An official website of the United States Government Here's how you know

Official websites use .gov

A .gov website belongs to an official government organization in the United States.

Secure .gov websites use HTTPS

A lock ( ) or https:// means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites.


Denmark is regarded by many independent observers as one of the world’s most attractive business environments and ranks highly in indices measuring political, economic, and regulatory stability. It is a member of the European Union (EU), and Danish legislation and regulations conform to EU standards on virtually all issues. It maintains a fixed exchange rate policy, with the Danish Krone linked closely to the Euro. Denmark is a social welfare state with a thoroughly modern market economy heavily driven by trade in goods and services. Given that exports account for about 60 percent of GDP, the economic conditions of its major trading partners – the United States, Germany, Sweden, and the United Kingdom – have a substantial impact on Danish national accounts.

Denmark is a world leader in “green technology” industries, such as offshore wind and energy efficiency, and in sectors such as shipping and life sciences. Denmark is a net exporter of food. Its manufacturing sector depends on raw material imports. Within the EU, Denmark is among the strongest supporters of liberal trade policy. Transparency International regularly ranks Denmark as perceived as the least corrupt country in the world. Denmark is strategically situated to link continental Europe with the Nordic and Baltic countries. Transport and communications infrastructures are efficient.

The Danish economy weathered the pandemic with among the lowest declines in GDP in the EU. Denmark’s economic activity and employment have surpassed their pre-pandemic levels and trends, but companies across sectors cite labor shortages as a key challenge. In May 2023, the Ministry of Economic Affairs revised its GDP growth projections, forecasting 0.6 percent GDP growth in 2023, decelerating from 3.8 percent annual GDP growth in 2022. The Ministry projects 1.4 percent growth in 2024. While inflation has come down from 10.1 percent annually in October 2022 to 6.7 percent in March 2023, the Ministry projects the Danish economy will slow due to higher interest rate costs and curtailed private consumption. Consumer and business confidence have also decreased significantly. Uncertainty stemming from Russia’s war in Ukraine, volatile energy prices, as well as still elevated levels of inflation, is further clouding the outlook. Denmark’s underlying macroeconomic conditions, however, are healthy, and the investment climate is sound. The entrepreneurial climate, including female-led entrepreneurship, is robust.

Legislation establishing a foreign investment screening mechanism to prevent threats to national security and public order came into effect on July 1, 2021. The mechanism requires mandatory notification for investments in the following five sectors: defense, IT security and processing of classified information, companies producing dual-use items, critical technology, and critical infrastructure. It allows for voluntary notification for all sectors. The legislation does not apply to Greenland or to the Faroe Islands, though both are looking into potential legislation.

In 2020, the Danish parliament passed the Danish Climate Act, which established a statutory target for reducing greenhouse gas emissions by 70 percent from 1990 levels in 2030 and achieving net zero by 2050. In December 2022 the government announced its intention to reach net zero by 2045 and 110 percent emissions reduction by 2050 while maintaining the 2030 target. In 2022, parliament passed several agreements, to quadruple the combined onshore wind and solar electricity production capacity by 2030; an expansion of offshore wind; an expansion of district heating; and contributing to European independence from Russian gas by also increasing production of biogas as well as natural gas from the North Sea. Parliament also passed a higher and more uniform CO2 tax covering more industries to reduce CO2 emissions by 3.7 million tons in 2030, to be implemented on top of the EU Emissions Trading System (EU ETS).

Note: Additional information on the investment climates of the Faroe Islands and Greenland can be found at the end of this report.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Adress
TI Corruption Perceptions Index 2022 1 of 180
Global Innovation Index 2022 10 of 132
U.S. FDI in partner country ($M USD, historical stock positions) 2021 USD 16,4
World Bank GNI per capita 2021 USD 68,300

Policies Toward Foreign Direct Investment

As a small country with an open economy, Denmark is highly dependent on foreign trade and investment. Exports comprise the most significant component (60 percent) of GDP. The Economist Intelligence Unit (EIU) 2023 Q2 outlook ranks Denmark as the world’s second most-most attractive business environment (2023 – 2027) after Singapore and first regionally. The EIU characterizes Denmark’s business environment as reflecting excellent infrastructure, a friendly policy toward private enterprise and competition, low bureaucracy, and a well-developed digital sector. Principal concerns include low productivity growth, a high personal tax burden, potential capacity constraints on the labor market, and obstacles to competition in parts of domestic-oriented services sectors. Overall, however, operating conditions for companies are broadly favorable. Denmark ranks highly in multiple categories, including its political and institutional environment, macroeconomic stability, foreign investment policy, private enterprise policy, and infrastructure.

As of February 2023, the EIU rated Denmark an “AA” country on its Country Risk rating. Denmark ranked tenth out of 140 on the World Economic Forum’s 2019 Global Competitiveness Report and sixth on the EIU 2022 Democracy Index. Denmark has an AAA rating from Standard & Poor’s, Moody’s, and Fitch Group. “Invest in Denmark,” an agency of the Ministry of Foreign Affairs and part of the Danish Trade Council, provides detailed information to potential investors. Invest in Denmark has prioritized four sectors in its strategy to attract foreign investment: clean tech, tech, life sciences and food. The website for the agency is .

Limits on Foreign Control and Right to Private Ownership and Establishment

As an EU member state, Denmark is bound by EU rules on the free movement of goods, capital, persons, and certain services. Denmark welcomes foreign investment and does not discriminate between EU and other investors.

Denmark’s central and regional governments actively encourage foreign investment on a national-treatment basis, with relatively few foreign control limits, nor any reported bias against foreign companies from municipal or national authorities when compared to domestic investors. A foreign investment screening mechanism came into force July 1, 2021, to prevent threats to national security and public order from foreign direct investment, but there are otherwise no additional permits required by foreign investors. The mechanism requires mandatory notification for five sectors and allows for voluntary notification for all sectors. The sectors requiring mandatory notification are defense, IT security and processing of classified information, companies producing dual-use items, critical technology, and critical infrastructure. Mandatory notification applies for investments reaching 10 percent ownership or control, and voluntary notification can be made for investments where the company reaches 25 percent ownership or control. A pre-screening process exists to determine if the investment is in the critical technology or critical infrastructure sector. Notification and guidance all take place online, handled by the Danish Business Authority: 

A foreign or domestic private entity may freely establish, own, and dispose of a business enterprise in Denmark. The capital requirement for establishing a corporation (Aktieselskab A/S) or Limited Partnership (Partnerselskab P/S) is $56,500 (DKK 400,000) and for establishing a private limited liability company (Anpartsselskab ApS) $5,650 (DKK 40,000). In 2019, the government lowered the capital requirements to set up a private limited liability company, which brought Denmark more in line with other Scandinavian countries. No restrictions apply regarding the residency of directors and managers.

Since October 2004, any private entity may establish a European public limited company (SE company) in Denmark. The legal framework of an SE company is subject to Danish corporate law, but it is possible to change the nationality of the company without liquidation and re-founding. An SE company must be registered at the Danish Business Authority if its official address is in Denmark. The minimum capital requirement is $130,700 (EUR 120,000).

Danish professional certification and/or local Danish experience are required to provide professional services in Denmark. In some instances, Denmark may accept equivalent professional certification from other EU or Nordic countries on a reciprocal basis. EU-wide residency requirements apply to the provision of legal and accountancy services.

In addition to investment screening cases, ownership restrictions apply to the following sectors:

  • Oil and Gas: Requires 20 percent Danish government participation on a “non-carried interest” basis.
  • Carbon Capture and Storage (CCS): Requires 20 percent Danish government participation on a “non-carried interest” basis for storage.
  • Offshore Wind: As of May 2023, the framework conditions for offshore wind tenders require 20 percent government co-ownership.
  • Maritime Services: There are foreign (non-EU resident) ownership requirements on Danish-flagged vessels other than those owned by an enterprise incorporated in Denmark. Ships owned by Danish citizens, Danish partnerships, or Danish limited liability companies are eligible for registration in the Danish International Ships Register (DIS). Vessels owned by EU or European Economic Area (EEA) entities with a genuine, demonstrable link to Denmark are also eligible for registration. Foreign companies with a significant Danish interest can register a ship in the DIS.
  • Civil Aviation: For an airline to be established in Denmark, it must have majority ownership and be effectively controlled by an EU state or a national of an EU state, unless otherwise provided for through an international agreement to which the EU is a signatory.
  • Financial Services: Non-resident financial institutions may engage in securities trading on the Copenhagen Stock Exchange only through subsidiaries incorporated in Denmark.

Real Estate: Ownership of holiday homes, also known as summer houses, is restricted to Danish citizens. Such homes are generally located along the Danish coastline and may not be used as full-year residences. On a case-by-case basis, the Ministry of Justice may waive the citizenship requirement for those with close familial, linguistic, cultural, or other close connections to Denmark or the specific property. In general, EU and EEA citizens may purchase full-year residential property or real estate that supports self-employment without obtaining prior authorization from the Ministry of Justice. Companies domiciled in an EU or an EEA Member State that have set up or will set up subsidiaries or agencies or will provide services in Denmark may, in general, also purchase real property in Denmark without prior authorization. Non-EU/EEA citizens must obtain authorization from the Ministry of Justice to purchase real estate in Denmark, which is generally granted to those with permanent residence in Denmark or who have lived in Denmark for a consecutive period of five years.

