The Øresund Region
Setting up a company
Danish corporate legislation allows for swift establishment in Denmark, whether you wish to establish: • a limited liability company (an A/S, or an ApS or a European company (SE company)) • a branch of a foreign company More information... www.investindk.com
• Danish corporate tax rate is currently 25% compared to 28% in Sweden • The effective rate is even lower, as a deduction of business expenses and depreciation is allowed • Almost no social security contributions required from employers • Outbound and inbound dividends can in general be distributed and received without tax • No capital duty, no share transfer tax, and no wealth tax applies • More information: Corporate Taxation fact sheet at www.investindk.com More information...
Facts on employment in Denmark
Compared to Sweden, the Danish labour market is more flexible • Sweden imposes a social security contribution of 33% of the employees’ gross salary to be paid by the employer. In Denmark, virtually no social security contribution is levied on the employer • In Sweden, the employer has a duty to negotiate with unions before initiating terminations. Such duty does not apply in Denmark, except in cases of mass-dismissals • In Sweden, the principle of last in – first out applies when the employers chooses whom to terminate. In Denmark, the employer may generally choose freely whom to dismiss • In Sweden, the employer has a duty to offer former employees re-employment within certain time limits. Such an obligation does not apply in Denmark • Length of the maternity leave and the possibilities of entering into time-limited employment contracts also favour Denmark over Sweden
More information... www.investindk.com
Whether your company considers to relocate, consolidate, set up new production facilities, is on the lookout for new innovation partners or other strategic business solutions in Europe, Invest in Denmark is a good place to begin. We provide customised information and services free of charge and in full confidentiality.
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Facts... August 2008
The Øresund region The Øresund region has the potential to be in the top three of Europe’s new growth areas with EUR million support from the EU – and offers the foreign investor multiple opportunities. Many international companies have already placed Nordic headquarters in the region surrounding Copenhagen with Life Sciences, ICT, and Fashion offering particular potential. Below, you will find useful information regarding setting up business activities in the region.
The Øresund Region has become a reality with the opening of the fixed link between Denmark and Sweden in the summer of 2000. It consists of the Copenhagen area in Denmark, including the eastern part of Zealand and the southern part of Sweden, including Skåne and the city of Malmø. The population of the Øresund Region amounts to approximately 3.6 million people, of which around 2.5 million reside in Denmark and 1.1 million reside in Sweden. This corresponds to 25% of the combined populations of Denmark and Sweden. In order to stimulate the growth and development of the region, the Danish and Swedish governments are working on a harmonization of taxation, social security and labour market issues. Both governments support the integration efforts and have so far agreed on the common principles. With infrastructure investments totalling USD 10-15 billion, the Øresund Region is well placed to achieve a position among the top three European growth areas over the next decade. Investments are being made in road, rail and air infrastructure, and public infrastructure improvements include extensions of the Copenhagen metro and establishing a metro system also in Malmø. International companies considering establishing in the Øresund Region need to decide whether such establishment shall be in Denmark or Sweden. For many reasons, Denmark is often preferred.
More information... www.bgoresund.com www.oresunddirekt.com www.oresundnetwork.com www.oresundsinfo.org
• The most efficient airport in Europe which functions as a hub for all Scandinavia with the shortest lead times for goods (ATRS 2004) • Low corporate taxation: 25% in Denmark compared to 28% in Sweden • Almost no social security contribution paid by employer in Denmark compared to 32.42% in Sweden • Low tax for expatriates: 25%, 30% or 33% • Highest labour market flexibility compared with seven European countries *) • Some of the world’s lowest data and telecommunication rates • Competitive salaries for management/scientists
Made in cooperation with
*) According to benchmark study made by Rønne & Lundgren/Invest in Denmark in 2003 and 2006, Denmark offers the highest flexibility on essential employment issues for salaried employees. Denmark was benchmarked against Sweden, Norway, France, Ireland, Germany, the Netherlands, and the United Kingdom
The Øresund Region
