Denmark: Investing in Denmark
The level of FDI in Denmark is still far below the country's potential. According to UNCTAD's World Investment Report 2024, FDI inflows reached USD 8.7 billion in 2023, up by 13% year-on-year, making the country the 19th recipient worldwide. At the end of the same period, the total stock of FDI stood at USD 125 billion. Demark is traditionally a net investor, with a stock of outward FDI estimated at USD 236.9 billion. As of the end of 2023, investments were mostly oriented towards financial and insurance activities (39.5%), manufacturing (16.4%), professional, scientific and technical activities (12.7%), wholesale and retail trade (8.7%), real estate activities (6.8% - Bank of Denmark). FDI stocks are mostly owned by Sweden, the Netherlands, Norway, Luxembourg and the UK. FDIs to Denmark often pass through the Netherlands and Luxembourg as transit countries; however, if taking into consideration the country that ultimately controls the investments, the USA are the largest investor (around 15.6% of total FDIs, followed by Sweden (12.4%), the United Kingdom (11.2%) and France (7.3% - Bank of Denmark). According to the latest figures from the OECD, in the first half of 2024, FDI inflows to Denmark totalled USD 555 million, down from USD 969 million in the same period one year earlier.
The country's strengths include a highly skilled and multilingual workforce, a flexible labour market, ultramodern infrastructure (telecommunications, transportation, etc.) and attractive tax incentives for companies. Denmark follows a fixed exchange rate policy, keeping the Danish Krone closely tied to the Euro. The country is a global leader in green technology industries, including offshore wind and energy efficiency, as well as in shipping and life sciences. It actively welcomes foreign investment without distinguishing between EU and non-EU investors. On the other end, the internal market is small and vulnerable to external shocks, and the external debt level is high. Recently, the "Investment Screening Act" entered into force, introducing two alternative screening procedures: a sector-specific mandatory notification (for sectors related to national security and public order) and a voluntary notification for all other sectors. As of July 1, 2023, Denmark has revised its legislation. The amendment comprises two key elements for specific sensitive sectors and activities: the implementation of a two-phase process for endorsing foreign investments and an extension of the DISA's coverage to include agreements associated with the planned Danish Energy Island in the North Sea, which is a prominent infrastructure initiative led by the Danish Government aiming to establish a new island in the North Sea to serve as a central hub for upcoming wind farms and other renewable energy ventures. Companies intending to engage in contracts associated with the construction, joint ownership, or operation of the Energy Island are required to submit an application to the Danish Business Authority (DBA) and secure prior approval from the authority. Additionally, the Minister holds the authority to stipulate that all participants in tenders related to these contracts must also seek approval from the DBA.
Overall, the Danish business environment is well developed and the country ranks 10th among the 133 economies on the Global Innovation Index 2024 and stands at the 7th position (out of 184 countries) on the latest Index of Economic Freedom. Moreover, Denmark was once again ranked 1st in the Corruption Perception Index.
Foreign Direct Investment | 2020 | 2021 | 2022 |
FDI Inward Flow (million USD) | 1,685 | 4,681 | 4,494 |
FDI Stock (million USD) | 155,044 | 142,662 | 142,569 |
Number of Greenfield Investments* | 113 | 157 | 164 |
Value of Greenfield Investments (million USD) | 2,198 | 2,231 | 4,571 |
Source: UNCTAD, Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Country Comparison For the Protection of Investors | Denmark | OECD | United States | Germany |
Index of Transaction Transparency* | 7.0 | 6.5 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 5.0 | 5.3 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 8.0 | 7.3 | 9.0 | 5.0 |
Source: Doing Business, Latest available data
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
Advantages for FDI in Denmark:
Disdvantages for FDI in Denmark:
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Latest Update: February 2025