Surname 1

Name of Student:

Instructor:

Course Name:

Submission Date:

A Profile of Laws, Governance and Economics of Denmark

Introduction

Located in the Scandinavian country, Denmark is part of a large peninsula called the Danish

Archipelago located in Northern Europe. Between the 9-10th century, the Vikings' notable

raid in Denmark and other Neighbouring nations shaped the progression of European history

(Jespersen, 2011). During the Middle Ages the Union of Kalmar, there was a union of

Scandinavia. Their location allows them to control the Danish traits connecting the Baltic Sea

to the North Sea; which surrounds most of the country. Their only land border shared is with

Germany and the closest countries are Norway and Sweden, and depending on the location

the official languages spoken are Danish, Faroese, Greenlandic, and German (Forsberg,

2015).

Denmark’s Capital is Copenhagen which is also the largest city and the country’s population

is estimated at 5,850,189 between Faroe Islands, Greenland, and Density (Denmark)

(Worldmeter, 2021). Denmark covers an area of approximately 42,916 Km² (Denmark

statistics, 2020). The ethnicity groups present today are 86.11% Danish, and 13.89% non-

Danish;

Immigration has been increasing for the past 30 years and the most common nationalities are

Iran, Syria, turkey, and Afghanistan. Several ethnic minorities are also residing in the country

such as Vietnamese, Jews, Chinese, Chileans, Albanians, among others (Harmon, 2018).
 Surname 2

In the 21st century, Denmark has advanced into an extremely competitive economy

with low rates of unemployment and a good social security cover system. This has been

achieved after the post-war which consolidated the country’s liberal reputation that reduced

taxation and the increasing tension on immigration that went on for a long period (Campbell

and Ove., 2007).

Economic profile of Denmark

Denmark has the highest standards of living in the world-its Gross National Product

(GDP) is high. The economic Freedom score stands at 77.8 which makes it the 10th free

economy in the 2021 index (World Bank, 2021). This is attributed to a well-structured and

developed social service. The primary service-based industries are trade and manufacturing.

Agriculture and fishing are practiced by a minority of the population while small enterprises

remain dominant. Denmark’s soaring economy is dependent on the government's strong

support for trade. Denmark is a wide exporter of processed food, oil, and petroleum gas with

an equilibrium balance on imports and exports.

The country has been experiencing an economic expansion since 2016. At the onset of

2016, the economy had grown by 2.0% and 2.1% in 2017. It is forecasted to expand to 2.9 in

the year 2022. The country’s account is well with the least debt-to- GDP than other European

countries. It is projected to increase as a result of GDP shrink, large stock-flow, and low tax

deficit (Hansen et Al., 2014).

Denmark joined European Union in 1973 and has been an active member since then.

The country’s economy main backbone is on foreign trade and the private sector such as

SME-based companies that lead in; maritime shipping, processing food, construction, and

pharmaceuticals.
 Surname 3

Denmark is noted to be the least corrupt country in the world with the rank of 1 out of the 190

countries (Transparency international’s 2019 Corruption Perception Index). The income tax

rate is 56% and the top corporate tax rate is 22 %. The total tax burden equals 46 percent of

total domestic income (Jaakson, Krista, et al., 2019). The total Government spend has

doubled to 51 percent of total output (GDP) over the past four years, and budget excesses

have averaged 1.7 percent of GDP. The Public debt is equivalent to 30 percent of the GDP

(Kleven, Henrik Jacobsen, et al, 2014).

Political profile

Denmark’s political structure is made up of a multi-party system; all the parties are

represented in the parliament. There has been none of all the parties that have had a majority

of parliamentary seats since 1909. The leading figure within the coalition within the strongest

parties becomes the prime minister. The Denmark Queen is the absolute head of government.

Her responsibilities are usually ceremonial. Queen Margrethe II of Denmark has ruled as

Queen Regnant and head of state since 1972 (Rytter, 2010).

The framework for the Denmark democracy is built on the 1849 Danish constitution making

it the oldest constitution in the world. The democracy was founded as a reaction against the

royal absolute control that infringed on the freedom of the citizens. The basic law is also

known as Grundlov is a set of essential principles and rules that every citizen must abide by.

