic country’s budding entrepreneurs are in high praise of New York. They say Big Apple is luring them because of its relatively lower tax rates and lighter regulations vis a vis their domestic market.

“New York is a financial center and one of the fastest-growing regions in the world when it comes to venture capital investments,” commented Ola Forsstrom-Olsson, senior adviser at the New York offices of Norway’s Innovation Norway.

Another attraction is New York’s larger market size, unlike the smaller Norway market.

Leading this Nordic invasion are Norwegian startup companies in search of investors, favorable tax treatment and mass market of America.

Startups boom engulfed Norway as a diversification from the country’s oil-centric economy. In 2018 alone, as many as 60,000 startups were launched, compared with 40,000, some 10 years ago.

Norway’s high tax regime

Ryan McMaken, a senior editor at the think tank Mises Institute mentioned Norway’s high taxation and regulation as a challenge to start-ups. That is driving investors toward the U.S as a fertile ground for startups and newer companies.

A startup success story is already doing the rounds.

Norway’s Minimeis launched a baby carrier product in the U.S market three months ago. It got the backing of a large investor in New York.

“Now, just a few months later, they are up to the volume of 10,000 units per month in the US alone, mostly online, not even counting the rest of the world,” said Forsstrom-Olsson.

Target, Buy Buy Baby, Nordstrom and Pottery Barn Kids are among the stores that placed bulk orders for Minimeis.

The irony is hard to miss. New York is known for high taxes and a high degree of regulation in the US.

Big Apple’s cost of living and taxes are considered the highest. But it pales before Norway where the total tax burden is 45 percent of GDP.

The country of just over 5 million reportedly charges personal income tax at around 40 percent. The corporate tax also ranges from 28 percent to a whopping 78 percent.

Trump blasts New York’s high taxes

Meanwhile, President Donald Trump hit out at the New York’s governor and Attorney General and accused them of driving away businesses from the state because of a ‘too high’ tax rate.

Trump took to Twitter to vent his ire against Gov. Andrew M. Cuomo and the Attorney general, Letitia James, who are Democrats.

Without mentioning James by name, the president alleged the AG has been “harassing all of my New York businesses in search of anything at all, they can find to make me look as bad as possible.”

Continuing his tirade, Trump said New York tax rate is driving away residents “like never before.”

Replying to Trump, Gov. Cuomo said: “President Trump is in “la la land.”

“If he is worried about New York taxes, he should repeal the New York tax penalty called the SALT tax that he and Republicans passed which targeted New York and raised our taxes by $15 billion,” Cuomo said in a statement.

AG James replied that Trump’s grudge is understandable and that stems from her actions that shook up Trump’s charity organization and exposed its political work and the huge mismatch between its revenue and expenditure.