Denmark is a prosperous, democratic country in Northern Europe with a high standard of living, a low level of corruption, and a high level of education and health care. Denmark has a long tradition in scientific and technological invention and engagement.
Denmark has a modern market economy with a high-tech agricultural sector, advanced industry with world-leading companies in pharmaceuticals, maritime shipping and renewable energy. However, the economy of Denmark highly depends on foreign trade.
Danish banking sector is characterized by large size in terms of total assets, high degree of concentration while having a significant number of small banks, and prevailing share of domestic banks over foreign-controlled banks which are represented in Denmark by a few large international groups.
|Population (2016)||5 707 251 (+0.01%)|
|EU Status||member since 1973|
|National Currency||DKK (Danish krone)|
|Exchange Rate (2017-02-17)||1 EUR = 7.4334 DKK|
|Nominal GDP (2015)||266.2 bln EUR (+0.03%)|
|Nominal GDP per Capita (2015)||46 900 EUR (+0.03%)|
|Real GDP Growth (2015)||1.2 % (2014: 1.0 %)|
|CPI, MoM (Dec 2016)||0.1 % (Nov 2016: -0.2 %)|
|CPI, YoY (Dec 2016)||0.3 % (Nov 2016: 0.1 %)|
|CPI, Year Average (2016)||0.0 % (2015: 0.2 %)|
|Unemployment Rate (2015)||6.2 % (2014: 6.6 %)|
|Government Bond Yield (Dec 2016)||0.39 % (Nov 2016: 0.32 %)|
|Credit Ratings (as of Sep 2016)|
|Fitch||AAA||highest credit quality, outlook stable|
|Moody's||Aaa||prime, outlook stable|
|Withholding Tax||0.0 - 27.0%|
|Double Taxation Agreements||69 signed agreements|
|Exchange on Request||52 signed agreements|
|Automatic Exchange||starts in September 2017|
|FATCA||IGA in effect since 19 November 2012, Model 1|
|Financial Market Development||4.8 (max 7.0)||rank: 24th out of 138 countries|
|Banks' Soundness||5.6 (max 7.0)||rank: 41st out of 138 countries|
|Banking Industry Country Risk||3||(1 - lowest risk, 10 - highest risk)|
|Deposit Guarantee Scheme|
|Maximum Protected Amount||100 000 EUR|
|Country Ceiling for Deposits|
|Local Currency (Danish krone)||Aaa||prime|
|Deposit Rates (Nov 2016, DKK)||0.08 % (Oct 2016: 0.16 %)|
|Banking Sector Structure|
|Number of Banks||111|
|Recent Changes (2016)||new banks: 1, closed banks: 4|
|Consolidated Assets (2015)||871.29 bln EUR (-4.47%)|
|Nordea Bank Danmark||Sydbank|
|List of Banks in Denmark|
During the last 11 years EURDKK exchange rate was within the range 7.4319 - 7.4697, reaching its maximum in Mar 2015 and falling to its minimum in May 2012.
According to Eurostat, nominal GDP of Denmark in 2015 was 266.2 bln EUR.
Denmark underperforms the European Union in terms of real GDP growth with the average annual differential coming to 0.0% over the past 10 years (2005 - 2015). In 2015 real GDP growth was 1.2% which was below the Euro Area average (1.6%) and below the European Union average (1.9%). Real GDP growth in 2016 - 2021 are IMF's estimates.
In 2015, nominal GDP per capita in Denmark was 46 900 EUR.
Denmark has an above-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, exceeded that of the European Union by 19.9% over the past 10 years (2005 - 2015). GDP per capita at PPP in 2016 - 2021 are IMF's estimates.
According to Eurostat, inflation rate in Denmark in 2016 expressed as annual percentages of average consumer prices was 0.0% which was below the Euro Area average (0.2%) and below the European Union average (0.3%). Inflation rates in 2017 - 2021 are IMF's estimates.
Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.
Withholding tax rates applied on payments of interest and dividends in Denmark are shown in Table 1.
|Natural person, resident||27.0||0.0|
|Natural person, non-resident||27.0||0.0|
Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.
