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International Company Relocation Opportunities: Denmark
Denmark has one of the most wanted business climates in the world, categorized by economic growth, as well as regulatory, and political stability. The country is an affiliate of the EU and bound by virtually all EU regulations under Danish laws. The country usually takes the top spot as the least corrupt country in the world. It maintains a policy of fixed exchange rates.
Krone is their official currency, which is pegged near the Euro. Its economy has grown and became a modern day market economy, dependent on international trade that permits unlimited import or export of goods or services. Denmark exports fossil fuels, wind power, and food, but is contingent on imported raw materials for the manufacturing industry.
Denmark is the strongest supporter of the trade policy among European Union member countries. The financial crisis in the country started in 2008 and was aggravated by an overinvestment in private, commercial, and farm real estate, as well as the influence of financial leverage to Danish consumers who are likely to overleverage, which lead to little consumption and private investment. Although there were improvements in private consumption, the country is still facing some challenges in increasing exports and investments.
There was a time of tedious growth in the economy of Denmark followed by the financial crisis in 2008 and succeeding the economic recession. In 2015, the GDP went up by 1.2%, which is considerably greater than the yearly growth average of 0.8% from 2010 to 2015. The Danish parliament estimated the GDP growth at 1.1% in 2016, increasing in 2017 by 1.7%.
The estimates in private sectors are passive, ranging from 0.5 percent to 0.8 percent in 2016. In the past years, controlled private consumption has been the major headwind in the Danish economy. It declined in the beginning of 2015. The contributing causes were weaker DKK, lower interest rates, and decreasing unemployment and oil prices. Nevertheless, the main factor that drives economic growth is export, which demonstrated vulnerability in the latter part of 2015.
The country is dependent on trades across international borders (accounts for 50% of GDP), with its partners being the US, UK, Sweden, and Germany. The countries significantly influence Denmark’s national accounts. The unemployment rate in Denmark stood at 4.2% in 2016, and was projected to decrease marginally in the next years when structural reforms for economic growth take effect. In 2016, the Organization for Economic Co-operation and Development HUR stood at 5.8%.
The country is a top aid donor or generous provider of development aid. It contributed 15,546M DKK or $2.41 billion (0.74% of Gross National Income) to development aid in 2015, 21.6% of Danish aid being multilateral and 78.4% bilateral.
Denmark’s macroeconomic and investment climates are favorable. The country is located in Northern Europe, between the North Sea and the Baltic one. Transport, infrastructure, and communications are competent and effective. Denmark has one of the World’s most attractive and innovative business environments, particularly in life sciences, shipping, clean technology, and information technology. The conversion and exchange rate in 2015 for 1 USD was 6,727 DKK.
- Denmark is ranked as the 1st least corrupt nation out of 175 countries in 2014’s Corruption Perceptions Index reported by Transparency International.
- Denmark is ranked 3rd among 189 economies in the ease of doing business in 2015, reported by the World Bank.
- Denmark is ranked 10th among 143 countries and economies in 2015’s Global Innovation Index.
Receptiveness to and Limitations on Foreign Investments
Attitudes towards FDI: Denmark’s economy has an open and flexible job market and is reliant on international trade. Its export-focused, considering exports account for the biggest part of its GDP. Foreign investments are encouraged by Danish liberal policies on trade and investments.
Generally, investment policies in Denmark are progressive and directed at fostering business, particularly in fast growing industries. Based on the 2014 EIU investment climate survey, Denmark was ranked 10th globally and 4th regionally for being the best country for FDI from 2014 to 2018.
The EIU describes Denmark’s investment climate as the most favorable and highly developed in on the globe, evident by its versatile labor market, exceptional infrastructure, and efficient macroeconomic framework. Principle concerns are associated with reduced labor supply, as well as the possibility for absence of stability in the macroeconomic sector, which is possibly caused by the European debt crisis. The survey is comprised of several factors: Denmark is top ranked in several categories, such as macroeconomic stability, institutional and political environment, infrastructure, financing, and policies on foreign investments in private enterprises.
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According to the EIU in February 2016, Denmark’s country risk rating is “A”, while the sovereign risk rating is “AA”. It has a rating of “AAA” in political risk. On the 2015 to 2016 World Wide Competitiveness Report/ World Economic Forum, Denmark was ranked 12th. It’s ranked 5th in the 2015 EIU Democracy Index. Denmark’s credit rating from the 3 major credit rating companies (Fitch Group, Moody, and Standard and Poor) stands at “AAA”.
The Danish parliament has allotted capital in the national fund for increased enforcement and supervision in corporate governance in 2012 in order to guarantee their obedience to the country’s taxation system. Record keeping for corporation taxes of all operating companies in Denmark was publicized in 2012, and records are annually updated.
Capital Regulations Analysis
Denmark was not specifically mentioned in the WTO’s Trade Policy Analysis of the EU in June of 2015. The OECD completed its investment regulations analysis in 1995. UNCTAD’s analysis was completed in March of 2013.
Based on the Global Competitiveness Report of the World Economic Forum from 2015 to 2016, Denmark placed 12th out of 140 nations and 3rd from a list of 189 in “Ease of Doing Business”, propelling it to the top rank among European nations. Since 2014, Denmark’s lead has remained unchanged. It was rated 1st out of 175 in 2015 in Transparency International’s Corruption Perceptions Index.
The World Competitiveness Yearbook, held annually by the World Institute for Management Development, ranked Denmark 8th out of 61 nations it covered in 2015, while the country placed 10th out of 141 countries in the Global Innovation report. The Democracy Index by the Economist Intelligence Unit ranked Denmark 5th out of 167 nations in the same year.
Policies on FDI (Foreign Direct investment)
Denmark is open to international investments and does not discriminate between European and other financiers. As a constituent of the European Union, it is compelled to adhere to EU regulations regarding the free flow of capital, persons, goods, and other specific services. Denmark is impartial in its dealings with international businesses from local to national administrators, and does oblige foreign investors to fulfill any additional permits.
Applications for Business Registration
Denmark provides a complete and uncomplicated business registration process on its online site, the primary digital instrument for applying for licenses and company registrations in the country. Denmark’s Business Authority, or DBA, oversees business registrations and “Business in Denmark”. It offers information on critical policies and online applications to foreign enterprises in Polish, English, Lithuanian, and German.
There is no fee charged for applications for partnerships and sole proprietorship registrations. However, a fee is assessed to register other types of businesses. Digitally completed registrations cost 670 DKK (100 USD) while registration forms ordered by mail or e-mail cost 2150 DKK (320 USD).
