"Within one month our revenues had jumped over 50%."

Trade in Denmark

danish flag

Denmark has historically been one of the smaller European countries, and it continues to be one even today, with the Government of Denmark estimating the population to be 5,564,219 in 2011. Denmark, with a mixed market economy and a large welfare state, ranks as having the world’s highest level of income equality, as measured by its Gini Coefficient of .866(1.0 means complete equality). It has frequently ranked as the happiest, according to a ranking by Forbes. Denmark is also considered the least corrupt country in the world, as determined by Transparency International.Denmark’s mixed economy features above average European living standards, with a high level of Human Development according to the Human Development Index. Denmark ranks 16th in the world in terms of GDP (PPP) per capita and ranks 5th in nominal GDP per capita, with the IMF measuring the nominal GDP per capita at $60,961. According to World Bank Group, Denmark has the most flexible labor market in Europe; the policy is called flexicurity. It is easy to hire and fire (flexibility), and between jobs, unemployment compensation is very high (security). Denmark has a labor force of about 2.9 million. Denmark has the fourth highest ratio of post-graduate degree holders in the world, according to education statistics by UNESCO in 2009. Denmark has the world’s lowest level of income inequality, according to the UN, and the world’s highest minimum wage, according to the IMF. As of June 2010 the unemployment rate is at 6.6%, which is below the EU average of 9.6%, according to Eurostat. Denmark is one of the most competitive economies in the world according to World Economic Forum 2008 report, IMD and The Economist. According to rankings by OECD, Denmark has the most free financial markets in EU-15 and also one of the most free product markets.However, Denmark has a company tax rate of 25% and a special time limited tax regime for expatriates. The Danish taxation system is broad based, with a 25% VAT, in addition to excise taxes, income taxes and other fees. The overall tax burden (sum of all taxes, as a percentage of GDP) is estimated to be 46% in 2011, according to the Danish Ministry of Taxation. Denmark’s national currency, the krone , is de facto linked to the Euro through the ERM, with a pegged exchange rate, according to Denmark’s National Bank. Support for free trade is high – in a 2007 poll 76% responded that globalisation is a good thing, according to a poll done by Time Magazine. 70% of trade flows are inside the European Union. Denmark has the 9th highest export per capita in the world. Main exports include: machinery, animals and foodstuffs, chemicals and oil and gas, according to the Danish Exporters Association. Denmark is a net exporter of food and energy and has for a number of years had a balance of payments surplus. Denmark has ranked as the world’s 11th most free economy, of 162 countries, in an index created by the Wall Street Journal and Heritage Foundation, the Index of Economic Freedom 2008. While the Danish Economy is quite rich, it is also fairly small with a nominal GDP of $310.760 billion, as estimated by the IMF in 2011.

Overall, Denmark is a mixed bag for businesses. It is considered by the World Bank as the 5th easiest country to do business in for 2012, yet the Danish economy also contracted by nearly 5% in 2009, largely due to the global financial crises. The population does not seem to be growing, with low birth rates and low levels of immigration. As a result, the market is largely stagnant in terms of future growth, even though it is one of the richest markets in Europe. However, iIt is ultimately up to foreign businesses if they feel that Denmark is the type of country they would want to do business in. For more information about doing business in Denmark, you can visit the Invest in Denmark website, which was set up by the Government of Denmark at investindk.com.

Tags: , , ,

Author:Globial International Business Team

The Globial International Business Team researches, analyzes, and reports on all things related to global trade and business.

Subscribe

Get our news and articles

No comments yet.

Leave a Reply

CommentLuv badge