Denmark signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Denmark and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 01 January 2013 of signing the agreement is given in brackets):
There are 3 ways for jusrisdictions to exchange information on tax matters:
Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.
Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.
Denmark signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):
There are also several agreements between Denmark and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 01 January 2013 of signing the agreement is given in brackets):
Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.
Denmark signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.
Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).
Denmark has FATCA agreement with the U.S. in effect since 19 November 2012 (Intergovernmental Agreement Model 1). Financial institutions operating in Denmark are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: Danish financial accounts hold in U.S. financial institutions will be reported to Danish authorities.
FATCA and European countries
According to World Economic Forum's Global Competitiveness Report 2016-2017, financial market development in Denmark is scored 4.8 out of maximum 7.0 and ranked 24th out of 138 analysed economies. Soundness of banks is scored 5.6 bringing Denmark into the 41st place, trustworthiness and confidence of financial market is scored 5.4 (16th place).
Banking Industry Country Risk Assessment (BICRA) is a methodology designed by Standard&Poor's "to evaluate and compare global banking systems". A BICRA is scored on a scale from 1 to 10, ranging from the lowest-risk banking systems (group 1) to the highest-risk (group 10). The BICRA methodology has two main analytical components: "economic risk" and "industry risk". Each of the components is then further divided into 3 "factors" that result in an economic and industry risk score for each country.
Denmark is included into group '3' with economic risk scored '3' and industry risk scored '3'.
|Economic resilience||very low|
|Credit risk in economy||intermediate|
|Government support assessment||supportive|
Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.
From a depositor's point of view it is important to know:
All these details about deposit guarantee scheme in Denmark are summarised in Table 3.
|Scheme Participants||all credit institutions operating in Denmark, branches of non-EEA banks, branches of Danish banks abroad|
|Scheme Exemptions||branches of EEA-banks (covered by their home countries)|
|Eligible Depositors||natural persons, legal entities|
|Covered Accounts||cash deposits|
|Maximum Protected Amount||100 000 EUR|
|Paid In Currency||EUR|
Table 3. Deposit guarantee scheme in Denmark.
EEA stands for European Economic Area and consists of all EU member states plus Liechtenstein, Norway and Iceland.
Deposit Guarantee Schemes in Europe
Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.
Local currency (Danish krone) deposit ceiling for Denmark is set to Aaa (prime), foreign currency deposit ceiling is Aaa (prime).
Currently there are 111 credit institutions operating in Denmark.
Recent structural changes (2013 - 2016) of the banking sector of Denmark are summarised in Table 4.
|Number of Opened Banks||0||10||4||1|
|Number of Closed Banks||10||8||7||4|
Table 4. Recent structural changes in the banking sector of Denmark.
All the credit institutions operating in Denmark can be classified into several categories. Table 5 summarises the number of banks in each category.
|Category||Number of Banks|
|Branches of foreign banks||25|
The list of the most recently opened banks in Denmark is provided in Table 6.
|Citibank Europe plc, Denmark Branch, Filial af Citibank Europe plc, Irland (new)||July 2016|
|Maj Bank A/S (new)||September 2015|
|Eurocard Danmark, filial af Eurocard AB, Sverige (new)||February 2015|
|Resurs Bank, filial af Resurs Bank Aktiebolag, Sverige (new)||February 2015|
|UBS (Luxembourg) S.A.,Denmark branch, filial af UBS (Luxembourg) S.A. (new)||February 2015|
|Coop Bank A/S (new)||July 2014|
|Deutsche Bank AG, Copenhagen Branch, filial af Deutsche Bank AG, Tyskland (closed)||July 2014|
|Forso Danmark, filial af Forso Nordic AB, Sverige (new)||July 2014|
|Handelsbanken Kredit, filial af Stadshypotek AB, Sverige (new)||July 2014|
|Landbrugets Finansieringsbank A/S (new)||July 2014|
Table 6. The most recently opened banks in Denmark.
There are 25 branches of foreign banks from 6 different countries in Denmark. Table 7 shows the number of branches grouped by the country of origin.
|Country of Origin||Number of Branches|