Foreign investment in Denmark

These are the highlights if you want to know the essential of foreign investment in Denmark.  This entry was drafted by Klar advokater for”E-IURE COMPENDIUM” 2018. Link to e-IURE Network.

This collaboration is a brief step-by-step guidance. In no case it can be considered as legal advice. If you want -or need – legal advice, ask for a lawyer or a law firm. In that case  Klar advokater is an excellent option in Denmark.

Foreign Investment

Foreign investment is encouraged in Denmark and is attractive overall due to several factors, including relatively low corporate taxes, a competent workforce, a flexible labour market, a reliable currency, and no corruption.

Denmark is a world leader in clean technology, information and communication technologies (ICT) and life sciences. Denmark is among the world’s top three countries in English language proficiency. Four out of five Danes speak English and many also speak German. However, the Latin languages are less commonly spoken by Danes.

The Danish currency – the “krone”

Denmark is a member of the European Exchange Rate Mechanism II. This means that the Danish currency, the krone, is locked to the Euro at a central rate of DKK 7,46038 to the Euro (1 DKK = 0,13404 Euro), with a fluctuation brand of +/- 2.25 %. The current exchange rate (as of August 2017) is 1 Euro = 7.44 DKK.

Registration of investment

As a rule, there are no requirements for foreign investors to register or obtain the authorities’ permission for making investments, and there are no restrictions on the foreign ownership of Danish shares or bonds.

Danish companies must submit a registration to the Danish Business Authority and to the tax authorities before the start of operations. Furthermore, the management must be registered with the Danish Business Authority (please see the chapter about Corporate law for further information).

With regard to investments in Danish real estate, there are some restrictions on what types of properties foreigners are allowed to buy (please see the chapter regarding Real Estate for further information).

Setting up a business

It is relatively easy to set up a business in Denmark. With professional assistance, a standard company only takes a few hours to register with the Danish Business Authority and the tax authorities before it is up and running. Setting up a Danish bank account, however, may take a little longer, depending on the bank and its anti-money-loundering procedures.

Foreign employees

Nationals of other countries within the EU or European Economic Area (EEA) are allowed to work and live in Denmark without obtaining a work or other permits. (A previous restriction on the free movement of workers from countries that joined the EU within the last 7 years ended on 31 December 2013, meaning nationals from all EU member states are now allowed to work and live in Denmark.) Employers are required to pay ATP Livslang Pension (Lifelong Pension) contributions on behalf of wage earners who are EEA nationals.  The same rules apply to employees who are non-EEA nationals with two exceptions: 1) if the wage earner is employed in Denmark for a maximum of six months, or 2) if the wage earner is employed in Denmark for educational purposes and their stay does not exceed 18 months. Special rules apply to employees on Danish vessels. If Denmark and another country have entered a social security agreement, those rules will apply to employees from the respective country.

Nationals of countries outside the EU or EEA will need a visa and/or a work permit to enter and work in Denmark. The type of visa or work permit required depend on, among other criteria, the applicant’s country of residence, educational background and type of work to be performed in Denmark.