Other Investment Policy Reviews

The most recent United Nations Conference on Trade and Development (UNCTAD) review of Denmark occurred in March 2013 and is available here: . There is no specific mention of Denmark in the latest WTO Trade Policy Review of the European Union, revised in December 2019.

The EU Commission’s European Semester documents for Denmark are available here: 

Denmark ranked first out of 180 in Transparency International’s 2022 Corruption Perceptions Index. In the IMD 2022 World Competitiveness Ranking, Denmark ranked first out of 63 countries. The World Intellectual Property Organization (WIPO) ranked Denmark tenth out of 132 in its 2022 Global Innovation Index.

Business Facilitation

The Danish Business Authority (DBA) is responsible for business registrations in Denmark. As a part of the DBA, “Business in Denmark” provides information on relevant Danish rules and online registrations to foreign companies in English. The Danish business registration website, , is the principal digital tool for licensing and registering companies in Denmark and offers a business registration process that is clear and complete.

Registration of sole proprietorships and partnerships is free of charge. For other types of businesses, online registration costs $95(DKK 670). Registration by email or mail costs $304 (DKK 2,150).

The process for establishing a new business is distinct from that of registration. The Ministry of Foreign Affairs’ “Invest in Denmark” program provides a step-by-step guide to establishing a business at , along with other relevant resources at . The services are free of charge and available to all investors, regardless of country of origin.

The processing time for establishing a new business varies depending on the chosen business entity. Establishing a Danish private limited liability company (ApS), for example, generally takes four to six weeks for a standard application. Establishing a sole proprietorship (Enkeltmandsvirksomhed) is more straightforward, with processing generally taking about one week.

Those providing temporary services in Denmark must provide their company details to the Registry of Foreign Service Providers (RUT). The website ( ) provides English guidance on registering a service with RUT. A public digital signature, referred to as a NemID or its replacement MitID, is required for those wishing to register a foreign company in Denmark. A CPR number (a 10-digit personal identification number) and valid identification are needed to obtain a NemID/MitID. Danish citizenship is not a requirement.

Denmark defines small enterprises as those with fewer than 50 employees. Annual revenue or the yearly balance sheet total must be lower than $12.6 million (DKK 89 million) or $6.2 million (DKK 44 million), respectively. Medium-sized enterprises cannot have more than 250 employees. Limits on annual revenue or the yearly balance sheet total are $44.2 million (DKK 313 million) or $22.0 million (DKK 156 million).

Outward Investment

Danish companies are not restricted from investing abroad, and Danish outward investment has exceeded inward investments for more than a decade.

The Trade Council, a part of the Danish Ministry of Foreign Affairs, assists Danish and international companies with export and investment promotion services. EKF Denmark´s Export Credit Agency (EKF), the Growth Fund (Vaekstfonden), and the Danish Green Investment Fund (DGIF) merged under the name Denmark´s Export and Investment Fund (EIFO) as of January 1, 2023. EIFO provides a single point of access for all Danish companies in need of risk-tolerant government co-financing, both for capital to be used domestically or abroad.

The United States and Denmark have shared a Friendship, Commerce, and Navigation Treaty since 1961 that, among other things, ensures National Treatment, Most-Favored Nation status, transparency of the regulatory process, and competitive equality with state-owned enterprises. According to UNCTAD, Denmark has Bilateral Investment Treaties (BITs) signed and in force with 39 countries (including Hong Kong), see list at: .
There has been little change to these investment protection agreements’ status since the European Union’s Lisbon Treaty came into force, which moved competency to the EU Commission.

The U.S.-Danish Bilateral Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income has been in force since 2000. In May 2006, the parties signed an amending protocol; the most significant aspect relates to eliminating withholding tax on cross-border dividend payments. On November 19, 2012, the United States and Denmark signed an Intergovernmental Agreement to implement the Foreign Account Tax Compliance Act (FATCA).

Denmark is a member of the OECD Inclusive Framework on Base Erosion and Profit Shifting, and a party to the Inclusive Framework’s October 2021 deal on the two-pillar solution to global tax challenges, including a global minimum corporate tax.

Transparency of the Regulatory System

Denmark’s judicial system is highly regarded and considered fair. Its legal system is independent of the government’s legislative branch and includes written and consistently applied commercial and bankruptcy laws. Secured interests in property are recognized and enforced. The WorldJustice Project (WJP) Rule of Law Index rates Denmark first among 140 countries. The WJP surveyed citizens and experts in 140 countries and jurisdictions in order to measure the state of the rule of law.

To facilitate business administration, Denmark maintains only two “legislative days” per year—January 1 and July 1—as the only days when new laws and regulations affecting the business sector can come into effect. Danish laws and policies granting national treatment to foreign investments are designed to increase FDI in Denmark. Denmark consistently applies high standards to health, environment, safety, and labor laws. Danish corporate law is generally in conformity with current EU legislation. The legal, regulatory, and accounting systems are relatively transparent and follow international standards.

Bureaucratic procedures are streamlined and transparent; proposed laws and regulations are published in draft form for public comment. Public finances and debt obligations are transparent.

The government uses transparent policies and effective laws to foster competition and establish “clear rules of the game,” consistent with international norms and applicable equally to Danish and foreign entities. The Danish Competition and Consumer Authority (CCA) works to make markets well-functioning so that businesses compete efficiently on all parameters. The CCA is a government agency under the Danish Ministry of Industry, Business, and Financial Affairs. It enforces the Danish Competition Act. This Act, along with Danish consumer legislation, aims to promote efficient resource allocation in society, promote efficient competition, create a level playing field for enterprises, and protect consumers.

Corporate tax records of all companies, associations, and foundations that pay taxes in Denmark are published by the tax authorities according to public law since December 2012 and are updated annually. The corporate tax rate is 22 percent. Greenland and the Faroe Islands retain autonomy for their respective tax policies.

Publicly listed companies in Denmark must adhere to the Danish Financial Statements Act when preparing their annual reports. The accounting principles are International Accounting Standards (IAS), International Financial Reporting Standards (IFRS), and Danish Generally Accepted Accounting Principles (GAAP). Financial statements must be prepared annually. The Danish Financial Statements Act covers all businesses.

Private limited companies, public limited companies, and corporate funds are obliged to prepare financial statements under accounting classes determined by company size. There are four different accounting classes: A, B, C and D. Accounting class B is further divided into micro B and B, and C is divided into medium-sized C and large C. The smallest companies belong to accounting class A, while the largest belong to accounting class D. The classification is based on the assessed size of the company based on two out of three parameters: net revenue, balance sheet, and number of employees.

  • Personal companies as well as companies with limited liability (class A): Fewer than an annual average of 10 full-time employees and total assets not exceeding $1 million (DKK 7 million) or net revenue not exceeding $2 million (DKK 14 million) during the fiscal year. According to the Danish Financial Statements Act, personally-owned businesses, personally-owned general partnerships (multiple owners), and general funds are characterized as class A; there is no requirement to prepare financial statements unless the owner voluntarily chooses to do so.
  • Class B. Private limited liability companies, commercial funds, and companies with limited liability.
    • Micro businesses (class micro B): Fewer than an annual average of 10 full-time employees and total assets not exceeding $381,000 (DKK 2.7 million) or net revenue not exceeding $762000 (DKK 5.4 million) during the fiscal year.
  • Small businesses (class B): Fewer than an annual average of 50 full-time employees and total assets not exceeding $6.2 million (DKK 44 million) or net revenue not exceeding $12.6 million (DKK 89 million) during the fiscal year.
  • Medium-sized enterprises (class C medium): Fewer than an annual average of 250 full-time employees and total assets not exceeding $22 million (DKK 156 million) or net revenue not exceeding $44 million (DKK 313 million) during the fiscal year.
  • Large companies (class C large): Companies that are neither small nor medium companies, and have an annual average of at least 250 full-time employees, total assets in excess of $22 million (DKK 156 million), or net revenue in excess of $44 million (DKK 313 million) during the fiscal year, but are not a class D company.
  • Accounting class D: Publicly-traded companies and state-owned stock-based enterprises.

Large companies (class C and D) are required to report annually on environmental, social, and governance (ESG) efforts. This includes reporting on environmental; social; labor and human rights; and anti-corruption and bribery efforts. The reporting requirement covers four components: the company’s business model, material risks associated with each of the four issue areas, non-financial key performance indicators, and integrative referral to the financial amounts provided elsewhere in the annual report. There is no requirement for companies to have policies on the four issues, though they are required to follow a do-or-explain principle that requires companies to explain their policies in substance or explain why they have decided not to have a policy on the issue. For implemented policies, companies are required to disclose the substance of the policy and how they translate policies into action.

The rules on reporting generally follow EU Directive 2014/95/EU on disclosure of non-financial information though certain issues, including reporting on the company’s impact on climate change, are stricter in Denmark than the directive. The rules on reporting on these issues allow for an exception if the companies report on similar issues using international standards such as UN Global Compact’s Communication on Progress.