Registering a business is different from the process of instituting one, and so Denmark’s Foreign Affairs Bureau launched a free program called “Invest in Denmark” that offers a detailed guide to organizing and starting a business in the country. The program is accessible here to all entrepreneurs regardless of national origin.
Variations in length of processing time are dependent on the type of company being registered. In general, it takes about four to six weeks to register and establish a Limited Liability business in Denmark (Anpartsselskab-Aps) using the standard application process. Setting up an Enkeltmandsvirksomhed or sole proprietorship, on the other hand, is simpler, taking only about seven days to process.
In Denmark, foreign companies that provide short-term services are required to submit their business information to the RUT, which offers online service registration assistance in English. A Danish employee signature NemID or a digital signature is required to complete the process, which is also applicable for those planning to establish a foreign business in the country.
Denmark’s Financial Statements Law no. 1580 section 7(2) of 10th January 2015 defines small businesses as companies with fifty employees or fewer, with a yearly turnover not exceeding 89 million DKK (about 13.2M USD), or a yearly balance sheet not exceeding 44 million DKK (about 6.5M USD). Medium-sized businesses, on the other hand, are described as enterprises comprising of 250 employees or fewer, with either a yearly turnover not exceeding 313 million DKK (approx. 46.5M USD) or a yearly balance sheet not exceeding 156 million DKK (approx. 23.2M USD).
Denmark’s Foreign Affairs Ministry oversees the Trade Council’s “Invest in Denmark” program, an agency providing a comprehensive guide for promising investors. The government of The Faroe Islands has a counterpart agency “Invest in the Faroes”, and aims to promote the Faroese industry. Greenland’s Business and Tourism Council and Greenland Holding provide more information on Greenland’s investment potential.
Restrictions on foreign ownership and freedom of private establishment and control: Denmark’s local and central governments intensely encourage international investment and gives it a national reception, imposing relatively few restrictions on foreign ownership. It accords local and private foreign businesses the freedom to create, control, and discard an enterprise in the country.
Initiating an enterprise in Denmark requires a capital investment of 500, 000 DKK (approx. 74,400 USD). Setting up a private limited liability enterprise costs 80, 000 DKK (about 11,900 USD), while an “Entrepreneurial Business” costs 1 DKK (0.15 USD) to establish. Denmark enforces no limitations on the residency status of their administrators and directors.
Starting with October 2004, an SE company (European public limited enterprise) can be established by a private firm, but its legal system is subject largely to Denmark’s business regulations. It is not necessary to liquidate a company in order to modify its nationality. Denmark may acknowledge in some cases an analogous professional certificate from other Nordic or EU nations based on reciprocity. Accountancy and legal services mandate certain EU residency prerequisites.
The sectors mentioned below are subject to limitations on ownership:
- Exploration of hydrocarbon: Denmark must have 20% participation based on “non-carried interest”
- Defense: Denmark’s L538 26th May 2010 law overseeing foreign control of defense entities mandates the Dept. of Justice must grant approval to 40% foreign ownership of equity or >20% of voting rights, as well as in cases where foreign interests obtain a larger share of the defense company operating in the country. The DOJ’s approval is mandatory, except in cases involving certain security or foreign policy concerns that outweigh the approval.
- Aviation: In Denmark, airline companies must own the majority of the enterprise in order to establish themselves in the country. It must also be largely controlled by a national of an EU member state or by the EU state itself, unless otherwise stated via an international contract ratified by the EU member state.
- Maritime: Unless owned by a Danish enterprise or incorporated in the country, Danish-flagged ships and vessels are subject to non-EU resident or foreign ownership caps. Danish limited liability businesses, partnerships, vessels owned by citizens of Denmark, foreign businesses with vital influence in Denmark, and ships belonging to EEA (European Economic Area) or the EU with an authentic relationship with Denmark are all qualified to register in DIS (Denmark’s International Ships Register).
- Real estate: Certain limitations apply on real estate investments from non-residents and foreigners in Denmark. European Union nationals and enterprises from EU states may acquire real estate of any type with the exception of vacation estates, and must obtain prior approval from authorities.
Non-EU states, persons, and businesses that are residents of and are currently present in the country for a minimum of 5 years total may also acquire real estate property, except vacation estates, unless given prior authorization. Foreign or non-EU persons or enterprises that fail to satisfy these prerequisites must obtain authorization from Denmark’s Department of Justice in order to invest in real estate. Individuals with a residency permit in Denmark are allowed to purchase real estate but not vacation properties, the investment of which are only accorded to Danish citizens.
- Trading securities: Financial enterprises with non-resident status may participate in trading securities in Copenhagen’s Stock Exchange but only via auxiliaries integrated in Denmark.
Privatization plan: Not Applicable.
FDI Screening: Foreign investment has no required screening.
Denmark’s CCA (Consumer and Competition Authority) examines concerns related to competition. As stated in Denmark’s Competition law, the CCA asks for notification of consolidation and acquisitions if the participating companies has a combined turnover that’s more than 50 million DKK (around $7.4M), although a notice is not necessary for any corporation that has a turnover of lower than 10 million DKK or $1.5M.
If consolidating companies have a total turnover that exceeds 900 million DKK or around $134M with at least 2 consolidating corporations, each has a turnover of more than 100 million DKK (around $14.9M), or a local yearly turnover of more than 3.8 billion DKK or about $565M and one of the participating companies generates a global yearly turnover of more than 3.8 billion DKK, the merger and acquisition will require an approval from the CCA. Big scale consolidations require approval from a EU Commission.
Other Parts within Denmark
The status of Greenland within Denmark is defined by the Self Rule Act of 2009 (SRA), that specifies the right of the Greenlandic government to obtain an amount of new duties that include justice administration, labor, business, aviation, border control, immigration, financial supervision and regulation. It already obtained control over fisheries, taxations, internal labor discussions, natural resources, safety regulations, and offshore labor. Denmark remains to control of its foreign matters, defense, and security policies, in conference with the Faroe Islands and Greenland.
Denmark also kept its authority on border control that includes immigration. Greenland does not belong to the EU nor is it part of the Schengen zone, and specific rules are applicable to incoming foreigners of a Schengen nation.
The government of Greenland proposed to add revenues by endorsing a better development in the minerals, fisheries, tourism, and the privatization of government owned enterprises to trim the public sector. Main initiatives include improved access to funding new companies and improving the competitiveness of corporate taxes in Greenland.
