Successfully investing in Denmark


published on May 16, 2018


How do you assess the current economic situation in Denmark?

Denmark has reported stable growth, yet below the EU's average. As a consequence of the global financial and economic crisis, Denmark's GDP increased again slightly only between 2011 and 2014. In 2016, it rose by 2.0 per cent and in 2017 by 2.6 per cent. In 2017, the rate of inflation was 1.1 per cent and the unemployment rate was about 6 per cent.


Compared to other EU member states, the average working time of a full-time employee is significantly lower in Denmark. In 2017, it was 39 hours.

How would you describe the investment climate in Denmark? Which sectors offer the largest potential?

The economic landscape is shaped by a large number of often medium-sized industrial companies, the majority of which are highly specialised technology leaders. Traditionally, Denmark has been the headquarters of large global companies also in the shipping, food and brewing industries. Also the mechanical and plant engineering, the pharmaceutical industry and the tourism industry play an important role. Due to the country's extensive welfare system, the public sector is very important and employs over 30 per cent of the working population. Denmark strives to expand in knowledge-based and high-tech industries of the future. Great emphasis is placed on Research & Development.  


What challenges do German companies face during their business ventures into Denmark?

The difference between the Danish and the German labour market is mainly that the former is very flexible and subject to only few acts of law, but at the same time more collective bargaining agreements apply. Trade unions are thus very widespread and influential. The Danish labour market model can be described as “Flexicurity” (Flexibility + Security).  This leads to a high level of risk tolerance among employers and a high degree of mobility among employees.  Every fourth Dane changes his or her job every year.


The Danish tax regulations for employers and employees can be a challenge. If a permanent establishment is established in Denmark, the employer is required to deduct and pay taxes. In addition, foreign service providers are required to register their activities in a special register (the RUT register). If they fail to do it, the company is at risk of a fine of 10,000 Danish crowns (DKK). Currently, the Danish Parliament is debating on a bill which would enable imposing daily fines on foreign companies for the failure to register their activities in the RUT register, with the fines being charged until they properly register. This rule would become effective from 1 July 2018.


On the other hand, forming a company is easy in Denmark because the procedure can be very quickly handled via an online portal. The Danish corporation tax is 22 per cent and thus significantly lower than in Germany. 

What opportunities does the cross-border Øresund Region offer investors?

The Øresund Region is a gateway to Europe. So far, over 300 high-tech companies have established their presence in this cross-border region, approx. 100 of whom operate in the bio-tech sector.


In your opinion, how will Denmark develop?

A business-friendly policy is said to create new jobs and increase the GDP. The government intends to increase public spending; furthermore, a comprehensive tax reform is being planned.  


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Lars-Göran Larsson


+46 40 6607 358
+46 40 6270 404

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