Denmark is a wealthy nation, with an open economy and sophisticated buyers that are well-known for paying bills and invoices on time – a major plus point for any business that relies on prompt payments.
Also known for being the gateway to Scandinavia and the Baltic nations, Denmark is the UK’s 22nd largest export market, with annual trade between the two countries estimated at some £5.7 billion.
So if you want to add Denmark to your list of export destinations, here’s all you need to know…
Doing business in Denmark is similar to doing business in the UK, so if you’ve got a winning business idea at home, there’s no reason it shouldn’t take off over there.
Around £2.5 billion worth of goods were exported to Denmark from the UK in 2013, and the main exports include:
- Animal products
- Fuels and related minerals
- Manufactured goods
The pros and cons of exporting to Denmark
The strengths of the Danish market include:
- easy access to northern Europe markets via Copenhagen hub airport and high quality motorway network
- well educated population with a high proportion of university graduates
- advanced telecommunication infrastructure
- takes only 24 hours to establish a company online
And if you’re thinking of exporting to Denmark, the advantages for UK business, are:
- prosperous economy
- gateway to the Scandinavian and Baltic countries
- close to growing economies of Germany, Sweden and Poland
- English widely spoken
And Denmark being a member of the EU means there are very few challenges to UK businesses and no significant trade barriers.
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Tax and customs
A double taxation agreement exists between the UK and Denmark, so tax isn’t paid twice – once in each country – on exported goods and services.
VAT is charged at a flat rate of 25% on all goods and services.
Income tax is charged at different rates depending upon a person’s income:
- Earnings between DKK 43 442 and DKK 479 600 aretaxed at 5.83%
- Income above DKK 479 600 is taxed an additional 15%.
Other taxes include Municipal income tax, which is between 23% and 28%, and a state tax, which is between 8% – 15%.
Corporation tax is charged at 22%, and a special tonnage tax applies to the shipping industry, and is an alternative to the normal corporate income tax regime for shipping companies resident in Denmark.
You can get more information of tax in Denmark at SKAT.
The internal EU single market allows for the free movement of goods and services without any import duties being applied, and testing is mandatory for some imported goods, especially technical and electrical equipment.