Increasing costs for shellfish and fish, Greenland’s predominant exports, has produced great earnings, although the prawn industry continues to drop. The downfall was assumed to be because of climate. Even though the mackerel inventory is increasing, other traditional variety catches were not able to compensate the decline.
Efforts to improve tourism include increasing accommodation capacity, decreasing cruise ships’ passenger tax and focusing on promoting education of foreign languages that will create a greater multilingual labor force. Greenland’s government also asks for a firmer safety regulation in the country’s water navigation. In the sector of Minerals, two mines were projected to begin (anorthosite and ruby respectively) in 2016 and two more companies applied for a permit to mine rare earth minerals in the southern part of Greenland, among which is also Uranium. The country recommends keeping the past government’s rest on prohibition of uranium extraction and expresses EURATOM and IAEA standards must be satisfied, though the uranium mining issue is still argumentative.
The Economic Viewpoint of Greenland
Although Greenland was able to escape the effects of the global financial crisis, with 7.5% GDP growth from 2008 till 2011 and its highly specialized fishing economy, the country is still facing substantial challenges. Exploration of natural resources (i.e. Minerals and oil) and massive construction works in its bigger cities that has dwindled in the past years, Greenland’s static economy, lack of new revenue flows, etc. have become a statistical burden that places a heavy pressure on its public budget.
Hydrocarbon exploration on the west coastline of the country was estimated to have generated about 5 Billion DKK or $745M from 2010 to 2011, and has since dwindled. There was no exploration conducted in 2012 till 2014 and only one oil corporation was handed a license in 2016 for oil search in west Greenland. There’s a significant possibility of offshore rare minerals and hydrocarbon in Greenland. However, these reserves are unverified, and it is still unclear whether a commercially based exploitation and exploration will become feasible.
The economic activity arranged for 3 years up until 2014 and deportation has made the population smaller. Because of the anticipated growth in construction and building investment, there’s a positive projection on economic development in 2015. Thereafter, development in the fishing section will likely conclude whether the activity will improve or decline.
The independent advisory group – Economic Council of Greenland – projected the country’s economy will increase by 2.7% of its GDP in 2015 and will accelerate by about 2.9% in 2017 because of the normalization in construction activities and growing public investments. In 2014 Council’s report, they concluded “After five years of the Self Rule Act implementation, the improvements necessary for creating a self-sufficient economy were not established”. A 2015 article deduces no noteworthy improvements were carried out to avert what was called by the Greenland’s press death’s jaws, i.e. declining revenues and growing public expenditures.
Increasing public expenditures led to demographic shifts that pushed a large population sector to retirement, while the labor sector has fewer active Greenlanders. The government anticipates a 56 million DKK budget for 2016 (around $8.5M) but roughly calculate Greenland’s excess budget for 2016 to 2019 to be at 29 million DKK or $4.4M. However, the Economic Council of Greenland estimated it’s improbable for the budget surplus to happen within this time frame because the necessary reforms were not implemented.
Current reports about the mineral wealth in Greenland affirm oil and mineral projects cannot sustain a feasible economic future for the country. They must be accompanied by education and other improvements to make sure any amplified business activity will significantly invest in people and is not reliant on foreign labor alone.
Greenland exported about 2.65 billion DKK ($395M) in 2015 which is lower by 12.3% from the previous year. 89% of exports were products of fisheries and the rest were machinery and raw materials. The export percentage was 81% to Denmark, then 7.2% to Portugal and 2.9% to Iceland.
Imported goods in 2015 were worth 3.94 billion DKK ($586M) mainly equipment (24.1%), food (21.7%), in-between products (12%), and fuel (9.1%). Imports are coming from Denmark (73%), Sweden (9%), and China (almost 3%). US imports are at 1.1% of the total import percentage.
Foreign Direct Investment from Denmark to Greenland in 2014 made 1.7 billion DKK ($253M). Because of its massive geographic span, Greenland’s telecommunication and physical infrastructures have fewer interconnections and are more developed than most parts of Denmark’s Kingdom. In 2014, the work force was made up of 26.760 workers with a 10.3% unemployment rate average. Greenland’s government is earnestly trying to entice investors to diversify its economy and blend Greenland’s economy to the world as a part of its journey towards liberty from Denmark.
Starting a Business in Greenland
Existing companies and businesses which have plans of establishing themselves in the country must secure a registration number from Greenland’s government. This is applicable to all subsidiaries. The Tax Authority of Greenland assigns a registration number to each business.
Foreign companies may put up a business in the country through various ways by subsidiaries, an authorized affiliate, or through a designated office. Subsidiaries are responsible for their properties.
The required capital investment when starting a business is approximately 500k DKK, about 74,000 USD. Starting a private LLC costs around 125k DKK, about 18,000 DKK. At least one representative should possess a Greenland citizenship. The Greenland Authority provides an exemption to make way for this requisite.
Registered affiliates are not required to have a specific amount as capital investment. Companies registered in the US, Canada, the EU, and in Nordic nations are eligible to be an affiliate. These countries are not considered independent companies but branches of their main office. The company’s main office still has responsibility for all its assets.
Representative offices are generally non-transactional entities which may conduct marketing whenever a branch office is not required in a foreign country. However, these offices are designed to attract businesses and penetrate different industries eventually.
Companies which possess exploration licenses are one of these taxable entities. In terms of provisions, foreign companies are given exploration licenses, but they have to pay taxes. The government does not require them to be registered as a subsidiary.
Just like regular businesses, foreign companies must adhere to submitting a tax report. Business losses may be deducted against revenues in future dated reports.
Foreign companies can put up business in the country consecutively or non-consecutively for 90 days within a year without the need of business registration.
Taxation in Greenland
Greenland is implementing two tax agreements with the Faroe Islands, Denmark, Norway, and Iceland. They are also in the process of securing a Tax Compliance Act for foreign accounts signed with the US, which has been completed as of this writing.
Corporations are taxed at 30%. There is an added 6% surcharge of taxes which give corporations a total tax rate of 31.8%. Certain companies following the Mineral Resources Act are encouraged to apply for exemptions which could lower it to 30%.
Royalties are taxed at 30%. Greenland does not have a VAT system, or other taxes related to sales. In regards to other duties, like ports, cruise liners, etc. taxes are still collected.
According to the tax law in Greenland, there are 4 categories of depreciation. There is a 5% yearly depreciation for buildings. Planes and ships can depreciate up to 10% each year. Depreciation is also applicable to Mineral licenses up to 25% on a yearly basis. Lastly, equipment used for operations can depreciate up to 30% annually. Properties having less than 100 thousand DKK or 15,000 USD may depreciate within a year when acquired.