The rules are freedom of expression and freedom to assembly. The electoral system is based

on equal representation from all parts of the country organized in small groups or small based

movements to have parliamentary seats. Legislative bills must be presented and accepted

three times in the same Parliamentary year (Dobbins, et al. 2015).

According to the constitution, the King sets out several ministers and has the absolute power

to dismiss and appoint them. One Main outstanding characteristic of democracy in Denmark
 Surname 4

is openness and transparency to the general public. The political system is maintained

through balance and checks by the citizens, the press, and other forms of media. The

transparency has been carried through the public service administration where the citizens

have public access to documents and can complain to the Ombudsman (Jespersen, 2011).

Legal profile

Under the Danish constitution, Denmark is governed by the Constitutional monarchy.

The monarch is sacrosanct the institution is too important and valuable to be interfered with.

While the executive arm is executed by the monarch, the legislative arm is a joint effort

between the Danish parliament and the monarch. Judicial authority is administered by the

country’s court (Gylfason, 2017).

Denmark Jurisdiction basis on the foundation is divided into public law and civil law.

Commercial law within Denmark is not within the jurisdiction framework (Constitution of

Denmark, 2016). The key pillars of statutes of significance in professional relationships are

the Consumer Contracts Act, the Danish Sale of Goods Act, and the Contracts Act

(Hjalmarsson, 2008). The consumer act enforces several duties and rules. There are also three

boards: The Appeals Permission Board, The Sideline Employments, and the Judiciary

Appointment Council. As an administrative entity, The Danish Court plays its role in the

organization.

Throughout history, the jurisdiction of law in Denmark has been reference through case laws

in areas where there is little or no statutory legislation. It is worth noting that common law

systems in courts supersede civil law systems have a greater influence. Ordinary courts in

Denmark deal with all types of cases from civil to criminal cases, their responsibilities

intercede in a hierarchy (Greve, 2012).

 Surname 5

The first level court is known as district courts also known as Beret. It is located within the

24 different circuits. Then the high court is subdivided into two, the Western Division and the

Eastern Division. Then there is the highest court in the country, the Supreme court (Sunnqvist

2021).

To add on that, maritime courts and commercial courts operate permanently in

Copenhagen. Convicting individuals using special courts is not allowed in Denmark.

Similarly, to examine different parliamentary topics by establishing a decree. These courts

are called special investigative courts (Tamm, 2021).

Unlike other European counties, Denmark does not have a separate constitution court

and administrative court. Also, unlike Spain it does not have a division of courts; in

Denmark, the cases are determined by ordinary courts. Since its inception laymen have been

an integral part of the management in Denmark. Assistant special judges take part in

commercial and maritime cases and also criminal cases. The jury and layman collaborate in

determining serious criminal cases (Tamm, 2021).

In Denmark consumers are protected under the Denmark law is comprehensively outlined in

the Marketing and practices act. The bodies that govern the consumer are The National

Consumer Agency, the consumer Ombudsman and the Consumer Complaints Board.

Socio-cultural profile

Despite the harsh weather experienced in Denmark, it is one of the top places to live

dubbed to be a place of happiness. The country has a high level of social trust between

persons, institutions, monarchs, and the police. Conviction is an important factor, especially

in the business environment. It is widely assumed that anyone in Denmark is honest unless

otherwise proven not (Woodside, et al., 2016).

 Surname 6

Danish systems such as the health care system are tax-funded and are free for all

patients, similarly, the schools and universities are also tax-funded and free for all students.

The ideology behind the system is equal contribution and in return free service for all.

Denmark is an Egalitarian society. The Danish language employs gender-sensitive wording.

To be concerned about their accomplishment most Denmark are always honest and

prefer group accomplishment over individual needs. Both men and women are given

maternity and paternity leave and provisions are equally provided. Different from other

neighboring countries division of labor is equal as men become more involved in in-house

chores and rearing of kids.

The citizen of Denmark always believes it is human nature to act properly at a certain

situation. For example, if someone does not follow the ascribed rules they will be

admonished and reported to the relevant authority. This has bred over the years and shaped

the behavior of dens. Additionally, they expect courteous behavior and use of moderate tone,

especially from visitors.

