Copenhagen doesn’t immediately spring to mind as the ideal place for commercial relocation and development. But as a city with a growing reputation for sustainable living, an attractive quality of life and favourable government schemes for foreign businesses, perhaps it should feature higher up the list of potential expansion locations. Contributor Abi Bennett, Research Partner – Wilbury Stratton.

Wilbury Stratton recently completed several research projects to understand more about Copenhagen’s suitability as a hub for foreign business. This involved engaging with a wide variety of market sources including investment agencies, universities, local recruitment specialists, industry bodies and former and current employees of companies already established in the city. As a result, we identified an abundance of opportunity for both businesses and employees in the Danish capital.

Taking the lead in sustainable living
Sustainability is creeping up the commercial agenda. An organisation’s Corporate Social Responsibility credentials have a fundamental impact on consumer purchasing decisions, talent attraction and brand perception. So setting up operations in what has been hailed as ‘the greenest city in the world’ could be an ideal place to start rolling out some of those eco-friendly objectives.

One way Copenhagen is trying to live up to this title is through cutting the number of cars on the road. The aim is to reduce all car trips in the city to 25 percent by 2025 (2019 figures have this at 35 percent). Cycling is Denmark’s most popular method of commuter transport, with 62 percent of city commuters choosing it as their preferred method of transport. In 2016, there were more bikes recorded in the city than cars (265,700 compared to 252,600). Not only has this initiative ensured tangible benefits for the environment, it also contributes to a healthier, happier workforce. Commuters who cycle are, on average, 10 percent healthier than those who don’t. This affects the number of sick days employees take, resulting in multimillion-euro savings for employers each year.

The Danish government’s commitment to cut greenhouse emissions and maintain investment in green energy and a sustainable environment was frequently cited in our conversations as an appealing factor for those that live and work there.

Smart government initiatives
An enticing factor for setting up a local platform is that you can incorporate a Danish business in a matter of hours with no requirement for local shareholders or local resident management. With some of the lowest bureaucratic regulations for businesses in the world, Denmark has one of the simplest procedures for setting up commercial operations. It is an enterprise-focused country dedicated to attracting foreign interest.

A number of the policies that the government have put in place are well advertised and were regularly mentioned by our sources:

Denmark offers the world’s lowest employer costs. Employers pay less than one percent per employee per year in social contributions (maximum €1,350) – in Sweden this is 30 percent.

Hiring and firing can happen from one day to the next. Denmark has a flexible labour market, generous social security and an active labour market policy.

Future proposals have been designed to support foreign business investment. The new government plans to lower the minimum salary requirement for nationals of non-EU countries wishing to work in Denmark from DKK 427,000 (£42,246) per year to DKK 325,000 (£37,483) per year, with the intended outcome of helping companies to fill vacant positions.

Fostering industry growth
The technology/digital market in Denmark is experiencing between 10 and 20 percent year-on-year growth. This has been a controlled increase which has ensured that demand does not surpass available technology talent. Universities have been responsive to the growing demand for talent in the technology field and have received public funding to foster the growth of technology departments and the expansion of suitable courses. This level of solid, sustainable growth has also safeguarded against a dramatic inflation in wage demands across the sector; a key problem for businesses in other popular European ‘technology hubs’.

Rising and thriving industries in Copenhagen:

Digital/Tech/Fintech – Denmark is one of the most digital economies in the world – data expertise, IT connectivity and one of the highest levels of IT literacy all add to the location’s growing reputation as a technology hotspot. Fintech has a growing presence in Copenhagen with over 12,000 FTE in IT/financial businesses, making up around 13 percent of private employment. There is considerable headcount in areas like cyber security, process optimisation, investment software, usability and mobile banking technologies. The fintech industry also has a direct impact on the way of life in Denmark, with mobile payments services being highly utilised. A 2016 study by Citigroup found that 40 percent of people use cashless payments and this number has been increasing rapidly since.

Life Sciences – Denmark is well known for its R&D centres and drug development. The industry employs more than 47,000 people across biotech, medtech and academic research centres. Medicon Valley is a cluster of life-science businesses across Greater Copenhagen and Sweden with sectors in pharmacology, biotech, medtech and healthtech. Medicon Valley is home to nine life sciences universities which turn out over 5,000 PhD students every year. In 2018, Denmark was recognised as the best country in Europe for biotech research and development by the OECD.

Happy Inhabitants
Often referred to as ‘the Danish way of working’, employees in the country regularly highlighted the inherent local ethos which provides a near enough perfect work-life balance. Successful Danish businesses (and the local offices of foreign owned organisations) regularly offer flexible schedules and compressed working hours as an enhancement to an employee’s contract.

Marketed as ‘one of the most liveable cities’ where people feel happy and safe, it is not surprising that Copenhagen (and Denmark in general) is able to attract and retain professional talent. The high quality of life, growing opportunities, low rental market, free public services and an attractive tax scheme for foreign high earners makes Copenhagen an appealing place to work.

100 percent of our sources considered Copenhagen to be an attractive city to live and work in. Not only were native sources incredibly proud of the location, individuals that had moved to the city to work from elsewhere in Denmark or from an international location also felt that it provided a great balance and pace of life.