Pursuant to the Norwegian Tax Payment Act, all companies that pay salaries or pensions are required to ensure that the payment of tax (tax deducted at source) is guaranteed. Normally, tax money is deposited in a blocked account, a “tax withholding account”. The money in such accounts is held until it is paid out and can only be paid to the local accounting office (Kemnerkontoret). A tax deduction bond is equivalent to paying into a blocked account.

But the Tax Deduction Bond provides tax creditors with insurance in the event of a company being unable to pay their tax liability by the due date. This means that, thanks to Nordic Guarantee’s innovative solution, Norwegian companies can now release capital and let their tax money work for the business.

Only a few short weeks after its launch, the Tax Deduction Guarantee has already been receiving rave reviews from the market, and the outlook for 2012 is looking very favourable.

- Aside from the banks, we’re already the biggest provider of guarantees in Norway. With our Tax Deduction Guarantee, we’re positioning ourselves in direct competition with the banks in this area, and it’s a match I’m really looking forward to, says Andrea Möllerberg, COO at Nordic Guarantee. We must be easy to work with, responsive and price competitive with the banks. We don’t require collateral, which is a significant advantage that speeds up the process from application to final guarantee no end, continues Andrea Möllerberg.

Nordic Guarantee is investing heavily in the Norwegian market, and wants to expand even further, whilst also developing several new concepts that are currently being considered for launch in Norway.

- Our aim is crystal clear: We will protect our market leading position and compete with the banks by offering a significantly higher level of service and better terms to the contract guarantee segment, concludes Andrea Möllerberg.

Customs services provider KGH Customs Services, which has customers and offices throughout Europe, no longer needs to tie up capital for sureties and guarantees related to customs services and cross-border trade. By replacing bank guarantees with an insurance solution that frees up capital and credit facilities, KGH will secure even more favourable scope for expansion.

By partnering with Nordic Guarantee, which specialises in insurance-based contract guarantees (surety bonds), KGH Customs Services has discovered a modern and efficient solution to satisfy its guarantee requirements. In the past, KGH primarily used bank guarantees to meet its surety requirements but can now instead use insurance provided by Nordic Guarantee.

-  Nordic Guarantee’s insurance solution has allowed us to free up credit facilities, giving the company greater scope for continued growth in Europe. The desire shown by Nordic Guarantee to find a good solution that precisely fitted KGH’s needs was a major factor in us choosing them as a collaboration partner, says Sandra Hermansson, CFO of KGH Customs Services.

Nordic Guarantee provides payment guarantees and advance payment sureties in the form of insurance, so called surety bonds. This solution gives the same level of protection as a bank guarantee, but requires no collateral to be put up or any capital to be committed. In addition, the administrative process is significantly smoother and, more often than not, much quicker. Many companies that have to make use of surety services are unaware that there is an alternative available to bank guarantees, even though the banks themselves are increasingly recommending that their customers utilise an insurance solution instead of a bank guarantee as it allows both the customer and the bank to use credit facilities in a more efficient way.

-  The insurance solution provides a whole host of benefits that make it an attractive alternative, turning us into a natural partner that can play a significant role in increasing our customers’ competitiveness and potential for growth. It’s very satisfying to know that what we do helps companies such as KGH identify effective solutions for their guarantee requirements,” says Anders Wredfors, Region Manager at Nordic Guarantee.

KGH Customs Services homepage

30 travel agencies attended a highly appreciated seminar about smart travel bonds on Nov 24 2009, arranged by Nordic Guarantee Sweden. The subject was how the smart travel bond works including the legislation demand and issues on that subject. Elin Thorp from the Legal, Financial and Administrative Services Agency ‘Kammarkollegiet’ was also present at the seminar.