The nuclear family is relatively small and is at the center of the social structure in

modern Denmark. From an early age, children are groomed to be independent and are put in

daycare as early as 1 year. Although marriage is not an important factor in starting a family,

most couples live together without formal legislation.

There is one habit that is not tolerated in Denmark, the habit of tipping service

attendants. Tipping is not allowed due to the good payment wage system and the laws that

govern charges and tips. Restaurants, hotels, and taxis must abide by service and tipping laws

in Denmark. (Commission Global Consulting LTD., 2020)

 Surname 7

Technological profile

Denmark tops the digital world according to the Digital Economy and Society Index

2017. The country provides exceptional opportunities for trying and coming up with new

technology (Bergek,). More than 95% of the citizens are online and aggressively engaging in

using services. Excellent Information Technology, world-class research, skilled talents are

some of the prerequisites in setting up a business in Denmark (Whitelaw, Sera, et al., 2020).

Denmark researchers have come up with several programming languages that have

progressed technology. Some of the languages are Pascal, C++, USE OF Turbo, and visual

Prolog programming. Through progressive software development, Denmark has progressed

in the fields of security systems, AI, machine learning, wireless networking, E-Government

services, robotics, and cryptography (Östlund, 2017).

The reason behind the success in technological sprout in Denmark is attributed to

several factors. In 2018 the government introduced the “The Digital Strategy”. The

strategy’s objective was to establish the country as a tech hub. The government recognized

the need to set up the right environment for both foreign and national companies to utilize the

available technology to transform the socio-economic aspects of life (Ejersbo et al., 2016).

The strategy set up around 38 initiatives that were allocated an equivalent of Euro 134

million for a period of 8 years starting from 2018 to 2025(Ministry of Industry, business and

financial affairs, 2018). In addition to the strategy, the government launched the National

Strategy for Artificial Intelligence (NSAI). The strategy envisioned companies use Artificial

Intelligence (AI) to gain a competitive advantage over their opponents. The government

invested approximately 200 million EURO in research and pilot projects (Ministry of

Industry, business and financial affairs, 2018).

 Surname 8

Denmark’s foreign policy is identified as a sovereign state in, all Europe, North

America, and within the Arctic. From history, Denmark has been known to have very

amicable relations with other nations. Notably, it's known to foster an alliance between the

western and Baltic states of Lithuania, the Baltic, and Latvia.

Following the advent of World War II, Denmark made amends to end the 200-year

long neutrality policy. Being a long member of NATO since its foundation. Denmark has had

good relations with its neighbours especially Germany (Shafi, 2010). They have had

profound relations and trade due to the frequent meetings and dialogues at all levels of

politics and economics. Denmark, Poland, and Germany have had mutual activities at the

state, parliamentary level and contributed their troops to the Multinational Corps Northeast

located in Stettin.

Denmark is a heavy promoter of sustainable development by heavily contributing to

supporting solutions to the wide array of problems facing the globe. It is a major factor in

ensuring the international set laws and universal human rights have been observed.

Additionally, it takes initiatives in ensuring there is global peace, humanitarian assistance,

and international military assistance.

Since its help in 1945 by the USA during World War II, Denmark has been one of the

strategic allies of the United States. This bilateral cooperation has been fostered through

being a member of the North Atlantic Treaty Organisation (NATO). The country has

vehemently supported the U.S foreign policy in both Afghanistan and Iraq. It is worth noting

that the United States is the largest non-European trading country.

 Surname 9

Trade and Foreign Direct investment

The level of Foreign Direct Investment (FDI) is quite below the expectation of the

country’s potential. This is attributed to the effect of the Covid-19 pandemic. Investments in

Denmark are mostly finance, retail, real estate, IT, and provision of insurance. The

companies’ stocks are mainly held by European countries such as UK and Sweden. The USA

is the largest investor in the country (Thompson and Lars). FDI in Europe channels through

Netherlands and Luxembourg. Through the screening project introduced by the Sweden

Government, the government can sieve through investments that would jeopardize the

national security and the public order (Behringer, 2005).