All government draft proposed regulations are published at “Høringsportalen” ( ) and are available for comment from interested parties. Following the comment period, the government may revise draft regulations before publication on the Danish parliament’s website ( ). Final regulations are published at  and . All ministries and agencies are required to publish proposed regulations. Denmark has a World Bank composite score of 4.75 for the Global Indicators of Regulatory Governance, on a zero to five scale, see additional information here:

International Regulatory Considerations

Denmark is a member of the European Union and is an active supporter of the internal market. As a result, many aspects of business regulation are dictated by the EU and hence aligned with other EU Member States.

Denmark adheres to the WTO Agreement on Trade-Related Investment Measures (TRIMs); no inconsistencies have been reported.

Legal System and Judicial Independence

Denmark’s decision-making power is divided into the legislative, executive, and judicial branches. The principles of separation of power and an independent judiciary help ensure democracy and Danish citizens’ legal rights. The district courts, the high courts, and the Supreme Court represent the Danish legal system’s three basic levels. The legal system also comprises other institutions with special functions, e.g., the Maritime and Commercial Court.

For further information, please see:  

Laws and Regulations on Foreign Direct Investment

As an EU member state, Denmark is bound by EU rules on the free movement of goods, capital, persons, and certain services. The government agency “Invest in Denmark” is part of the Danish Trade Council and is situated within the Ministry of Foreign Affairs. The agency provides detailed information to potential investors. The website for the agency is .

Competition and Antitrust Laws

The Danish Competition and Consumer Authority (CCA) reviews transactions for competition-related concerns. A merger or takeover is subject to approval by the CCA. Large-scale mergers also require approval from EU competition authorities. According to the Danish Competition Act, the CCA requires notification of mergers and takeovers if the aggregate annual revenue in Denmark of all undertakings involved is more than DKK 900 million ($127 million) and the aggregate yearly revenue in Denmark of each of at least two of the undertakings concerned is more than DKK 100 million ($14.1 million), or if the aggregate annual revenue in Denmark of at least one of the undertakings involved is more than DKK 3.8 billion ($536 million) and the aggregate yearly worldwide revenue of at least one of the other undertakings concerned is more than DKK 3.8 billion ($536 million). When a merger results from the acquisition of parts of one or more undertakings, the calculation of the revenue referred to shall only comprise the share of the revenue of the seller or sellers that relate to the assets acquired. Merger control provisions are contained in Part Four of the  Danish Competition Act and in the Executive Order on the Notification of Mergers . Revenue is calculated under the Executive Order on the Calculation of Turnover in the Competition Act .

A full notification of a merger must include the information and documents specified in the full notification form, Annex 1 – Information for Full Notification of Mergers . A simplified notification of a merger must include the information and documents specified in the simplified notification form, Annex 2 – Information for Simplified Notification of Mergers . The fee for a simplified notification amounts to DKK 50,000 ($7,950). The fee for a full notification amounts to 0.015 percent of the aggregate annual turnover in Denmark of the undertakings involved; this fee is capped at DKK 1,500,000 ($238,400).

Additional information concerning notification of mergers is available in the Guidelines to the Executive Order on Notification of Mergers and on Merger Fees . More general information on Danish merger control can be found in the Merger Guidelines .

Expropriation and Compensation

By law, private property can only be expropriated for public purposes, in a non-discriminatory manner, with reasonable compensation, and under established principles of international law. There have been no recent expropriations of significance in Denmark.

Dispute Settlement

ICSID Convention and New York Convention

There have been no significant investment disputes in Denmark in recent years. Denmark has been a member of the World Bank-based International Center for the Settlement of Investment Disputes (ICSID) since 1968, and extended the application of the Convention to the Faroe Islands as of 1969. Denmark is a party to the 1958 (New York) Convention on the Recognition and Enforcement of Foreign Arbitral Awards, meaning local courts must enforce international arbitration awards that meet specific criteria. Subsequent Danish legislation makes international arbitration of investment disputes binding in Denmark.

Investor-State Dispute Settlement


International Commercial Arbitration and Foreign Courts

Denmark is a party to the 1961 European Convention on International Commercial Arbitration and to the 1962 Agreement relating to the application of this Convention. Denmark adopted the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration in 1985.

Bankruptcy Regulations

Monetary judgments under the bankruptcy law are made in freely convertible Danish Kroner. The bankruptcy law addresses creditors’ claims in the following order: (1) costs and debt accrued during the treatment of the bankruptcy; (2) costs, including the court tax, relating to attempts to find a solution other than bankruptcy; (3) wage claims and holiday pay; (4) excise taxes owed to the government; and (5) all other claims.

Investment Incentives

Performance incentives are available to both foreign and domestic investors. Examples include grants or preferential financing in designated regional development areas. Foreign subsidiaries located in Denmark can participate in government-financed or subsidized research programs on a national-treatment basis.

Denmark is recognized as a global leader in green and renewable energy. The government provides a multitude of support programs to private households and companies for energy efficiency renovations. Similarly, several programs exist for maturation and tech commercialization of green technologies. In December 2021, the Danish parliament reached a political framework agreement for a total of $2.3 billion (DKK 16 billion) support for carbon capture, utilization, and storage (CCUS) between 2022 and 2030. The Energy Technology Development and Demonstration Program (EUDP) supports private companies and universities to develop and demonstrate new energy technologies, in support of Denmark’s goal of a 70 percent carbon reduction by 2030 and climate neutrality by 2050. The EUDP has contributed $875 million (DKK 6.2 billion) to more than 1,000 projects since its inception in 2007. An overview of the programs can be found on the Danish Energy Agency’s website in Danish: 

Foreign Trade Zones/Free Ports/Trade Facilitation

The only free port in Denmark is the Copenhagen Free Port, operated by the Port of Copenhagen. The Port of Copenhagen and the Port of Malmö (Sweden) merged their commercial operations in 2001, including the free port activities, in a joint company named CMP. CMP is one of the largest port and terminal operators in the Nordic Region and one of the largest Northern European cruise ship ports; it occupies a key position in the Baltic Sea region for the distribution of cars and transit of oil. The facilities in the Free Port are mainly used for tax-free warehousing of imported goods, for exports, and for in-transit trade. Tax and duties are not payable until cargo leaves the Free Port. The processing of cargo and the preparation and finishing of imported automobiles for sale can freely be set up in the Free Port. Manufacturing operations can be established with permission of the customs authorities, which is granted if special reasons exist for having the facility in the Free Port area. The Copenhagen Free Port welcomes foreign companies establishing warehouse and storage facilities.

Performance and Data Localization Requirements

Danish law mandates performance requirements in connection with investments in hydrocarbon exploration, where concession terms typically require a fixed work program, including seismic surveys, and in some cases, exploratory drilling, consistent with applicable EU directives. Performance requirements are primarily designed to protect the environment, mainly by encouraging reduced energy and water use. Several environmental and energy requirements are universally applied to households as well as businesses in Denmark, both foreign and domestic. For instance, Denmark was the first of the EU countries, in January 1993, to introduce a carbon dioxide (CO2) tax on business and industry. This includes specific reimbursement schemes and subsidy measures to reduce the costs for businesses, thereby safeguarding competitiveness.

Performance requirements are governed by Danish legislation and EU regulations and are applied uniformly to domestic and foreign investors. Potential violations of the rules governing this area are punishable by fines or imprisonment.

The Danish government does not follow “forced localization” policies, nor does it require foreign IT providers to turn over source code or provide access to surveillance. The Danish Data Protection Agency, the Ministry of Justice, and the Ministry of Digitalization and Gender Equality are the entities involved with data storage.

Cloud usage for data storage is governed by Danish legislation and EU regulations. Since the annulment of Privacy Shield, the transfer of personal information to third countries has become more burdensome. The Danish Data Protection Agency published a “Guide on the use of Cloud Services” to assist with cloud usage. It is available in English here:

Real Property

Property rights in Denmark are well protected by law and in practice. Real estate is chiefly financed through the well-established Danish mortgage bond credit system, the security of which compares to that of government bonds. In compliance with the covered bond definition in the EU Capital Requirements Directive (CRD), the Danish mortgage banking regulation allows for commercial banks to have the same opportunities as mortgage banks and ship-financing institutions to issue covered bonds. Only issuers that have been granted a license from the Danish Financial Supervisory Authority (FSA) are permitted to issue Danish covered bonds.

Secured interests in property are recognized and enforced in Denmark. All mortgage credits in real estate are recorded in local public registers of mortgages. Except for interests in cars and commercial ships, which are also publicly recorded, other property interests are generally unrecorded. The local public registers are a reliable system of recording security interests. Denmark ranked sixth out of 129 countries in the Property Rights Alliance’s International Property Rights Index 2022, and fourth in its region.

Intellectual Property Rights

Intellectual property rights (IPR) in Denmark are well protected and enforced. Denmark has ratified and adheres to key international conventions and treaties concerning protection of IPR, including the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and several treaties administered by the World Intellectual Property Organization (WIPO), including the Berne Convention, the Paris Convention, the Patent Cooperation Treaty (PCT), the WIPO Copyright Treaty, and the WIPO Performances and Phonograms Treaty.

For additional information about national laws and points of contact at local IPR offices, please see WIPO’s country profiles at .

A list of attorneys in Denmark known to accept foreign clients can be found at  This list of attorneys and law firms is provided by the U.S. Embassy as a convenience to U.S. citizens. It is not intended to be a comprehensive list of attorneys in Denmark, and the absence of an attorney from the list is in no way a reflection on competence. A complete list of attorneys in Denmark, Greenland, and the Faroe Islands may be found at the Danish Bar Association web site: .

