The annual ‘Business Barometer’ report by AmCham Denmark, the US chamber of commerce in Denmark, showed that despite continued private-sector investment in 2013, employment continued to stagnate.

At the same time over half of businesses have considered moving investments out of Denmark because the high cost of doing business here makes them less competitive.

“It is essential that we do something about the high costs if Denmark is to be able to attract investment. High taxes and fees play a considerable role in this, so the lowering of the corporate tax rates was a good start,” Stephen Brugger, the head of AmCham Denmark, said.

Fundamental changes needed

The report showed, however, that while lowering corporate tax rates would attract some investment, few companies would see significant benefits.

“It’s just a small step and it is something only few companies would be interested in. More fundamental initiatives are required for Denmark to become a seriously attractive place to invest,” Brugger said.

Foreign companies are concerned about the future in Denmark, according to the report, because they find the educational system to be average, at best, and many of the companies are under the impression that Denmark scores below average when it comes to attracting and retaining foreign talent.

Germany and Sweden more competitive
“When it comes to business conditions, ‘average’ simply doesn’t cut it. We have a small market that could easily be serviced from Sweden or Germany. If we are to attract investment, we need to be considerably better than the nations around us,” Brugger said.

The report (here in English) also illustrated that the majority of the survey respondents found Danish authorities difficult to work when it came to public procurement.

The annual report results are based on surveys of 103 international companies currently employing 64,000 people in Denmark. Twenty-five percent of the companies have their headquarters in Denmark, 67 percent in the US and nine percent in other countries.