Through the eyes of independent observers, Denmark can be accredited to be the

world’s most lucrative business environment. It is characterized by a stable economic,

political and legal environment to start a business. Additionally, it maintains a fixed exchange

rate policy and abides by all the European Union legislation and regulations.

Climate for Multinational Corporations (MNCs)

Denmark has a well-laid out business environment which is ranked at 4th place in its 2020

financial year. Doing business is relatively safe and profitable.

A. Strengths

The country’s population is highly skilled and has a multilingual workforce that can

work in all facets of the economy. In addition to the flexible market, there is an ultra-modern

infrastructure with tax incentives for foreign and local companies. Denmark has a high level

of transparency and accountability with low corruption rates.

B. Opportunities and Threats

Through relatively low taxation rates of lower than 21%, the sectors of the economy

responsible for exports can use the various resources to attract foreign direct investment. One
 Surname 10

untapped opportunity in Denmark is the use of renewable energy. With the onset of Brexit

most European and Non-European countries will look to relocate to other countries, Denmark

could be a hub for these relocations. An economic downturn will be the biggest threat to

Denmark. This will increase inflation and cause a surge in unemployment rates.

C. Suggested market entry strategies for MNCs

Investing in another market can be risky especially in unfamiliar countries where huge

capital may be required. One can introduce their products and services to huge markets in

other countries by increasing their sales, branding, reducing large risks.

Exporting

Direct sale of goods and services to another country is known as exporting. This is the

best method of engaging in a foreign market with minimal risks.

Licensing.

The use of the property of a foreign country by buying their rights is licensing.

Licencing requires little investment and has a high return on investment

Franchising

Intellectual property rights are sold to foreign companies in a similar process as

licensing a product or service.

Joint Venture

Two companies can come together to form a jointly owned business. One of the

partners can be from a foreign country and the other can be from the host country. Joint

venture cuts on the cost of production and operating expenses.

Foreign Direct Investment

 Surname 11

A company can decide to fully engage in investing new resources in a county by

utilizing the untapped market.

Wholly Owned Subsidiary

A wholly subsidiary is an investment to another county by transferring the whole

companies functions instead of having a branch.

Piggybacking

When two non-competitive companies work together to sell each other’s products or services

in a home country or a foreign country.

Conclusion

Denmark is a very potential county for both its citizens and foreigners. With a well-

laid-out economic structure that is ever-expanding with low tax rates and government

spending. Also, the serene political environment has ensured business thrives well as all

coalitions are equally represented in the government. Laws are respected by all citizens and

non-citizens and safeguard them from external and internal risks. With the lively socio-

cultural aspect that has traversed many decades, business culture thrives easily compared to

other markets. Finally, from an analytical view, Denmark has many external and internal

strengths that can be utilized to access the various untapped opportunities.

 Surname 12

Recommendations for MNCs

 Multinational corporations should ensure they establish a symbiotic relationship that

ensures competitive competition that doesn’t knock out other companies from

investing.

 The MNCs with the governments should respect the use of basic principles in

business management to succeed.

 The Multinational company can insource and move certain business aspects to

another country. Insourcing may provide less labour expense, cost of production, and

tax incentives.
 Surname 13

Works Cited

Commisceo Global Consulting Ltd. Afghanistan - Language, Culture, Customs and Etiquette.

www.commisceo-global.com. 1 Jan. 2020 https://commisceo-global.com/resources/country-

guides/afghanistan-guide.

Jespersen, Knud JV. A history of Denmark. Macmillan International Higher Education, 2011.

Forsberg, Peter. "Denmark." Running across Europe. Palgrave Macmillan, London, 2015. 59-

80.

Worldometer (www.Worldometers.info)

Elaboration of data by United Nations, Department of Economic and Social Affairs,

Population Division. World Population Prospects: The 2019 Revision. (Medium-fertility

variant).

https://www.dst.dk/en/Statistik/emner/miljoe-og-energi/areal/arealopgoerelser (Denmark

statistics 2020)

Harmon, Nikolaj A. "Immigration, ethnic diversity, and political outcomes: Evidence from

Denmark." The Scandinavian Journal of Economics 120.4 (2018): 1043-1074.