Capital Markets and Portfolio Investment

Denmark has fully liberalized foreign exchange flows, including those for direct and portfolio investment purposes. Credit is allocated on market terms and is freely available. Denmark adheres to its IMF Article VIII obligations. The Danish banking system is under the regulatory oversight of the Financial Supervisory Authority. Differentiated voting rights – A and B stocks – are used to some extent, and several Danish companies are controlled by foundations, which can restrict potential hostile takeovers, including foreign takeovers.

The Danish stock market functions efficiently. In 2005, the Copenhagen Stock Exchange became part of the integrated Nordic and Baltic marketplace, OMX Exchanges, which is headquartered in Stockholm. Besides Stockholm and Copenhagen, OMX also includes the stock exchanges in Helsinki, Tallinn, Riga, and Vilnius. To increase the access to capital for primarily small companies, the OMX in December 2005 opened a Nordic alternative marketplace – “First North” – in Denmark. In February 2008, the NASDAQ-OMX Group acquired the exchanges.

The Danish stock market is divided into four different branches/indexes. The OMXC25 index contains the 25 most valuable companies in Denmark. Other large companies with a market value exceeding $1.05 billion (EUR 1 billion) are in the group of “Large Cap,” companies with a market value between $157 million (EU 150 million) and $1.05 billion (EUR 1 billion) belong to the “Mid Cap” segment, while companies with a market value smaller than $157 million (EUR 150 million) belong to the “Small Cap” group.

Money and Banking System

The major Danish banks are rated by international agencies, and their creditworthiness is rated high by international standards. The European Central Bank and the Danish Central Bank (Nationalbanken) conduct annual stress tests of both systemic and larger banks, and the Danish Central Bank reported in December 2022 that Denmark’s tested banks have all passed stress tests, most by considerable margins.

Denmark’s banking sector is relatively large; based on the ratio of consolidated banking assets to GDP, the sector is three times bigger than the national economy. By February 2023, the total of Danish shares valued $641.2 billion (DKK 4.46 trillion) and were owned 57.5 percent by foreign owners and 42.5 percent by Danish owners, of which 13.0 percent held by households and 3.2 percent by the government. The three largest Danish banks – Danske Bank, Nordea Bank Danmark, and Jyske Bank – hold approximately 75 percent of the total assets in the Danish banking sector.

The primary goal of the Central Bank (Nationalbanken) is to maintain the peg of the Danish currency to the Euro – with allowed fluctuations of 2.25 percent. The Central Bank also functions as the general lender to Danish commercial banks and controls the money supply in the economy.

As occurred in many countries, Danish banks experienced significant turbulence in 2008 – 2009. The Danish parliament subsequently passed a series of measures to establish a “safety net” program, provide government lending to financial institutions in need of capital to uphold their solvency requirements, and ensure the orderly winding down of failed banks. The parliament passed an additional measure, named Bank Package 4, in August 2011, which sought to identify systemically important financial institutions, ensure the liquidity of banks that assume control of a troubled bank, support banks acquiring troubled banks by allowing them to write off obligations of the troubled bank to the government, and change the funding mechanism for the sector-funded guarantee fund to a premiums-based, pay-as-you-go system. According to the Danish government, Bank Package 4 provides mechanisms for a sector solution to troubled banks without senior debt holder losses but does not supersede earlier legislation. As such, senior debt holder losses are still a possibility in the event of a bank failure.

On October 10, 2013, the Danish Minister for Business and Growth concluded a political agreement with broad political support which, based on the most recent financial statements, identified specific financial institutions as “systemically important” (SIFI). The SIFIs in Denmark as of June 2022, the most recent designation, are Danske Bank A/S, Nykredit Realkredit A/S, Nordea Kredit Realkreditaktieselskab, Jyske Bank A/S, Sydbank A/S, DLR Kredit A/S, Spar Nord Bank A/S and A/S Arbejdernes Landsbank. The government identified these institutions based on quantitative measures. Effective January 2022, the government’s model for calculating which banks are systemic includes 12 indicators, up from three. The 12 indicators can be summarized in four categories: size, importance, complexity, and interconnectedness. The new model aligns the methodology with the recommendations of the European Banking Authority. The new model only applies to Danish banks. The Faroese SIFIs are P/F BankNordik, and Betri Banki P/F, while Grønlandsbanken is the only SIFI in Greenland.

The Danish government projected in March 2023 that Denmark’s debt to GDP ratio was approximately 30 percent at the end of 2022 and will remain at this level throughout 2024. The Ministry of Economic Affairs noted that Denmark ran a 2.9 percent budget surplus in 2022, and projects budget surpluses of 1.6 percent and 0.8 percent in 2023 and 2024, respectively.

Foreign Exchange and Remittances

Foreign Exchange

Exchange rate conversions throughout this document are based on the 2022 average exchange rate where Danish Kroner (DKK) 7.083019 = 1 USD.

Denmark has not adopted the Euro currency. According to the Stability and Growth Pact, a Euro country’s debt to GDP ratio cannot exceed 60 percent and budget deficit to GDP ratio cannot exceed 3 percent. The country meets the EU’s economic convergence criteria for membership and can join if it wishes to do so. Denmark conducts a fixed exchange rate policy with the Danish Krone linked closely to the Euro within the Exchange Rate Mechanism (ERM) II framework. The Danish Krone (DKK; plural: Kroner, in English, “the Crown”) has a fluctuation band of +/- 2.25 percent of the central rate of DKK 746.038 per 100 Euro. By treaty, Denmark is not required to adopt the Euro as its currency or to join the European banking union.

The Danish political reservation concerning Euro participation can only be abolished by national referendum, and Danish voters have twice (in 1992 and 2000) voted it down. The government has stated that it supports adopting the Euro in principle, but regular polling on this issue shows a majority of public opinion remains in favor of keeping the Krone.

Remittance Policies

There are no restrictions on converting or transferring funds associated with an investment into or out of Denmark. Policies in place are intended to facilitate the free flow of capital and to support the flow of resources in the product and services markets. Foreign investors can obtain credit in the local market at normal market terms, and a wide range of credit instruments are available.

Sovereign Wealth Funds

Denmark maintains no sovereign wealth funds.

Denmark is party to the Government Procurement Agreement (GPA) within the framework of the WTO. State-owned enterprises (SOEs) hold dominant positions in rail, energy, utilities, and broadcast media in Denmark. The list of the 30 state-owned or partially state-owned enterprises is here: . Large-scale public procurement must go through public tender in accordance with EU legislation. Competition from SOEs is not considered a barrier to foreign investment in Denmark. As an OECD member, Denmark promotes and upholds the OECD Corporate Governance Principles and subsidiary SOE Guidelines.

Privatization Program

Denmark has no current plans to privatize its SOEs.

As an OECD member, Denmark promotes, through the Danish Business Authority (DBA), the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights. Denmark’s National Contact Point can be reached at: 

Since 2009, the legal requirements in the Danish Financial Statements Act obligate the largest Danish companies (accounting class D) to submit a report on social responsibility. Since 2020, this requirement also applies to medium-sized companies (accounting class C). This includes reporting on conduct with respect to human rights and to reducing the climate impact of the company’s activities. Additionally, target figures for the gender composition of the board of directors, as well as policies for increasing the proportion of the underrepresented gender at the company’s management levels, must be reported (Danish Financial Statements Act, sections 99a and 99b).

The Danish Business Authority hosts  (social responsibility), which provides a series of tools for companies to work with Responsible Business Conduct (RBC), including  a free online tool that can help companies implement responsible supply chain management. Other tools include the UN Global Compact Self Assessment Tool; a measure to report on inclusive labor market initiatives; and guides for responsible investments based on OECD and UN guidelines.

Denmark is a signatory of the Montreux Document on Private Military and Security Companies.

Climate Issues

Denmark is considered a leading country in facilitating the green transition. It ranks highly on most rankings on the green transition and climate change mitigation, including first on the Global Green Growth Institute’s Global Green Growth Index, second on the ITIF’s Global Energy Innovation Index, and fourth on MIT Technology Review’s Green Future Index.

In 2020, the Danish parliament passed the Danish Climate Act, which established a statutory target for reducing greenhouse gas emissions 70 percent from 1990 levels by 2030 and achieving net zero by 2050. The act introduced a duty to act on the government to ensure Denmark meets the targets. The Climate Act established the Danish Council on Climate Change as an independent expert advisory body, tasked with publishing an annual assessment of progress toward the targets and providing policy recommendations to meet the targets. In December 2022 the government announced its intention to advance the targets to net zero by 2045 and 110 percent greenhouse gas reductions by 2050, while maintaining 70 percent by 2030.

The Danish parliament has reached several broad agreements to ensure Denmark meets its green transition and net zero targets, with negotiations announced on additional proposals. In 2022, parliament passed several agreements to quadruple the combined onshore wind and solar electricity production capacity by 2030; an expansion of offshore wind; an expansion of district heating; and contributing to European independence from Russian gas by also increasing production of biogas as well as natural gas from the North Sea. Parliament also passed a higher and more uniform CO2 tax covering more industries to reduce CO2 emissions by 3.7 million tons in 2030, to be implemented on top of the EU Emissions Trading System (EU ETS).