In 2014, the labour force in Greenland was about 26,000. Also in the same year, the unemployment rate was around 10.3%. It increased from 10% last 2013. According to 2012 statistics, 34.7% of Greenland’s population was reported to have reached beyond the primary education, 42.8% of which has reached vocational courses, and 12.1% of which is associated with teachers and nurses that make up the remaining population.
In 2012, the Large Scale Act was approved by the Greenland government which permits corporations to make use of foreign labour when different phases of development are happening, the cost surpasses 745M USD and labour force requisites exceed the local labour force assistance. The provision gives foreign workers incentives to work for a foreign labour stipulation. On the other hand, this agreement does not compromise existing laws in Greenland or the foreign obligations of Denmark.
Greenland’s Act has also discussed details on foreign employment rules which was expected to make employers comply with the Impact Benefit Agreements. The labour force of Greenland needs to be checked and used first, and each program will depend on the local units and the agreement made for every program initiated.
Foreign employees get similar legal rights as local citizen workers. This includes a compensation, about $14 USD for each hour worked as minimum pay and privilege to strike. However, some employers deduct around $170 USD to pay for their lodging, clothing and food. The deduction is done on a weekly basis.
Investing in Mineral Resources
Greenland has rich mineral deposits, which include rare elements like lead, zinc, molybdenum, gold, uranium, platinum, pink sapphires, ruby, and some minerals considered significant. It is also perceived to have a huge supply of copper and iron, even though Greenland only has explored its resources for a limited time as of this moment.
Although some satellite images show there is a continuous melting of ice for the past years, there is still an ice coverage in the majority of Greenland. Some mining experts expect the accessibility of raw products will be easier if the disappearance of ice continues.
Policies in Greenland are friendly to most mining companies except for radioactive minerals mining. Greenland’s decision to remove zero tolerance for radioactive minerals and uranium paved way to lifting the prohibition where the same minerals were a part of in 2013. The decision was intended to monitor closely mining activities in exploring radioactive minerals in the country.
In regards to the Self-Rule Act from 2009, Greenland obtained legal rights over hydrocarbon and mineral resources. The same Act established strategic a revenue approach: when Greenland’s exploration of mineral resources turns into success, it will assure them 75M DKK or about $11 million USD in yearly revenue. The proceeds will be divided into two equal payments between the Greenland and Danish governments.
The revenue earned by Denmark will be subtracted from the yearly block fund to Greenland, around 3 billion DKK. However, when it reaches the maximum amount, additional profits are subject to an agreement. Greenland’s administration approves any possible revenue proposals but considers any potential risks from activities which may impact society.
In terms of natural resources, Greenland has been known to have few rare mineral deposits. These popular mineral deposits have been acknowledged by the Petroleum and Minerals Bureau and several of them are the result of an expert exploration phase. Greenland was named 2013 and 2014’s “best country for mining businesses”. Other recipients were Australia, Mongolia, and Azerbaijan in 2013. In 2014, the ranking of Greenland slipped from being one of the top 10 to rank 26th according in a survey which was related for the enticement of investors.
Business in Greenland
Programs of Overseas Private Investment Corporation to US investments are not available in Greenland.
Expropriation or surrender of private property can be made as provided by statute and against full compensation, in a nondiscriminatory practice and self-rule of Greenland. There were no expropriation cases in Greenland, and it is not something that is likely to happen in the future.
In the past years, there were no crucial disputes on foreign investments in Greenland. Though settlements of disputes are conducted in Greenlandic Courts, the supreme court of Denmark functions as the appellate court for cases in Greenland. Possible investors in Greenland should manage their expectations and must be aware of their financial obligations and corporate responsibilities.
Generally, the framework and democratic institutions are strong. However, there were laws and regulations passed through the government without substantial public input and a hearing process.
The Faroe Islands
For the past years, the Faroe Islands have been dependent on agriculture, particularly industries related to fisheries. 95% of the products exported are coming from fisheries. The country has small scale businesses and showed less strength in competing with foreign businesses in terms of the international setting. The government has absolute authority to impose taxes and set the standard rate of fees and expenditures for the country’s services.
The Faroe Islands were not entirely affected when the world economy was struggling around 2008 and 2009, unlike other countries in Europe, since their main produce was fish and there was an increasing demand for it. Prices even went up.
The economy improved in 2013 after they showed no movement of their performance for the last several years. Their Economic Department estimated an increase of 5.1%, about 14 billion DKK, an estimate 5.9 percent in 2014, and it was also forecasted to gain an increase in 2015 of 6.4 percent based on the current year’s prices.
The economic gains in 2014 were due to exports, while successes in 2015 to 2016 were caused by local demands. The Economic Council estimated an improvement of 2.8 percent in 2016. Exporting fish, along with herring and mackerel catching had a significant impact to its economic growth.
Local demands were also increasing compared to previous lower spending in households. The unemployment rate has decreased by about 2.3% in 2015. It was at 8% in 2011. Prices of oil products decreased since due to an impressive trade performance.
The country experiences challenges in terms of demography. At present, there have been reports that about 4 people are part of the 16 to 66 working class. Some forecasted, in 2050, there will be a reduction in the number in elderly dependents to 2.1 %. An estimate of 5% of the GDP must be met to ensure debts are regulated as per economic experts since it is at an unacceptably low rate at the time being.
The economy in the country is reliable on the price of seafood products, which is likely to be unpredictable. They had a few disputes when the EU set up standard fishing quotas in the past years. They began in 2012, when the EU decided sanctions need to be imposed in the country.
In 2013, the Faeroe Islands agreed to increase their quotas for mackerel and herring. Member states voted to impose sanctions against the Faroe Islands. This took effect in 2013.
It was then lifted after a year when a political agreement was established in relation to herring catches. An agreement with other North Atlantic coastal states for 5 years was approved, aimed to reduce problems for fisheries and thus improve revenues, since the stipulation was to give way in utilizing resources.
Fisheries are regarded as at least 1 out of 6 of the country’s total gross amount, and roughly 95% of exports, excluding aircrafts and ships. Since Denmark is is not a member state of the EU, the government opened business opportunities with Russia despite having trade issues on some food being imported from the European Union. This helped boost their salmon revenue by selling it to Russia at a higher cost. Even most of their prices dipped in the EU market.
In 2015, Moody (a credit agency) gave the country a high quality rating, the lowest possible credit risk, a stable economy, flexibility on revenue and expenses, and a reputable record in terms of budgeting. Their strong ties with Denmark also added to the better impression.