Campbell, John L., and Ove K. Pedersen. "The varieties of capitalism and hybrid success:

Denmark in the global economy." Comparative Political Studies 40.3 (2007): 307-332.

"Gross national income per capita 2017, Atlas method and PPP. World Development

Indicators database, World Bank, 21 September 2018. Retrieved 6 December 2018" (PDF).

Archived (PDF) from the original on 12 September 2014. Retrieved 6 December 2018.

Hansen, Teis, Lars Winther, and Ronnie Fibæk Hansen. "Human capital in low-tech

manufacturing: The geography of the knowledge economy in Denmark." European Planning

Studies 22.8 (2014): 1693-1710.

 Surname 14

Jackson, Krista, et al. "The role of costs, benefits, and moral judgments in private-to-private

corruption." Crime, Law and Social Change 71.1 (2019): 83-106.

Rytter, Mikkel. "‘The Family of Denmark’and ‘the Aliens’: Kinship Images in Danish

Integration Politics." Ethnos 75.3 (2010): 301-322.

Dobbins, Michael, and Marius R. Busemeyer. "Socio-economic institutions, organized

interests and partisan politics: the development of vocational education in Denmark and

Sweden." Socio-Economic Review 13.2 (2015): 259-284.

Jespersen, Knud JV. A history of Denmark. Macmillan International Higher Education, 2011.

Gylfason, Thorvaldur. "The Anatomy of Constitution Making: From Denmark in 1949 to

Iceland in 2017." (2017).

Constitution of Denmark. http://www.servat.unibe.ch/icl/da00000_.html

Hjalmarsson, Johanna. "The Swedish Insurance Contracts Act 2005–an overview."

Scandinavian Insurance Quarterly 1 (2008): 85-92.

Greve, Emil. "„Local government in Denmark “." Local government in the Member States of

the European Union: a comparative legal perspective (2012).

Sunnqvist, Martin. "The changing role of Nordic courts." Rethinking Nordic Courts.

Springer, Cham, 2021. 167-183.

Tamm, Ditlev. "Courts, law, language and culture." Rethinking Nordic Courts. Springer,

Cham, 2021. 37-47.

Woodside, Arch G., Pedro Mir Bernal, and Alicia Coduras. "The general theory of culture,

entrepreneurship, innovation, and quality-of-life: Comparing nurturing versus thwarting

 Surname 15

enterprise start-ups in BRIC, Denmark, Germany, and the United States." Industrial

Marketing Management 53 (2016): 136-159.

Bergek, Anna. Shaping and exploiting technological opportunities: the case of renewable

energy technology in Sweden. Goteborg: Chalmers University of Technology, 2002.

Whitelaw, Sera, et al. "Applications of digital technology in COVID-19 pandemic planning

and response." The Lancet Digital Health (2020).

The Digital Economy and Society Index (DESI). https://digital-

strategy.ec.europa.eu/en/policies/desi (2017). Shaping Europe’s digital future

Östlund, Britt. "Digitizing health care: Welfare technology as a way to meet digital and

demographic challenges in Sweden." 2017 4th International Conference on Systems and

Informatics (ICSAI). IEEE, 2017.

Ejersbo, Niels, and Carsten Greve. "Digital era governance reform and accountability: The

case of Denmark." The Routledge Handbook to accountability and welfare state reforms in

Europe. Routledge, 2016. 281-293.

Behringer, Ronald M. (September 2005). "Middle Power Leadership on the Human Security

Agenda". Cooperation and Conflict. 40 (3): 305–342. doi:10.1177/0010836705055068.

S2CID 144129970. Archived from the original on 6 January 2016. Retrieved 1 May 2016.

Ministry of Industry, business and financial affairs, 2018. Strategy for

Denmark’s Digital Growth(2018). The Danish Government

Shafi, S. M. "Indo-German Bi-Lateral Trade: Retrospects and Prospects." From Editor’s Pen

(2010): 10.
 Surname 16

Thompson, Grahame F., and Lars Bo Kaspersen. "The globalization of the business sector in

a small open economy: the case of Denmark and its wider implications." Socio-Economic

Review 10.4 (2012): 627-653.