Denmark has several schemes and pools of funding to increase energy efficiency in industry and business to facilitate the green transition. A list of programs can be found in Danish on the Danish Energy Agency’s website: . A multitude of programs for energy efficiency renovations for private or commercial real estate exist, as well as tech maturation and marketization programs. A 2021 agreement on carbon capture, utilization and storage (CCUS) will invest $2.5 billion (DKK 16 billion) between 2022 and 2030. The Danish government has also announced plans to build two massive “energy islands” to accelerate the movement to electrification, including via green fuels, potentially with the capacity for generation and distribution of 10 GW of electricity. In 2022, heads of governments from Denmark, Germany, Belgium, and the Netherlands co-signed a joint declaration to install at least 150 GW of offshore wind in the North Sea before 2050. The joint declaration sets a combined target for total offshore wind capacity of at least 65 GW by 2030, increasing to at least 150 GW by 2050. Parliament will negotiate agriculture’s contribution to the green transition in late 2023.

Denmark is perceived as the least corrupt country in the world according to the 2022 Corruption Perceptions Index by Transparency International, which has local representation in Denmark. The Ministry of Justice is responsible for combating corruption, which is covered under the Danish Penal Code. Penalties for violations range from fines to imprisonment of up to four years for a private individual’s involvement and up to six years for a public employee’s involvement. Since 1998, Danish businesses cannot claim a tax deduction for the cost of bribes paid to officials abroad.

Denmark is a signatory to the OECD Convention on Combating Bribery, the UN Anticorruption Convention, and a participating member of the OECD Working Group on Bribery. In the Working Group’s 2023 Phase 4 monitoring report on Denmark, the Working Group acknowledged Denmark’s efforts to implement the Convention and related instruments, but reported that Denmark gives insufficient priority to preventing, detecting, and sanctioning foreign bribery.

Resources to Report Corruption

Contact at the government agency or agencies that are responsible for combating corruption:

The Danish State Prosecutor for Serious Economic and International Crime
Kampmannsgade, 11604 København V
Phone: +45 72 68 90 00
Fax: +45 45 15 01 19

The Danish MFAs anti-corruption policy is available here: 

To report any knowledge of corruption within Danish Ministry of Foreign Affairs development assistance agency DANIDA projects or among staff, or DANIDA partners: 

Contact at a “watchdog” organization:

Transparency International Danmark/
c/o CBSDalgas Have 15,
2. sal, lokale V.2.352000 Frederiksberg

Denmark is a politically stable country. Incidents involving politically motivated damage to projects or installations are very rare. The EIU rates Denmark “AAA” for political risk as of February 2023.

The Danish labor force is generally well-educated and efficient. English-language skills are good, and English is considered a natural second language among a very high proportion of Danes. The labor market is stable and flexible. U.S. companies operating in Denmark have indicated that Danish rules on hiring and firing employees generally enable employers to adjust the workforce quickly to changing market conditions.

The Danish labor force totaled approximately 3.12 million people at the end of 2022. Approximately 32 percent are employed in the public sector, which includes education and health services. Denmark’s OECD-harmonized unemployment rate was 5.2 percent in February 2023, lower than the EU-27’s average rate of 6.0 percent but above the OECD average of 4.84 percent. Denmark faces labor shortages in certain sectors, which may be abated by the projected slowdown in growth but may otherwise present a challenge for foreign investors.

The labor force participation rate is among the highest in the world. In Q4 2022, 80.6 percent of working-age population participated in the labor force, and the employment rate was 76.7. percent.

The Danish labor force is highly organized, with a trade union density of 66.2 percent of wage earners belonging to a union in 2021, the second highest in the OECD. Labor disputes and strikes occur only sporadically. In general, private sector labor/management relations are excellent, based on dialogue and consensus rather than confrontation. Working conditions are established through a complex system of legislation and organizational agreements, where most aspects of wage and working conditions are determined through collective bargaining rather than legislation.

The contractual work week for most wage earners is 37.5 hours. By law, employees are entitled to five weeks of paid annual leave. In practice, most of the labor force has the right to six weeks of paid annual leave, gained through labor market accords.

Denmark has well-functioning unemployment insurance and sick-pay schemes, self-financed or financed by the state. Employees have a right to take maternity or paternity leave, which in Denmark is a total of 52 weeks. As a general rule, each parent is entitled to 24 weeks of leave after birth with maternity/paternity benefits if the parents live together when the child is born. For a salaried employee, up to 13 weeks of the leave can be transferred to the other parent. The mother may in general take: pregnancy leave four weeks before the expected date of birth, ten weeks of leave immediately after the birth of the child, and the remaining 14 weeks of leave before the child is one year old. The father or co-mother may take: two weeks of leave after the birth and 22 weeks of leave before the child is one year old.

Danish wages are high by international standards and have prompted the use of capital-intensive technologies in many sectors. Some investors report that the high average wage level is detrimental to Danish competitiveness. Although high wages and generous benefits, including time off, reduce competitiveness, high productivity and low direct costs to employers can result in per employee costs that are lower than in other industrialized countries. Real wages increased on average by 3.6 percent from 2021 to 2022. The general labor accord that was finalized in spring 2023 resulted in higher wage increases in 2023 and 2024 of at least 4 percent annually.

Generally, personal income tax rates in Denmark are among the highest in the world. However, foreign employees making more than an amount specified annually by the Danish Immigration Service and certain researchers may choose to be subject to a 27 percent income tax rate, plus a labor market contribution tax amounting to 32.84 percent income tax in the first seven years of working in Denmark. Certain conditions must be fulfilled for key employees to be eligible for the 27 percent tax rate: for example, since January 1, 2023, wages must total at least $10,200 (DKK 72,500) per month before the deduction of labor market contributions and after Danish labor market supplementary pension contributions. There are also limits based on an individual’s previous work history in the Danish labor market. Compared with the general Danish progressive income tax system, this is an attractive incentive. Further information can be obtained from Danish embassies or from the Danish Immigration Service ( ).

Danish work permits are not required for citizens of EU countries. U.S. companies have reported that in general, work permits for foreign managerial staff may be readily obtained. However, permits for non-managerial workers from countries outside the EU and the Nordic countries are granted only if substantial professional or labor-related conditions warrant. Special rules detailed by the Danish Immigration Service in its “Positive List Scheme” apply to certain professional fields experiencing a shortage of qualified manpower. The list is updated twice annually. Foreigners who have been hired in the designated fields will be immediately eligible for residence and work permits. The minimum educational level required for a position on the Positive List is an occupational Bachelor’s degree, a series of education usually 3.5 years in length combining theoretical and practical experience. In some cases, a Danish authorization must be obtained, which the Positive List will explicitly state if applicable (e.g., non-Danish trained doctors must be authorized by the Danish Patient Safety Authority). Professions covered by the Positive List Scheme include engineers, scientists, doctors, nurses, IT specialists, marine biologists, lawyers, accountants and a wide range of other master’s or bachelor’s degree positions.

Persons who have been offered a highly paid job have particularly easy access to the Danish labor market through the Pay Limit Scheme. As of 2023, the Pay Limit Scheme extends to positions with an annual pay of no less than $65,700 (DKK 465,000), regardless of the field or specific nature of the job. The length of work and residence permits granted under the Pay Limit Scheme depend on the length of the employment contract in Denmark. For permanent employment contracts, work permits are granted for an initial period of four years. After this period, the permit can be extended if the same job is held. There are several other schemes meant to make it easier for certified companies to bring employees with special skills or qualifications to Denmark. These schemes vary in duration and requirements.

Danish immigration law also allows issuance of residency permits of up to 18 months’ duration based on an individual evaluation, using a point system based on education, language skills, and adaptability.

Denmark has ratified all eight ILO Core Conventions and been an ILO member since 1919.

As a high-income country, Denmark does not generally qualify for DFC support for projects. However, the European Energy Security and Diversification Act of 2019 authorizes DFC to support certain energy-related investments in eligible European and Eurasian high-income countries and areas, including certain countries where DFC would otherwise not be able to operate. Please see: 

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Host Country Statistical source* USG or international statistical source USG or International Source of Data:
BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) ($ USD) 2021 $398.0 billion 2021 $398.3 billion
Foreign Direct Investment Host Country Statistical source* USG or international statistical source USG or international Source of data:
BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country ($M USD, stock positions) 2021 $24.2 billion 2021 $16.4 billion BEA data available at
Host country’s FDI in the United States ($M USD, stock positions) 2021 $57.3 billion 2021 $34.6 billion BEA data available at
Total inbound stock of FDI as % host GDP 2021 $233.2 billion 59.9% 21 $154.2 billion / 38.7% UNCTAD data available at

* Source for Host Country Data: Statbank of Statistics Denmark and Statbank of Denmark’s National Bank (Central Bank)  

Table 3: Sources and Destination of FDI
Direct Investment from/in Counterpart Economy Data 2021
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward 146,591 100% Total Outward 277,845 100%
Sweden 22,592 15.4% UK 42,807 15.4%
UK 17,367 11.8% United States 39,199 14.1%
Norway 16,631 11.3% Sweden 33,950 12.2%
Netherlands 16,119 11.0% Germany 24,774 8.9%
Luxembourg 15,486 10.6% Singapore 18,330 6.6%
“0” reflects amounts rounded to +/- USD 500,000.

