Investing through subsidiaries

Real estate investments are made through subsidiaries to ensure sound risk management and to protect Norges Bank and the fund’s assets.

Investments in real estate differ from investments in listed equities and bonds. A real estate transaction will often take months from first discussions to completion. Purchase contracts, joint venture agreements when the investment is made with a joint venture partner, and asset management and property management agreements need to be negotiated individually in line with local market conventions and rules. Due diligence analyses of various risk factors are also performed ahead of each investment.

The Ministry of Finance has set rules for real estate investments in the fund’s mandate. These rules permit Norges Bank Investment Management to invest in real estate through Norwegian or foreign entities. Unlisted companies and real estate structures must be registered in countries that Norway has tax treaties with or countries that give Norway the right to obtain tax information under other international agreements.

The investment risk associated with real estate is not necessarily limited to the sum invested. Norges Bank Real Estate Management has assessed suitable holding and operating platforms for the implementation of real estate investments to protect against these risks.

It is good risk management and standard practice in the real estate industry to invest through subsidiaries.

The fund’s tax position depends on local rules and on the bilateral tax treaties that Norway is party to. It is important for the fund that it pays tax in accordance with local rules, but also that it does not incur more tax than necessary. Expected tax costs are therefore among the factors considered when deciding on a holding structure.


Since 2011, Norges Bank has invested in continental Europe, including France, Germany and Switzerland, through a holding and management platform in Luxembourg. Logistics investments in the UK are also held from Luxembourg.

We intend to migrate the Luxembourg companies to Norway once the relevant provisions in Norwegian law enable company migration.

The subsidiaries in continental Europe are financed with equity and intercompany loans. The use of intercompany loans helps promote efficient cash management, including the repatriation of income back to the fund. These loans also reduce the tax base. All our structures, including the use of intercompany loans, comply with relevant laws and regulations on tax allowances, capitalisation and transfer pricing.

The fund’s investments in Germany and Switzerland are held directly by subsidiaries in Luxembourg. The assets in France are held by French special-purpose entities also owned by subsidiaries in Luxembourg.

The partnership with Prologis Europe for the European logistics portfolio is held through a Luxembourg company with more than 190 underlying property companies in Luxembourg and the European markets we invest in.


Under English law, foreign sovereign investors are exempt from income tax and capital gains tax on property sales. The fund has established holding structures in the UK that meet the requirements for such an exemption, using tax-transparent English Limited Partnerships for real estate investments.


In the US, the fund is exempt from taxation under local laws because it is owned by a foreign government. The real estate holding structures take the form of local tax-transparent entities with limited liability. Properties are held by private real estate investment trusts.

The US subsidiaries are registered in Delaware. Because the fund is exempt from US taxation, the choice of state for the establishment of the subsidiary has no tax implications for the fund, but Delaware has well developed company laws and an efficient and respected court system for dealing with company law disputes. It is therefore widely used in the US as a preferred state for forming and registering companies.


The investment in Asia was made through a Japanese regulated joint venture company, which in turn has acquired ownership interests in five underlying real estate assets. This structure is a common way of owning real estate in Japan. The ownership is held through two Norwegian subsidiaries of Norges Bank.

Last saved: 08/07/2022