With regard to the management and conservation of marine resources, the Faroe Islands has retained control in terms of internal affairs related to financial matters, fisheries, transport, and supervision. On the other hand, Denmark has continued to manage their security, defense, and foreign affairs, in cooperation with the Faroe’s administration.
The work force is composed of an estimated 25,000 people, as documented in the latter part of 2015. In most parts, their labor market is similar to some Nordic countries, which have stable welfare developments, a high standard of living, and independent labor groups.
Most people are multilingual or bilingual. English and Danish are widely used as their preferred language. They also take pride in terms of infrastructures in different regions like telecommunications and other establishments. Also, they have a stable legal, political, and social structure.
For people living in the country, about 50.000, they have a high standard of living according to world standards which eclipsed Denmark’s economy in 2014. In 2000, they started the securities and exchange process followed by the trading industry in 2005.
The Faroe Islands reportedly had an approximate 7 billion DKK worth of products, exported in 2015. 97% were from fisheries and the remaining products were aircrafts and ships.
Recently, the transportation, construction, banking, and financial service areas have started emerging. Gas and oil industries have shown improvements too. According to reports, most exports were made to the United States (10.4%), Russia (16.7%), the United Kingdom (10.4%), Germany (10.1%), and Denmark (6.7%).
It had a total amount of 6 billion DKK in 2015. In terms of imports, most came from European countries and approximately 1% came from the US. Denmark supplied about 21.21% of it, Germany 9.17%, Norway 19.73%, Poland 4.11%, Sweden 7.75%, and China 4.85%. Most products imported are for household use (22%), like food, beverages and tobacco (10.1%), machinery (9.9%), gas (13.2%), and industry-related (23%).
Recent statistics also shows the FDI amounted to 1.6B DKK in 2012, approximately 50% of it from Denmark. The government made efforts to attract more foreign investors in the same period. At the moment, they are working hard to get into an agreement called FATCA along with the US.
Transfer Regulations and Conversions
FOREX: Denmark does not limit the transfer and conversion of incoming and outgoing investment capital. Existing regulations are designed to maintain the ease of resources and capital flow within services and products markets. Obtaining credit and accessing various credit instruments at standard market terms in the domestic economy is accessible to foreign investors.
Despite its decision to decline the use of the Euro as its currency, Denmark may still participate in the European Union’s economic assembly, where it was able to satisfy its membership criteria. Within the ERM II’s system, Denmark’s Krone and the Euro are tied closely to each other, as the country operates a fixed rate of exchange policy with the Krone (pl. Kroner, Crown in English), which fluctuates within +/- 2.25% DKK’s central rate (746.038 per one hundred Euros). The government of Denmark approves being included in the Union of European Banking, with the condition of being able to opt out of the Euro, and guarantees are in place to ensure the country’s mortgage financial framework will retain its current structure.
Denmark’s political skepticism with respect to a Euro partnership may only be overturned by popular vote. Years 1992 and 2000 saw Danish voters voting down the policy. In principle, the Danish government approves the adoption of the Euro. However, a national election is not a calculable probability.
The bulk of popular opinion made via systematic voting demonstrates a preference for maintaining the Krone. In 2015, the ratio between Denmark’s national debt and Gross Domestic Product (GDP) was at 40.2%, and the country experienced a 2.1% deficit in the budget the same year. Denmark approximated a 2.8 percent budget deficit for 2016 and 2017 respectively, and within the bounds of the Stability and Growth Pact’s framework.
Reparations for Property Seizures
Private property, from a legal perspective, may be sequestered only through an impartial approach and solely for public functions, in conformity with the standard rules of international policies. Denmark has not made any relevant property takeovers in recent years, and no realistic possibility of expropriations is forthcoming.
The judiciary, exclusive courts, determination of international courts, and autonomy of the legal system: Denmark is well-known for its independent, incredibly unprejudiced judiciary, and the country has seen no significant investment disputes for the last few years. With its legal foundations going back centuries, it acknowledges and enforces secured real estate interests and is consistent in its implementation of insolvency and commercial laws.
According to the 2015 to 2016 assessment of Global Competitiveness by the World Economic Forum, Denmark ranked 12th globally among economically competitive nations and 6th among 28 European Union member states, with its institutions being regarded as the most efficient and transparent worldwide. Denmark was also rated high on categories in relation to business ethics (ranked 3rd), protection of intellectual rights and properties (21st), judiciary competency in resolving disputes (19th), bribery and inconsistent payments (6th), autonomy of the courts (5th), and trustworthiness of law enforcement (15th).
Denmark placed ninth in “Resolving Insolvency” included in the 2016 Doing Business review by the World Bank. The Danish Kroner is easily convertible and is used to make monetary determinations under the insolvency law. The following illustrates how the law systematically acknowledges claims of creditors against an insolvency:
1) Debt and expenses increase during the bankruptcy process;
2) Court taxes and other expenses accrue in relation to attempts made at arriving towards a resolution other than insolvency;
3) Vacation pay and salary claims;
4) Exercise taxes payable to the Danish government;
5) All other assertions.
Conflicts on investments: Denmark has not experienced any recent significant investment conflicts.
International Settlement of Disputes
New York and ICSID Convention: Denmark became a constituent of the ICSID in 1968, which later extended to Greenland and The Faroe Islands. In 1958, Denmark was a party at the Convention on the Enforcement and Recognition of Foreign Arbitral Awards, which permits domestic courts to execute international determination awards that satisfy specific principles.
Investment disputes and their international mediation became irrevocable by subsequent laws in Denmark, which participated in UNTC in 1961 and became party to the contract in 1962 pertaining to the execution of said Convention. In 1985, Denmark ratified the International Commercial Arbitration’s UNCITRAL Model policy.
In 1976, Denmark which conforms to the Convention in New York, announced the convention is extended to Greenland and The Faroe Islands.
Investment Stimulus and Productivity Qualifications
TRIMS/WTO: There has been no recorded disparity in relation to Denmark’s observation of the WTO’s Agreement on TRIMs.
Investment stimulus: Both local and foreign investors qualify for productivity incentives, and specific rewards and preferential funding are available to those appointed in provincial development areas. These incentives may also be extended to investments made in Greenland. International auxiliary companies operating in Denmark may take part in state-subsidized or funded research programs receiving government treatment.
Research & development: Inapplicable.
Prerequisites on productivity are applicable only in relation to hydrocarbon exploration investments, where the terms in adjustments typically demand a fixed activity program such as seismic analysis, and in certain cases, drilling explorations, in conformity to applicable EU regulations.