Kristen Stolt
Economic Officer
U.S. Embassy Denmark
Dag Hammarskjölds Alle 24,
2100 Copenhagen, Denmark


The Faroe Islands have an open economy and multiple trade agreements with other countries. The Government of the Faroe Islands retains control over most internal affairs, including the conservation and management of living marine resources within the 200 nautical mile fisheries zone, natural resources, financial regulation and supervision, and transport. Denmark continues to exercise control over foreign affairs, security, and defense, in consultation with the Faroese government.

For more than two centuries, the Faroese economy has relied on fisheries and related industries. Fisheries (including agriculture, hunting, and forestry) account for 22 percent of the Faroe Islands’ domestic factor income. About 92 percent of goods exports are fish products. Salmon alone accounts for 44.5 percent of goods exports. As a non-EU member, the Faroe Islands had open access to the Russian market post-2014, despite Russia’s retaliatory trade embargo on certain food imports from the EU. This allowed the Faroese to sell increased quantities of salmon to the Russian market at a premium even while prices dropped significantly in the European market. The Faroese government announced in February 2022 that it supports Western sanctions against Russia in the wake of its invasion of Ukraine and the major Faroese fishing companies voluntarily withdrew from exporting to the Russian market. In May 2022, the Faroese parliament passed legislation to enable it to implement sanctions against Russia and Belarus. In November 2022, the Faroe Islands renewed its bilateral fisheries agreement with Russia for 2023.

The Faroe Islands exported $1.79 billion (DKK 12.7 billion) worth of goods in 2022, 92 percent of which were fish products, with the remainder being unspecified goods, marine vessels, and aircraft resales. In recent years, construction, transportation, banking, and other financial services sectors have grown. In 2022, the top destination for goods exports was the United Kingdom (14.3 percent), followed by Denmark (13.3 percent), the United States (13.0 percent), and Russia (8.0 percent). Goods imports totaled $1.71 billion (DKK 12.1 billion) in 2022, with the vast majority from Europe. Of total Faroes’ goods imports, 22.9 percent came from Denmark, followed by the Netherlands (13.5 percent), Norway (12.4 percent), Germany (8.6 percent), and China (6.1 percent). Direct imports from the United States were 1.0 percent of total imports. Major import categories were inputs to industry (2.4 percent), fuels (18.7 percent), household consumption (16.4 percent), and vessels and aircraft (10.0 percent).

Official statistics list 2021 as the most recent year available for GDP figures, at $3.24 billion (DKK 22.9 billion). According to Statistics Faroe Islands, real GDP rose 5.6 percent in 2021, contracted by –2.6 percent in 2020, mainly due to COVID-19 and related price effects on fish prices, and grew by 5.0 percent in 2019. The average real growth rate from 2012 to 2021 was 3.5 percent. According to the Danish Central Bank, the strongest underlying drivers for recent years’ growth are substantial price increases for farmed salmon and larger catches of mackerel and herring in particular, combined with considerable productivity gains. Activity has been concentrated in fewer farms and shipping companies, both in aquaculture and in the pelagic fisheries, making these industries more profitable. These factors have boosted incomes and led to higher private and public sector demand. Like the rest of the world, consumer prices have risen sharply in the Faroe Islands. Since spring of 2021, the development in the consumer price index has accelerated and was 10.1 percent higher in November 2022 compared to November 2021. The average annual inflation for 2022 was 7.7 percent. The Faroe Islands’ small, open, but non-diversified economy makes it vulnerable to changes in international markets. The Faroe Islands have full autonomy to set tax rates and fees, and to set levels of spending on the services they provide. Denmark provides an annual block grant indexed to Danish inflation. In 2022 the block grant was $90.6 million (DKK 641.8 million).

In the longer term, the aging Faroese population will weaken the sustainability of public finances, according to a 2015 report from the Economic Council for the Faroe Islands. The Council suggests that in order to maintain the high level of service to citizens established over many years, the Faroese government must prioritize this issue in due course. Currently, according to the Danish Central Bank, the ratio of working people to children and seniors is 60 percent, i.e. there are ten people of working age (16 to 66), to six persons aged below 15 or 67 and older. By 2030, the Central Bank estimates this will increase to 70 percent and by 2050 to 90 percent. The Council estimated that a permanent fiscal improvement of 5 percent of GDP is required to stabilize government debt, which is currently at a low level. In October 2022, credit agency Moody’s maintained its Aa2 long-term issuer rating of the Government of the Faroe Islands which it has held since 2019. The Aa2 rating is the third-highest rating on Moody’s 21-tier scale. The outlook remains stable and Moody’s concludes that the Faroe Islands has a healthy degree of financial independence and a low level of refinancing risk. Moody’s assesses the stable and historical relationship with Denmark as an additional strength, but indicated a higher rating would require the Faroe Islands to diversify its economy to be less reliant on the fisheries sector.

The Faroe Islands opened its own securities exchange in 2000; active trading of shares followed in 2005. The exchange is a collaboration with the VMF Icelandic exchange on the Nasdaq OMX Nordic Exchange Iceland.

There was no new foreign direct investment (FDI) into the Faroe Islands in 2021. Outward FDI was $4.3 million (DKK 30.6 million). The Faroese government has indicated an interest in attracting further foreign investment. “Invest in the Faroes” is the Faroese government unit promoting Faroese trade. The website is .

The Faroe Islands have over the years engaged in several disputes with the EU over fishing quotas, so far culminating with the EU adopting measures that allowed it to impose sanctions on the Faroe Islands in 2012. In March 2013, the Faroe Islands unilaterally increased its quota for herring and mackerel. EU member states responded by voting in favor of imposing sanctions, which went into force in August 2013. The EU lifted sanctions in 2014 after reaching a political understanding with the Faroe Islands on herring catches. Subsequently, the Faroe Islands and the other coastal states in the North Atlantic signed a five-year agreement on mackerel quotas, reducing uncertainty for fisheries and improving profitability since the agreement allows for more sustainable harvesting. The Faroe Islands negotiates reciprocal exchanges of fishing opportunities with the EU, Norway, Russia and the United Kingdom annually.

Employment has risen notably, and the labor market participation rate is high at 84 percent, which has pushed down unemployment from 7 percent in 2011 to record lows. The unemployment rate was down to 233 full-time unemployed persons, equal to 0.8 percent of the labor force, in March 2023. The labor force comprised 32,855 people in 2022. The need for labor has increasingly been met via high net immigration, which has prolonged the economic upswing. According to the Danish Central Bank, all industries are experiencing labor shortages. The many new inhabitants along with rising disposable income, however, have put the housing market under pressure, especially in and around the capital Tórshavn. In many areas, the Faroese labor market model resembles other Nordic countries, with high standards of living, well-established welfare schemes, and independent labor unions. Most people in the Faroe Islands are bilingual or multilingual, with Danish and English being the most widely spoken languages after Faroese. The Faroe Islands boast well-developed physical and telecommunications infrastructure and have well-established political, legal, and social structures. The standard of living for the population of 54,303 (which exceeded 50,000 for the first time in May 2017) is high by world standards, with GDP per capita in 2021 of $68,500 (DKK 431,000) just above that of Denmark’s $67,550 (DKK 425,000).

Contact for more information on the Faroe Islands:

Kristen Stolt
Economic OfficerU.S. Embassy DenmarkDag Hammarskjölds Alle, 242100 Copenhagen, DenmarkEmail: 


The Greenlandic government is exploring ways to increase trade and diversify its international relationships for sustainable economic growth with a notable interest in climate-forward, green solutions.

Greenland is a self-governing area within the Kingdom of Denmark, yet it is not an EU member. Greenland originally joined the EU with Denmark in 1973 but left in 1985 and is today one of the EU’s Overseas Countries and Territories (OCTs). Greenland’s status within the Kingdom of Denmark is outlined in the Self Rule Act (SRA) of 2009, which details the Greenlandic government’s right to assume in the future a number of additional responsibilities from the Danish government, including the administration of justice, labor, aviation, immigration and border control, and financial regulation and supervision. Before 2009, Greenland had already acquired control over taxation, fisheries, internal labor negotiations, natural resources, and oversight of offshore labor, environment, and safety regulations. Denmark continues to have control over foreign affairs, security, and defense policy, in consultation with Greenland and the Faroe Islands. Denmark also retains authority over border control issues, including immigration into Greenland.

Two-thirds of Greenland lies above the Arctic Circle, and its northern tip is less than 500 miles from the North Pole. Greenland can be reached by air or freighter from Denmark or Iceland, and with approximately 60 kilometers of road, connections between towns are also via air and sea. There are currently no direct commercial flights with the United States, but construction is underway to open two new international airports in prime locations on the west coast of Greenland in 2024.

Greenland’s GDP was estimated at $3.12 billion (DKK 20.37 billion) in 2021. The annual block grant Denmark provides to Greenland is indexed to inflation and accounts for about half of the Greenlandic government’s revenue. In 2022, this grant was $565 million (DKK 4.0 billion), approximately 20 percent of GDP.

The public sector accounts for 60 percent of jobs, including national and local governments, social service providers like schools and hospitals, and state-owned enterprises that comprise the telecommunication, power, and transportation sectors.

