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November 2nd, 2012

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Although only one percent of businesses in Denmark are foreign-owned, they employ 20 percent of the private sector work force nationwide and account for close to 30 percent of total exports. But foreign investment in Denmark is at its lowest level since 2007.

In response, Pia Olsen Dyhr (Socialistisk Folkeparti), the trade and investment minister, and KL, the interest group and member authority for council governments, have presented recommendations in the form of a guidebook to councils for how to better cater to foreign companies.

“It’s important that all efforts are moving in the same direction. We need to become better at building competency clusters, quality research institutions and networks for foreigners across councils and regions,” Dyhr said. “It is imperative for attracting foreign companies to Denmark.”

International competition over foreign investment is stiff. Sweden and other northern European countries attract far more foreign-owned companies than Denmark has done in the past five years, largely because of Denmark’s high taxes and small market, according to KL.

But potential investors are attracted to the high level of welfare, education platform and quality infrastructure prevalent in Denmark, areas in which the councils play an important role. The guidebook, which has been developed by Invest in Denmark, a part of the Foreign Ministry, together with KL and three regional governments in western Denmark, will enable councils to be prepared to help interested companies establishing themselves in the area.

“Councils throughout Denmark offer great potential for the running of a company, creating attractive work environments and living conditions for families,” Carsten Kissmeyer, a KL member and the mayor of Ikast-Brande, said. “When it comes to attracting foreign companies, council governments have to think commercially and focus on what the 'customer' needs.”

While the foreign companies look set to receive a helping hand, there is still no news about whether local governments will adopt English in correspondence and application forms. However, Helle Eckeroth, a business and political consultant for KL, indicated that it is on its way.

“Council governments are already considering having English as a working language, as we have recommended,” Eckeroth said. “In terms of communication to the individual, the councils are currently transforming to a digital platform, and although they have decided to offer different languages in their communication in the future, they are still undecided which languages to use – whether it is English, Spanish, French, Farsi or other languages.”

Factfile | Recommendations from the guidebook for catering to foreign companies

– When communicating with international companies, councils should communicate clearly and in good English

– Denmark is often chosen due to the competencies, including language skills, of Danish employees

– All foreign companies focus on growth and profit, and can in principal move to another country or region. Focus on the needs of the company and not the council

– Respect the company’s time schedule and plan

– Only involve people that can contribute with relevant information to the company. A typical visitation programme requires many meetings with authorities, companies, experts and educational institutions. In some cases the correct person can mean a business director or a mayor, while in others professional expertise will do. Respect the company’s deadlines

– Keep all information confidential, unless agreed on otherwise

– Due to competition considerations or stock exchange rules, revealing a company visit to the council can spoil potential investment

– Patient and flexible councils are often rewarded with long-term investment to the benefit of employment and internationalisation

Read the full guidebook (in Danish only)