Structured primarily to preserve the environment, productivity is incentivized by promoting the reduction of water and energy consumption. Various energy and ecological preconditions are consistently enforced on both local and foreign households and businesses.
In 1993, Denmark became the first EU member state to adopt a CO2 (carbon dioxide) tax on industry and business, which involves specific refund strategies to help ensure the cost of businesses are reduced, thereby protecting competition.
EU policies and Denmark’s legislation oversee productivity qualifications, which are consistently extended to both foreign and local investors. Possible infringement of policies in this area may result in fines or incarceration.
Data storage: Denmark does not implement “forced localization” rules nor does it oblige foreign Information Technology providers to hand over source codes and/or grant surveillance capability. The Department of Justice, the Bureau for Culture, and Denmark’s bureau for Data Protection all participate in data storage.
Protecting Property Rights
Fixed property: Denmark makes sure property rights are covered by laws and are in effect. As for the real estate industry, it is processed through Denmark’s mortgage credit system, comparable to public bonds. To fulfill the bond using the European Union’s Capital Requirements, the government revised the home loan bank regulation in July 2007.
With these changes in mortgage regulation, financial institutions get opportunities like the mortgage banks to grant debt securities. There were authorised issuers which have been given a license from Denmark’s Financial Authority capable of releasing debt securities.
Imposing interests on properties is authorized by the government. In real estate, home loan records are kept in public division offices for mortgages. Aside from business ships and vehicles which are recorded publicly, other interests associated with properties are not recorded in general. Public record keeping offices have a safe and dependable system of data storage. Denmark has been known as a top country with a smooth process in terms or registering properties.
IP rights: Denmark takes Intellectual Property Rights seriously. As a country, it recognizes international standards and showes compliance in enforcing security on property rights. It has approved the World Trade Organization’s treaties on IP rights, and other several treaties on the internet (The WIPO), treaties on copyrights (WCT) and (WPPT) or the Phonograms and Performances Treaty, which were affirmed and in effect.
References for property owners: A complete list of lawyers in Denmark can be found on their website as reference. Information indicated online is validated and updated by the US Embassy to serve their citizens. Incomplete information on the website does not have any impact on additional services they provide.
Transparency in the Regulatory System
Laws in Denmark are relatively friendly to foreign businesses that benefit Foreign Direct Investments in the country. As a nation, it has a high regard for environment, health, safety, and labour practices. Provisions are generally acceptable and do not in any way prevent foreign investors from coming in.
In terms of corporate laws, Denmark adheres to the EU’s legislative standards. Its accounting, legal, and regulatory system is transparent enough and recognizes international laws. Both local and foreign services have established transparency and made the information publicly available. The Danish government drafted a plan in 2013 indicating rates on corporate taxes will be reduced slowly from 25% to 22% by 2016. In 2015, the corporate tax rate was close to the target at 23.5%.
The Tax Authority of Denmark made sure all tax information is available to the public. It is published every year. Releasing the details of these taxes is meant to promote transparency in the government and awareness of how much the public office receives and how many taxes corporations pay.
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The administration enforces clear and fair laws to encourage competition among businesses in the country. The regulatory system is transparent enough to be consistent with the international standards they follow and implement. Danish and foreign communities are treated equally.
The Danish Consumer and Competition Authority finds ways to ensure investors are able to compete freely and fairly in their respective industries. It is mandated to enforce the Competition Act to promote security to businesses and ultimately to consumers.
Registered corporations must submit a yearly report to the Denmark government as a matter of compliance to the Financial Statement Act. Related principles that must be included need to meet International Accounting Standards, International Finance Reporting Standards and Denmark’s General Accounting Principles. Documents need to be ready for submission at least once a year.
This Act is applicable to all companies and businesses. There is an exception to the rule, as personal businesses or general partnerships are not mandated to submit these statements and will only be part of the Act if they volunteer to be included in that same ruling.
PLLC, corporate funds, and public limited corporations are required to submit financial reports to comply depending on their sizes:
- Small Businesses: Assets are about 35 million DKK and the revenue is 71 million DKK.
- Medium sized Businesses: Assets are 142 million DKK and the revenue is 285 million DKK.
- Large Businesses.
All government’s proposed policies are available to the public and can be viewed online. After consultation proceedings, proposed policies are also saved on Denmark Parliament’s website. The final approved policies can be viewed online at http://www.ft.dk and http://www.lovtidende.dk. Even though the government did not require this information to be published, in 2005, agencies and ministries agreed to make it mandatory for the sake of transparency. Denmark earned a rating of 6, the highest possible score at that time. This was in relation to their excellent global governance.
Portfolio Investment and Capital Market Efficiency
The movement of foreign exchange has been liberalized in Denmark, including portfolio and direct investment drives. Credits are distributed on market conditions and are freely accessible. Denmark follows its obligations according to IMF Article VII. The FSA manages the country’s banking system. Distinguished voting privileges (A & B shares) are somehow used, and some Danish corporations are run by reputable institutions, which may lessen any possible hostile takeovers.
Denmark’s stock market performs efficiently. The CSE joined the Baltic and Nordic marketplace in 2005, the OMX Exchanges based in Stockholm. Aside from Copenhagen and Stockholm, OMX is also part of the stock market in Tallinn, Helsinki, Vilnius and Riga. To provide more access to capitalize smaller companies, OMX started an alternate Nordic marketplace in Denmark called “First North” last 2005. The stock exchanges were obtained by the OMX-NASDAQ Group in February 2008.
Banking and Financial System, Hostile Acquisitions
Denmark’s major banks, graded by foreign agencies and credit worthiness, are highly rated by international guidelines. They’ve passed all national and European stress tests by a significant margin.
Just like banks in other nations, Danish banks also endured the 2008 – 2009 turmoil. In October of 2008, the Parliament of Denmark passed a law that appealed to the government and all independent banks for a joint support on a “security net” plan that gives unlimited assurance for certain kinds of bank deposits and creditors until September 2010.
Danish and international depositors are both covered by this law. There were 133 banks enlisted in the “Bank Package”. There were still reports from local business that complain about the continuous tight lending process and dilemma in acquiring bank financing, despite the existing legislation. The Danish government gained profit out of the agreement when the program ended in September of 2010.