Fishing is Greenland’s single most important commercial industry, accounting for 98 percent of exports in 2022. The sector is dominated by two companies, the Government of Greenland-owned Royal Greenland and the privately-owned Polar Seafood. The vast majority of Greenlandic exports and imports pass through Denmark to and from the rest of the world but are reported as trade between the two. Greenland imports goods from all over the world, primarily through Denmark, and to a lesser extent, via Iceland. Royal Greenland’s largest country market is China, and one-third of its revenues are generated in Asia, half in Europe, and 10 percent in North America, which the company views as a growth market. Polar Seafood has its main markets in Scandinavia, China, and Japan. The government is promoting the development of tourism and the extractive minerals sector, as well as hydropower projects. The government anticipates launching tenders for two large hydropower and associated off-take projects later in 2023. Greenland has large deposits of critical minerals and rare earth elements. Greenland owns and has disposal rights over all mineral resources, including oil and gas resources. The Greenlandic government announced in July 2021 its decision to cease issuing licenses for hydrocarbon exploration.

The Greenlandic government seeks to increase economic growth and government revenues by promoting the further development of fisheries, extractive resources, renewable energy production, and tourism while periodically trimming the public sector through privatization of enterprises currently owned by the government. Key initiatives include improving access to and localizing financing for new businesses and enhancing Greenland’s corporate tax competitiveness. Over the past decade, rising prices for fish and shellfish, the predominant Greenlandic exports, have generated solid earnings for large parts of the fisheries sector, though they were negatively impacted by COVID-19 border closures in China. The Greenlandic government directed state-owned enterprises to stop trading with Russia in February 2022 and announced its intent to join EU sanctions against Russia. The Greenlandic parliament adopted legislation in May 2022 providing the framework for the government to impose sanctions against Russia.

To meet anticipated demand, the Government of Greenland has extensive plans to improve infrastructure. The capital Nuuk (population 19,700) is growing in large part through economic migration from within the country. The government is expanding the airport to accommodate direct international flights, has a multilingual workforce, an active shipping and cruise port, and additional planned investments in roads, housing, and port expansion. The government is improving access to Greenland’s primary tourist destination Ilulissat (population 4,850) through an airport expansion. Additionally, the Government of Greenland is planning a new airport in Qaqortoq, the municipal seat of South Greenland, with plans for additional infrastructure improvements as well. Lastly Sisimiut, the second-largest town (population 5,440) in Greenland, is home to Greenland’s northernmost port that remains ice free year-round. Private partnerships are underway to expand adventure tourism from the shoreline to the polar ice cap and to increase access to the area’s UNESCO World Heritage Site. Other efforts to develop tourism include increases in hotel capacity and a focus on promoting foreign language education to create a more multilingual workforce. The government is calling for stricter safety requirements for navigation in Greenlandic waters.

Greenland offers world-class deposits of rare earths and critical minerals. In the mineral extractives sector, one anorthosite mine is in production. The government granted a company an exploitation license to restart a gold mine in southern Greenland. The Dundas ilmenite project is actively being developed, while an Australia-based company is working to develop one of the world’s largest zinc deposits located in northeast Greenland. Two small Australia-based companies are seeking to extract rare earth elements in South Greenland. The resources in both of these projects are globally significant; each would rank in the top five worldwide if they were developed. One of the projects, Kringlerne, received an exploitation license in late 2020. In the other, the developer of the Kvanefjeld project has requested arbitration proceedings in its dispute with the Government of Greenland and the Government of the Kingdom of Denmark following Greenland’s passage of a law in November 2021 banning mining of minerals containing more than 100 parts per million (ppm) of uranium, a limit which exploitation of the rare earth elements in Kvanefjeld would exceed. Additional exploration efforts are underway for minerals such as graphite.

Greenlandic Economic Outlook

Greenland is experiencing an economic boom with an increased demand for foreign labor and resources. The infrastructure investments in airports and harbors are creating increased activity, and the tourism sector is experiencing a strong comeback since COVID-19 lockdowns in 2020 and 2021. The Greenlandic Economic Council (GEC) – an independent advisory council – expects the economic prosperity driven by a lucrative market for the fisheries industry to continue in the coming years. A strong economy in recent years has led to labor shortages, both geographically and by sector, especially in connection with large construction projects. Unemployment has declined from about 10 percent in 2014 to 3.7 percent in 2021. Currently, 70 percent of all available jobs are in the capital Nuuk, and 90 percent of all available jobs are in just three locations: Nuuk (in which a third of the population resides), Sisimiut, and Pituffik Space Base (re-named from Thule Air Force Base in April 2023). The GEC estimated that real GDP grew on average by 0.92 percent annually from 2017 to 2021. The GEC forecast real growth to reach 1.8 percent for 2022 and 0.8 percent for 2023. Unlike the rest of the world, inflation did not increase dramatically in Greenland in 2022. This is due to long-term contracts for oil, which is the predominant source of energy after hydropower. The GEC estimated that inflation will increase from 2.2 percent in 2022 to 5 percent in 2023.

The Greenlandic parliament (“Inatsisartut”) and the Government of Greenland (“Naalakkersuisut”) adopted a Budget Act in 2016, which mandates that the budget cannot be in deficit on average over four contiguous years. The public budget ran surpluses from 2015 to 2019, but the COVID pandemic resulted in a deficit in 2020 and 2021. The budget also exhibited a deficit in 2022 and the government’s 2023 budget act estimates deficits in 2023 and 2024 to be followed by surpluses in 2025 and 2026. The deficits are partially due to large public expenditures in connection with construction activities such as the airports. Public consumption in Greenland was 44.7 percent of GDP in 2020, compared to 24.7 percent in Denmark.

The government, municipalities, and government-owned enterprises had a gross debt of approximately 27 percent of GDP in 2021 of $890 million (DKK 5.6 billion). The debt is projected to increase by an additional $425 million (DKK 3 billion) by 2024 due to large public construction projects. The GEC reported initially in 2017 that “projections for the public finances show a major sustainability problem.” The GEC has reaffirmed that finding in subsequent reports. The GEC has warned about the effects of increasing public expenditures as larger portions of the population age into retirement, resulting in fewer wage earners in the labor market. The GEC has also noted that a realistic plan to close the gap between expected expenditures and revenues could require the Greenlandic government to cut social spending, raise the retirement age, and increase vocational education and training. For Greenland to become a more self-sufficient economy, the GEC asserted that the extractive and tourism sectors would need further development. The GEC noted that Greenland has not sufficiently addressed its sustainability challenges and estimated that the public budget would need to be reinforced by $159 million (DKK 1 billion) annually by 2040 to accommodate the aging population.

The tourism and travel industries bore the brunt of the negative impacts of the COVID pandemic, as lockdowns in Greenland and travel restrictions in other countries effectively wiped out the 2020 and 2021 tourism seasons in Greenland. Cruise ship reservations for 2023 however, are the highest numbers Greenland has ever seen, with 711 calls to Greenland’s ports expected for the summer season. The cruise industry is not reported to yield a significant economic benefit for local businesses, so Greenland is focusing efforts on more eco-adventure travel and related investments to increase tourism revenues.

Greenland’s vast geographic expanse and Arctic climate prevent interconnected physical and telecommunications infrastructure. Greenland has adapted by developing localized and sometimes regional solutions for water, power, and telecommunications, which has opened the door for a variety of micro, small-, and large-scale solutions, and a combination of low- and hi-tech solutions. Greenland’s government-owned telecommunications company predominantly uses Ericsson equipment and announced that it would continue to do so for future upgrades, including 5G. Major ports are multi-purpose, nearing capacity in some cases in order to accommodate freight, industry, local fishermen, and cruise lines.

Establishing a Company in Greenland

Information on establishing a business in Greenland can be found on
Danish business (CVR) registration through is required to conduct business in Greenland. Furthermore, companies planning to have employees must register as an employer with the employer register Sulinal: . Foreign companies may start their businesses in Greenland either through a subsidiary (both ApS and A/S type companies) or via a registered branch office.

ApS and A/S

An ApS (private limited company) or A/S (public limited company) is a separate legal entity with limited liability for its shareholders. The main difference between a private (ApS) and a public (A/S) limited company is that the shares of a private limited company cannot be issued publicly. Therefore, an ApS cannot be subject to listing or otherwise issue shares to the public to secure more capital. In addition, there are a few differences concerning capital and management requirements. Under the Companies Act, the minimum share capital requirement for an ApS is $5,650 (DKK 40,000). The minimum share capital requirement for an A/S is $56,500 (DKK 400,000). However, under the Danish Companies Act, it is possible to incorporate an A/S and only pay 25 percent of this amount (i.e., $14,125 (DKK 100,000)), leaving the company with a receivable on the shareholders for the outstanding amount (i.e., $42,375 (DKK 300,000)). A founder of a company may be foreign or Greenlandic individuals or corporate entities. Both ApS and A/S companies can be registered via the Danish Business Authority’s (DBA) online system. No registration fees are required.

Registered Branch Office

A foreign company may typically establish a registered branch office in Greenland instead of establishing a Greenlandic company. A branch of a foreign company may be created through an application with the DBA. Companies within the EU and European Economic Area (EEA) may set up a branch in Greenland and Denmark without further approval from the DBA. However, companies outside of the EU/EEA must obtain approval before registering.

