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Denmark is among the world’s best locations for doing business, but overseas firms without prior knowledge of the legal, tax and regulatory hurdles can still find doing business a complex endeavour.
The World Bank ranks Denmark as the easiest place in Europe to do business and the World Economic Forum puts Denmark in the top 10 of the most competitive economies in the world. It is ideally positioned to give access to the most lucrative segments of the European Union with more than 100 million consumers. Domestically, it has a well-educated population and a strong labour market, ensuring the right talent reaches the right firms.
High flexibility and safe business environments are Danish characteristics. Establishing a business can be done in a matter of hours and at very low costs, and once complete, organisations find themselves in an enterprise hub with quick access to other developed economies. With R&D practices commonplace - particularly in the energy sector - Denmark is also an ideal place to develop new products and foster innovation, but without the right help on board, making the most of a business venture can be a troublesome task.
Starting a Business
Businesses looking to start up in Denmark must first obtain a NemID signature before depositing capital into a bank, registering with the Danish Business Authority (DBA) Webreg system and signing employees up for workmen’s insurance.
Dealing with Construction Permits
There are eight procedures to be completed when dealing with construction permits, most of which are carried out with the municipality and the Municipal Council. Construction inspection is required to be carried out before any work can commence.
Getting Electricity
Most companies will have to contact DONG Energy for inspection and works; the electrical contractor must also apply for and obtain an excavation permit from the Kommune.
Registering Property
The Danish Land Registry accepts most registration procedures online, although a transcript has to be obtained from the Danish Commerce and Companies Agency before the process can be completed.
Getting Credit and Protecting Investors
Denmark is home to a robust financial services industry and has strong regulatory procedures in place for investor protection. The World Bank and International Finance Corporation (IFC) rank Denmark in 23rd place in the world for ease of getting credit and 32nd in terms of protecting investors
Paying Taxes
There are 10 tax payments to be made each year by corporations which take an average of 130 hours to process. Environmental taxes, taxes on insurance contracts and property tax are examples of levies which businesses may be unfamiliar with.
Trading Across Borders
Businesses must complete four documents when exporting overseas and three when importing. This takes around five days to complete.
Enforcing Contracts
It takes 410 days to enforce a contract, 100 less than the OECD norm. That being said, there are more processes to complete than the world average, which can make the process rather confusing.
Resolving Insolvency
It takes, on average, one year to resolve insolvency in Denmark. The recovery rate is significantly higher than the OECD norm, as is the cost of the procedure.
Culture
It is important when doing business to make appointments at least two weeks in advance. Avoid the months of July and August as most businesses will run on skeleton staff due to the number of long holidays taken at this time of year. Punctuality is important in Denmark and ostentation is frowned upon, so be smart and well prepared, but don’t project boisterousness.
TMF Group
We have the local knowledge to help you navigate these minefields. Whether you want to set up in Denmark or just want to streamline your Danish operations, talk to us.