The second phase of the program was approved on January 2009. It was called “Bank Package II” and provided government loaning to financial organizations that need capital which will support their solvency qualifications. The Danish bank was the only one eligible to be included in this second initiative, and a sum of 43 claimants were awarded 46 billion DKK (about $6.8B). The Financial Stability Company (FCS), a government managed institution, was created to acquire failed banks. 10 banks were divided or taken over and sold by the FCS before 2010 ended.
The third package started on July 2010 and was set without an expiration date to orderly cease failed banks done with the FCS from the time Bank Package 1 ended in September 2010. The package ensures all deposits of up to 750,000 DKK (around $111,600).
This third package earned scrutiny from both the local and the international community marking Denmark among EU’s toughest authority when it comes to dealing with distressed banks. The package includes provisions in case of bank failure. Senior debt holders are required to shoulder the losses.
The fourth package was approved on August 2011 trying to identify significant financial institutions systematically, ensuring bank liquidations that take control of distressed banks, supporting banks on acquisitions by permitting them to pay off obligations with the country and also to change the financial system from sector-financing guarantee funds with a premium based system. As stated by the Danish administration, the 4th package offers a system for distressed banks that don’t have a debt holder deficit, but also do not override the 3rd Bank Package. In case of failure, a senior debt holder deficit is still possible.
In October 2003, Denmark’s Growth and Business Ministry established a political arrangement with a wide scope of political support, that according to the latest financial statements, named seven financial establishments as “systematically significant”: Danske Bank, Nykredit, Jyske Bank, Nordea Bank Danmark, Sydbank, BRF kredit, and the DLR Kredit.
Banks were classified according to 3 significant criteria:
- A balance sheet with a GDP ratio higher than 10%,
- Above 5% market for lending, or
- Above 5% market share for deposits.
If one institution exceeds any of these 3 requirements, it is considered systematically significant and should comply with stricter requirements for capitalization, resolution, and liquidity.
Experts anticipate an amendment on the distressed financial institution resolute system in line with the decision to be part of the European Banking Union. A local payment system called “Nets” was purchased on March 2014 by a consortium which includes Bain Capital LLC, Advent International Corporation and the Danish pension funds ATP for 17 Billion DKK or $2.5 Billion. The sum of Denmark’s 3 biggest banks – Nordea Bank Denmark, Jyske Bank and Danske Bank comprise at least 75% of the assets of Denmark’s banking division.
Competitiveness of State-Owned Companies
Denmark is associated with a GPA under the WTO umbrella. Government owned establishments (SOEs) have a primary position in energy utility, rail, and media broadcast in Denmark. Major public procurement should go through a public bidding in line with the EU legislation. Rivalry from SOEs represents no hindrance to international investments in the country. According to the report of the Global Economic Forum, Denmark ranked 5th in the 2015-2106 Global Competitive review with its judicial independence. It also mentioned the country has one of the world’s most transparent and well-functioning institutions.
OECD guidelines for SOEs’ corporate governance: As a member of the OECD, Denmark advocates and supports its Corporate Governance principles and supplementary SOE Guidelines.
Being part of the OECD, with the help of Danish Business Authorities, Denmark supports MNE Rules as well as the UNs’ Guiding Principles for Human Rights and Business.
Government wealth funds: Not applicable.
Business Conduct Responsibility
Denmark’s Business Authorities published their National Action Plan to improve the country’s RBC and Social Corporate Responsibility. The latest plan covered 2012–2015 and included 42 initiatives that focus on business minded CSR. According to the survey conducted by the Harvard and London School of Business, it is considered that Denmark, Singapore, and Finland have the most reliable corporate management. All notable Danish corporations have a public Corporate Social Responsibility action plan. As a member of the OECD, the country promotes MNE Rules and the United Nation Guiding Principles for Human Rights and Business.
Violence in politics: Denmark is known to have a stable political atmosphere. Based on data, there are only very few incidents which can be associated with politics as far as government projects are concerned. Denmark has an excellent rating of “AAA” according to risks in politics.
Denmark has been declared the least corrupt country by Transparency International in 2015. Finland ranks next to it in the same category. There is a representative from Transparency International monitoring these observations in the country.
Based on its Penal Code, the Department of Justice has been tasked to continue their fight against corruption. It is considered a crime that penalties would mean imprisonment up to 4 years when a private individual is convicted. Public officials face imprisonment if found guilty for a maximum of 6 years. Companies in Denmark are not able to claim a deduction of taxes if they are involved in bribery when dealing with foreign officials.
United Nations’ anti-corruption and the OECD Seminar on fighting bribery: The country is signed to UN’s Anti-Corruption and OECD Campaign on Fighting Bribery. Within the same 2014 Working Group’s Level 3 data regarding Denmark, it was suggested to participate more in the investigation and sanction of foreign entities that were proven guilty.
Bilateral Business Agreements
Denmark and the US have maintained Commerce, Navigation, and Friendship Agreements since 1961. They both enjoyed a Most Favored Countries status, National Treatment assurance, equal competitive opportunities with government entities and transparency of their processes. Denmark has gained secured agreements in terms of investments with around 45 countries (including Hong Kong): Zimbabwe, Vietnam, Venezuela, Ukraine, Uganda, Turkey, Tunisia, Tanzania, South Africa, Sri Lanka, South Korea, Slovenia, Slovakia, Russia, Romania, Poland, the Philippines, Peru, Pakistan, North Korea, Nicaragua, Mozambique, Mongolia, Mexico, Malaysia, Lithuania, Latvia, Kuwait, Indonesia, India, Hungary, Ghana, Estonia, Ethiopia, Egypt, Croatia, China, Chile, Czech Republic, Bulgaria, Bolivia, Belarus, Argentina, Albania, and Algeria. Denmark also signed treaties on investment security with Serbia, Morocco, Montenegro, Laos, Cuba, Brazil, Bosnia Herzegovina, and Bangladesh. However, these treaties are still pending.
Bilateral Tax Agreements
Both Denmark and the US attended the Bilateral Forum for Prevention of Double Taxation and Avoidance of Fiscal Evasion with Income Taxes which started in 2000. In the second quarter of 2006, there was a memo to revise the agreement. The significant part of the protocol was to remove withholding taxes on cross-border payments of dividends. In 2012, Denmark and the US officially signed IGA (or the Intergovernmental Agreement) which aimed to enforce FATCA.
Insurance investment programs and OPIC: OPIC projects do not apply to US investments in the country but can be used in US owned affiliates to back up their businesses in certain target countries.
Labor practices: The work force in Demark is effective, competitive, and generally well balanced. Communication skills are exceptional. They consider English as their secondary language. The Danish work force has shown flexibility in the labor community. Denmark provides equal opportunities to investors and makes them adapt easily to the dynamic industry.