A foreign company can do business in Greenland in a consecutive or non-consecutive 90-day period over 12 months without being required to register as a business.

Greenland Tax

The Greenlandic tax system is based on flat-rate taxation of business profits for both resident and non-resident corporations. Greenland operates with a net income principle, where the taxable income is calculated as a total net amount after deductions. The net income principle means that all income is treated equally, regardless of whether the income comes from employment, self-employment, investment income, or pensions, etc. As the rules of taxation for businesses can be complicated, potential investors may seek to retain guidance from the Greenlandic Tax Agency ( ) or professional consultants.

Greenland has double taxation agreements with Denmark, the Faroe Islands, Iceland, Norway, Canada, the United States, Cayman Islands, Isle of Man, Bermuda, Jersey, and Guernsey. Greenland signed a Foreign Account Tax Compliance Act (FATCA) agreement with the United States.

The corporate income tax rate is 25 percent; an additional surcharge of 6 percent of the tax payable brings the total corporate tax rate to 26.5 percent.

The taxation of royalty payments is 30 percent. Greenland has no value-added tax (VAT) system, property tax, sales tax, or similar taxes. There are, however, some payable duties, such as taxes for cruise liners, ports duties, etc. There are four types of depreciation in the Greenlandic tax law. Buildings can be depreciated 5 percent annually. Ships, planes, and hydrocarbon prospecting can be depreciated 10 percent annually. Mineral licenses can be depreciated 25 percent each year for four years, and operating equipment can be depreciated at a rate of 30 percent annually. Assets with a cost of less than $14,125 (DKK 100,000) may be depreciated in the year of acquisition.

Greenlandic permanent establishments of foreign companies are taxed under the same rules and rates as Greenlandic resident companies. There is no branch profits remittance tax or other similar tax on branch profits. If a foreign company has more than one location or permanent establishment in Greenland, these are treated as separate taxable entities with no possibility of consolidation.

Greenland Labor

The Greenlandic labor force was 28,933 persons in 2021. Average unemployment for 2021 was 3.7 percent according to Statistics Greenland. Unemployment has decreased significantly, especially in Nuuk. According to Statistics Greenland, 57.3 percent of the Greenlandic population age 16 and above had an education beyond primary school in 2021. Of these, 20.3 percent had vocational education, while 13.6 percent had some form of tertiary education. The official language of Greenland is Greenlandic. Residents of Greenland may speak Greenlandic, Danish, or both. English is not widely spoken in Greenland, although its usage is growing among professionals working in international contexts and as English is now part of compulsory education.

In December 2012, Greenland passed legislation known as the “Large Scale Act,” which allows companies to use foreign labor during the construction phase of development when project costs exceed $706 million (DKK 5 billion) and workforce requirements exceed the local labor supply. The Act is intended for potential mining or infrastructure projects in Greenland. The Act lays out the framework for politically negotiated Impact Benefit Agreements (IBA) for the Government of Greenland and the employer to agree on the exact conditions of employment for foreign labor. The scale of Greenlandic labor utilized will be negotiated for each project and will vary depending on local capacity and the negotiated agreement for each project.

Foreign workers enjoy the same legal protections as Greenlandic workers, including the same $14.7 (DKK 103.83) per hour minimum wage and retention of the right to strike.

In 2021, Greenland implemented the Fast Track Scheme. This arrangement allows businesses in industries facing labor shortages to hire foreign workers who can begin working before they are approved for a work permit.

Investment in Natural Resources

Greenland possesses sizable discovered and undiscovered mineral resource potential. Some deposits are among the largest in the world. The country’s resources include iron and ferroalloys (iron, nickel, molybdenum, tungsten, and others), base metals (copper, zinc, and lead), specialty metals (rare earth elements, uranium, niobium, tantalum, and others), precious metals (platinum, gold, and others), and gemstones (diamonds, rubies, and sapphires). Mining industry experts anticipate that Greenland’s retreating ice will make the island’s rich stores of raw materials more easily accessible. However, exploration and exploitation projects will still face higher costs because of remote locations, lack of infrastructure, harsh climate, and distance to world markets. In 2021 the government implemented a limit of 100 ppm for uranium collocated with these deposits and granted the government authority to ban or limit mineral resource extraction for other types of radioactive elements.

With the 2009 SRA, Greenland gained rights to its mineral and hydrocarbon resources, and it acquired the regulatory authority over these on January 1, 2010. The SRA also created a revenue mechanism: if Greenland’s natural resources’ exploitation becomes commercially viable, Greenland will keep the first $10.6 million (DKK 75 million) in annual revenues derived from these resources. Additional revenues will be split equally between the Danish and Greenlandic governments. Denmark’s share will be transferred by deducting the equivalent amount from the annual block grant to Greenland of $565 million (DKK 4.0 billion). Once the block grant’s total value is reached, any additional revenue will be subject to negotiations between the Danish and Greenlandic governments.

Most of Greenland’s identified rare earth deposits are licensed by the Mineral License and Safety Authority, and some have reached advanced stages of exploration. In 2021, Greenland dropped significantly in the Canadian Fraser Institute’s Investment Attractiveness Index from 41st out of 77 jurisdictions to 61st of 84 jurisdictions. The survey highlighted the ban on exploration and production of uranium, political instability, and the lack of qualified officials as creating uncertainty for investors. In 2022, Greenland was dropped from the index.

Greenland General Business Information

The Department of Foreign Affairs, Business and Trade’s website – – helps foreign companies search for information about trade with and investment in Greenland. The website contains relevant information for companies, such as requirements and regulations for import and export between Greenland and the United States. There are descriptions of the various sectors in Greenland such as fishing, raw materials and mining, tourism, ice and water, and research. Information from the Greenlandic government on natural resource exploration and extraction can be found at . Information about doing business in Greenland can be found at . Statistics on Greenland can be found at .

In Greenland it is not possible to acquire private ownership of land, but a right of use may be sold for an area, i.e. if you buy property, you own the building, not the land on which it sits.
By law, private property can only be expropriated for public purposes in areas where the Greenlandic government has the competencies, in a non-discriminatory manner, and with reasonable compensation. There have been no recent expropriations of significance in Greenland.

There have been no significant disputes over foreign investment in Greenland in recent years, however, in March 2022, Australia-based Greenland Minerals requested arbitration in its dispute with the Governments of Greenland and the Kingdom of Denmark over the future of its Kvanefjeld rare earths project. While it is common that disputes are settled in Greenlandic courts, the Danish Supreme Court remains the highest appeals court for disputes in Greenland. If a dispute is very specialized and within the purview of the Danish Administration of Justice Act, the parties involved can choose the Danish Maritime and Commercial Court as a court of first instance.

While Greenland’s democratic institutions and legal framework in general are strong, there have been some concerns about legislation being passed by parliament without significant hearing processes and public input.

Contact for more information on Greenland:

U.S. Consulate Nuuk, Greenland

On This Page

  2. Openness To, and Restrictions Upon, Foreign Investment
    1. Policies Toward Foreign Direct Investment
    2. Limits on Foreign Control and Right to Private Ownership and Establishment
    3. Other Investment Policy Reviews
    4. Business Facilitation
    5. Outward Investment
  3. 2. Bilateral Investment and Taxation Treaties
  4. 3. Legal Regime
    1. Transparency of the Regulatory System
    2. International Regulatory Considerations
    3. Legal System and Judicial Independence
    4. Laws and Regulations on Foreign Direct Investment
    5. Competition and Antitrust Laws
    6. Expropriation and Compensation
    7. Dispute Settlement
      1. ICSID Convention and New York Convention
      2. Investor-State Dispute Settlement
      3. International Commercial Arbitration and Foreign Courts
    8. Bankruptcy Regulations
  5. 4. Industrial Policies
    1. Investment Incentives
    2. Foreign Trade Zones/Free Ports/Trade Facilitation
    3. Performance and Data Localization Requirements
  6. 5. Protection of Property Rights
    1. Real Property
    2. Intellectual Property Rights
  7. 6. Financial Sector
    1. Capital Markets and Portfolio Investment
    2. Money and Banking System
    3. Foreign Exchange and Remittances
      1. Foreign Exchange
      2. Remittance Policies
    4. Sovereign Wealth Funds
  8. 7. State-Owned Enterprises
    1. Privatization Program
  9. 8. Responsible Business Conduct
  10. Additional Resources
    1. Climate Issues
  11. 9. Corruption
    1. Resources to Report Corruption
  12. 10. Political and Security Environment
  13. 11. Labor Policies and Practices
  14. 12. U.S. International Development Finance Corporation (DFC), and Other Investment Insurance or Development Finance Programs
  15. 13. Foreign Direct Investment Statistics
  16. 14. Contact for More Information
  17. Other Areas in the Kingdom of Denmark
    3. Greenlandic Economic Outlook
    4. Establishing a Company in Greenland
      1. ApS and A/S
      2. Registered Branch Office
    5. Greenland Tax
    6. Greenland Labor
    7. Investment in Natural Resources
    8. Greenland General Business Information
2023 Investment Climate Statements: Denmark
Build a Custom Report

01 / Select a Year

02 / Select Sections

03 / Select Countries You can add more than one country or area.

U.S. Department of State

The Lessons of 1989: Freedom and Our Future