Tax Haven Denmark

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Tax haven Denmark’s financial sector became increasingly concentrated from the 1990s onwards due to the merging of the major banks operating in the country, which resulted in the formation of two main banking conglomerates or financial supermarkets by the Unibank and Danske Bank. The two most recent bank mergers in tax haven Denmark involved Nykredit and Totalkredit, meaning that there these entities are acquiring a greater share of the financial sector due to their size and the wide range of services and products they offer. The financial sector in tax haven Denmark is 4.8 times larger than the country’s gross nation product and employs about 55,000 people.

One of the factors contributing to financial services in Denmark is the intensive use of information technology, which increases then number of services that are provided, while facilitating home-based online transactions on the part of the customer.

Brief Country Overview

Tax haven Denmark is one of the Nordic countries in southern Europe, bordered by Germany as well as the Baltic and North Sea. As a tax haven Denmark has a free market capitalist economy and is considered as having the greatest level of income equality in the world.

Denmark is a member of the North Atlantic Treaty Organization (NATO) (or North Atlantic Alliance) as well as the European Union, which it joined since 1973, but has not become part of the Euro Zone in which the Euro is the currency used by member states which all belong to the European Union.

Tax haven Denmark is reported to have a GDP that is superior to that of most countries in Europe and about 15-20% more than the GDP of the US. The currency used in tax haven Denmark is the krone, which is de facto and tied to the Euro through the European Exchange Rate Mechanism.

Denmark Fiscal Advantages and Incentives

  • Economic stability
  • Qualified labour
  • Extensive network of double taxation agreements
  • Competitive costs
  • Flexible labour market
  • Tax benefits for foreign companies
  • Identified with best IT infrastructure
  • 2nd most peaceful country in the world
  • High quality public goods

Denmark Legislative Framework

Tax haven Denmark prides itself as a thoroughly regulated and transparent offshore jurisdiction. A series of acts and executive orders are legislated for the supervision and regulation of financial institutions and activities in Denmark as a tax haven. Some of these acts and legislative measures are as follows:

  • Consolidated Insurance Mediation Act
  • Act on Measures to Prevent Money Laundering and Financial Terrorism
  • Cross Border Currency Transfer Act
  • Consolidated Supervision of Company Pension Funds Act
  • Financial Business Act
  • Act on Financial Stability
  • Executive Order on Calculation of Risks by Hedge Associations
  • Executive Order on Good Business Practice for Financial Undertakings
  • Executive Order on Other Collective Investment Schemes

Denmark Offshore Financial Services

Tax haven Denmark introduced a new set of rules during the period 1998-8 for the set up of holding companies in an effort make Denmark a more attractive jurisdiction. Denmark provides some short- term opportunities for skilled workers and expat mangers for saving on taxes.

Though there are international banking, trust and investment offshore companies are not incorporated in Denmark. Foreign companies can however benefit from tax privileges. The types of foreign companies that can be registered in Denmark as a tax haven are the A/S, a Public Limited Company with a minimum paid capital of 500,000 DKK, the ApS or Limited Company (LTD) which has a minimum capital of 125,000 DKK and the K/S, a Limited Liability Partnership which has no paid capital. In all instances, the owners of these companies may be non-residents of Denmark, though a Denmark resident(s) may be required as a member of the company. As a tax haven, Denmark allows Limited Liability Partnerships not to pay taxes so long as business is conducted and money is earned outside of Denmark.

Danish Financial Supervisory Authority (FINANSTILSYNET)

Danish Financial Supervisory Authority of Denmark tax haven is a vigilant body that seeks to ensure the stability and progress of the financial sector, which is noted for its transparency, developed infrastructure and contribution to the society through various financial institutions that encourage investment broking and facilitate the flow of payments.

The Danish FSA is charged with the responsibility of regulating tax haven Denmark’s financial sector and forms part of the portfolio of the Minister for Economic and Business Affairs. The FSA also has the primary function of acting as a secretariat for two councils namely the Financial Business Council and the Danish Securities Council; and one panel namely the Money and Pension Panel. The FSA in tax haven Denmark is made up of an Executive Management comprising of 5 members, including fourteen divisions and various counsellors. The Danish FSA also has members acting as deputy director generals from the two divisions of managers. The Director General of the Danish FSA overlooks the Executive, ministers and councils and is responsible for strategically planning and distributing the necessary resources to the various divisions.

Recent Developments

In 2008, the Economist Intelligence Unit (EUI) Global Business Environment Rankings named Denmark the country with the best business environment in the world. The EUI stated that tax haven Denmark will hold that position for the period 2008-2012. Tax haven Denmark won the same title in 2007, which covered the five year period 2007-2011.

The EUI stated in a press release that “Denmark stands out for the successful balance that it appears to have struck between the state and market. Product markets operate efficiently and labour markets are flexible (with low non-wage labour costs and few restrictions on hiring and firing).”

Prime Minister Anders Fogh Rasmusses of tax haven Demark is now Secretary General of the North Atlantic Treaty Organisation (NATO). Lars Løkke Rasmussen became the new Prime Minister on April 5, 2009.

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