According to statistics, the Danish work force in 2015 reached about 2.80 million employees. In terms of unemployment, it was 5.8% during the first quarter of 2016. Their rate was lower compared to the EU which had 8.8% and the OECD with 6.4% respectively. It is anticipated to decrease in the next few years since economic reforms are stable and reviewed periodically.
Denmark’s government is huge and 30% of the population are regular employees. Female workers in the labor community are known to be in the highest numbers based on statistics.
About 75% of mid aged women are in the labor community. Regarding the male work force, both the employment and participation rates were at 75.3% and 81.6%, respectively.
Denmark’s labor community is well structured, 75% of it belonging to a labor union. Only a few strikes and protests were reported on labor concerns. They have an open door policy which makes it easy for both management and unions to agree rather than argue over certain issues. There is transparency in terms of organizations and legislative processes. Collective bargaining is preferred by management instead of going through legislation when compensation and labor terms are discussed.
The average work hours in a week are 37.5 for contract workers. Employees have a total of 5 weeks of vacation leave with pay per year by law. However, because of certain agreements, the majority of workers get a total of 6 weeks of vacation per year with pay.
Denmark implemented unemployment benefits and sick leave with pay not covered by employers. For instance, maternity leave is about fifty two weeks, and a two weeks leave with payment is given to fathers. Employers cover the salary for the first fourteen weeks and the government takes care of the remaining leave credits.
Denmark’s compensation is high based on international standards. Some investors think when compensation is high, it might compromise the competitiveness of workers. On the contrary, employers contribute a small amount to health care and social security benefits of workers.
As for Denmark’s employers, they have the lowest expenses in terms of benefits compared to most industrialized countries. Compensations were increased in the first quarter of 2015 to the first quarter of 2016 by approximately 2 percent when the economy was doing well with a 0.3 inflation rate, which led to an increase in the wages of workers. There have been forecasts that another increase of 2% is about to happen in the next few years as a result of a stable economy.
Generally, work visas can easily be acquired for foreign management positions. However, visas for non-management positions for foreign workers who are outside of the EU community and the Nordic countries are approved only when there is a strong demand for professionals, provided all other criteria are met.
The Positive List Scheme is a list of professions or occupations in short of skilled and qualified professionals in Denmark. The Positive list is being updated two times a year. Overseas job applicants offered occupation by a Danish employer are automatically entitled to work permits and residence.
However, a professional bachelor’s degree is required in most occupations on the Positive List. In other cases, an authorization certificate from Denmark is required, particularly for foreign trained physicians. Job titles on the 2016 Positive List Scheme are accountants, lawyers, marine biologists, Information Technology specialists, nurses, doctors, scientists, engineers, and other Bachelor’s or Master’s degree position.
The pay limit scheme is applicable to job titles or positions with a gross annual salary of no lower than 375,000 DKK ($55,800), notwithstanding the field and job description. With the Pay Limit Scheme, there is stress-free access to Denmark’s labor market for anyone who gets employed in a high earning job.
Denmark’s Green Card Scheme was designed for overseas job applicants seeking employment in the country, providing them a residence permit valid for up to 2 years. It allows an individual to work and live in Demark using a points based system and criteria such as flexibility, educational levels, and language skills. There is a 3 year permissible extension of the residence permit. However, a minimum earning of 317,725 DKK is required. This scheme is being evaluated.
There are some schemes designed to help accredited companies in encouraging qualified and highly skilled workers to work in Denmark. However, these schemes differ in requirements and durations.
In general, Denmark has the highest tax rate on personal income among all other countries. The Researcher’s Tax allows researchers and primary employees to choose. However, they are contingent to pay taxes at a rate of 26% plus contributions to the labor market by 31.92% in total for a period of 5 years.
Primary employees are entitled to a 26% tax scheme only if certain criteria are met. For instance, the average monthly salary must be at least 62,300 DKK or $9,270 within the calendar year after the ATP contribution deduction and before the labor market contribution’s deduction, effective since 1st of January 2016. There are limitations or curbs based on the employee’s history in Denmark’s labor market.
This incentive is even more attractive compared to the progressive taxation system of Denmark. Other information is available at the embassies of Denmark or by visiting www.nyidanmark.dk.
In 2014, the Danish parliament revised the system, trying to expand and grow the number of eligible workers under the Pay Limit Scheme and Positive List, as well as new strategies to increase retention and attraction of highly skilled foreign workers.
Denmark is a member of the International Labor Office (ILO) since 1919 and has signed 8 International Labor Office Core Conventions.
Free Economic Zones, Trade Facilitation, and Free Ports
The Port of Copenhagen operates the only Danish free port. In 2001, the activities and commercial operations of the Port of Malmo in Sweden and the Port of Copenhagen in Denmark have merged. The merged company was named CMP.
CMP (Copenhagen Malmo Port) operates ports located in Nordic countries. It is one of Northern Europe’s largest cruise destinations. It also receives ships and handles freight, such as vehicle fuel and cars in Baltic countries.
Freeport facilities are commonly used for the non-tax storing of goods, transit trade, and goods for export. Duties and taxes can be paid after the cargo has left the Freeport. Such ports are free to use for cargo processing as well as for the arrangement and polishing of imported cars for sale.
Establishing production facilities or manufacturing operations within the Free Port Zone requires a permit from customs authorities to validate your reasons to operate in the area. The Freeport of Copenhagen receives storage facilities and warehouse established by foreign companies.
FDI and Foreign Portfolio Investors Investment
In 2014, the value of the Danish inward foreign direct investment stock was equivalent to 28.1% of GDP, and 51.3% on outward foreign direct investments. Sweden was Denmark’s major foreign investor in 2014, followed by Norway, the Netherlands, the UK, and Luxembourg. The United States’ investment is the 8th largest source of Denmark’s foreign direct investment, which accounts for 5.2% of Denmark’s 2014 total foreign direct investment stock.
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The United States’ major direct investments in Denmark are telecommunications, IT, energy utility, facility services, financial services, oil exploration, and biotechnology. In the past few years, some private equity firms based in the United States have invested in Denmark, such as TDC, Legoland Parks, ISS, and DONG. More than 400 companies from the United States have branches and regional headquarters in Denmark.
Danish foreign direct investment destinations are mainly 16.4% in Sweden, 13.2% in the United Kingdom, 9.9% in Germany, 9.7% in the U.S, and 6.2% in Singapore. About 69.6% of 2014’s Denmark stock was held by European countries.
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