Easy access to Denmark for employees living in Sweden has enlarged the potential workforce pool for businesses established in Copenhagen by approx. 50%. Approximately 20,000 commuters cross the Øresund bridge on a daily basis - either by train or by car. Of these 20,000 commuters the main part lives in Sweden and works in Denmark. When living in Sweden – whether being Swedish or Danish – and working in Denmark, it is important to note the special rules applying for commuters. With the right set up, both the employee and the employer can benefit from this. The attention is drawn to the legislation regarding registration, taxation, social security and labour laws. Professional advice is recommended. A Swedish resided employee working in Denmark must be registered in Denmark for tax purposes etc. If the employee is only working in Denmark, he will be taxable to Denmark of his salary received from his Danish employer. He may choose to be taxed as being subject to limited tax liability to Denmark or he may choose to be taxed as being a fully tax liable person living in Denmark. The latter set-up allows the employee to deduct not only work related expenses but also e.g. Swedish interest expenses can be deducted when calculating the Danish taxation. The opposite is not possible since the Swedish tax system does not allow a Danish resided employee to deduct his Danish interests when calculating the Swedish tax. If the Swedish resided employee chooses to be taxed as limited tax liable to Denmark, the deduction possibilities are restricted. However, a married commuter without interest expenses may prefer this set up, since an extra deduction, equal to the personal allowance of DKK 41,000 (2008) is allowed. Which set up is the best demands a specific evaluation of the situation of the individual. All commuters living and working in either Denmark or Sweden are granted a travel cost deduction for each kilometer traveled and furthermore a special “bridge deduction” is granted every time the commuter crosses the bridge. The employer cost in Denmark compared to the employer cost in Sweden is extremely low. Adding to this, the benefit of the Danish 25% regime for expatriates and 30 % tax regime for hiring-out of labour often makes Denmark the best place to establish within the Øresund region Øresund Region – an ideal location for a Nordic HQ
96 of the world’s largest companies have set up regional headquarters in the Nordics, of which 47 are placed in the Øresund Region, where the number of regional headquarters have doubled in the last seven years. Colgate-Palmolive, Nestlé, Coca-Cola, Gillette, Kelloggs and Masterfoods have all chosen the Copenhagen region for their Nordic headquarters. An increasing number of companies are saving costs covering the Nordic and Baltic region from Denmark. 3,400 international companies, including Biogen Idec, IBM, L’Oreal, Dell, Shell, Sony, and Max Mara have all placed either research and development, regional headquarters, shared services centres or distribution activities in the Copenhagen region. Getting established
With 1.8 million inhabitants, Copenhagen is the largest metropolitan area in Scandinavia and provides an excellent base for all kinds of businesses. In the southeast part of Copenhagen, an area named the Ørestad (“Øre” referring to the Øresund Region and “stad” meaning “city”) is being developed. It has the status of a central business centre for the Øresund Region, providing facilities in terms of space and buildings, well-developed infrastructure, and easy access to Copenhagen (8 minutes from the city centre) and Copenhagen Airport (4 minutes). Facts about Copenhagen
• Sweden can be reached from the Danish capital Copenhagen in 20 minutes by car or train
More information... www.oresundsinstituttet.org www.oerestad.dk www.oeresundsbron.dk
The Øresund Region
• Copenhagen Airport handles approximately 380,000 tons of airfreight each year and has the shortest goods transit times of all European airports • The headquarters of Maersk, which operates one of the largest commercial fleets in the world, is located in Copenhagen • Internationally minded work force with excellent language skills: English 80%, German 53%, Swedish 25%, French 10% • Copenhagen ranks in the top two across the entire EU in recent research on quality of life in 215 world cities by the international consultancy company William Mercer • Office costs: With costs ranging appr. 20% below the average, Copenhagen has been rated among the cheapest capitals in Western Europe (DTZ Research) Business sectors
Life Sciences, ICT and Fashion are strongholds in the Øresund Region. Intensive collaboration between companies, research institutions and universities has created strong industry and research environments. Facts about Business Sectors Life Sciences – Medicon Valley
• 32 hospitals of which 11 are university hospitals and a significant number of biotechnological companies are located in the part of the Øresund region, named Medicon Valley • Medicon Valley is home to more than 60% of the biotechnological/pharmaceutical industry in Scandinavia • Ranks no. 2 in Europe as regards R&D spending in the European pharmaceutical industry • In 2006 Medicon Valley came in first in attracting investments within biotechnology and the pharmaceutical industry when compared to a range of European city-regions (Ernst & Young 2007) • More than 40,000 people work in the Life Sciences industry in the region herof 10,000 researchers
More information... www.mediconvalley.com
More information... Aalborg
• The ICT cluster in the region is the largest in Scandinavia and employs 100,000 people • Measured by scientific output, the Øresund Region is the leading region in Scandinavia • Advanced research with a focus on improving and creating technologies takes place at the region’s public research institutions and private R&D centres
Fashion COPENHAGEN ROSKILDE
• Copenhagen’s international atmosphere combined with an infrastructure which makes it easy to reach the other Nordic countries as well as the entire Baltic area, has in recent years attracted major names like Chanel, Max Mara, Gucci, Hermes and Mulberry to set up in Copenhagen • More than 25 of the international fashion world’s big names now have a presence in Copenhagen
The Baltic Sea