Financing in Denmark
Financial Institutions
• Danske Bank • Jyske Bank • Nordea Bank • Sydbank
www.danskebank.dk www.jyskebank.dk www.nordea.dk www.sydbank.dk
Real Estate finance institutes
• BRF Kredit • Nordea Kredit • Nykredit • Realkredit Danmark • Totalkredit
www.brf.dk www.nordeakredit.dk www.nykredit.dk www.rd.dk www.totalkredit.dk
Leasing Companies
• Finans Nord A/S • GE Capital Equipment Finance AB • Jyske Finans • Nordania Leasing • Nordea Finans
www.finansnord.dk www.gefin.com www.jyskefinans.dk www.nordania.dk www.nordeafinans.dk
Whether your company considers to relocate, consolidate, set up new production facilities, is on the lookout for new innovation partners or other strategic business solutions in Europe, Invest in Denmark is a good place to begin. We provide customised information and services free of charge and in full confidentiality.
Invest in Denmark 2, Asiatisk Plads DK-1448 Copenhagen K Tel. +45 33 92 11 16 Fax +45 33 92 07 17
> www.investindk.com The information stated in this fact sheet may contain errors or omissions. Invest in Denmark and our co-operation partners disclaim any and all liability for any loss or damage caused by such errors or omissions.
Facts... September 2007
F i n a n ci n g i n D e n m a r k There is a great deal of focus on foreign investment initiatives in Denmark and the Danish government greatly encourages foreign investments. A wide range of sources of finance exists in Denmark, from public incentives and private investors to banks, venture capitalists and institutional investors. The choice of financing will depend on the company and its focus of business activities, the management, the stage of development of the company, the amount of capital needed, etc. Each company must be assessed individually when seeking finance in order to choose the right finance partner. It is highly recommended to seek professional advice when negotiating with investors and finance institutions. Below you will find a brief outline of different types of sources of finance.
Denmark offers ...
• Support of free trade and non-discrimination of foreign investors • A wide range of sources of finance • General public and private incentives • Favourable mortgage financing of real estate • A well-established market for venture capital and private equity
More information... www.statbank.dk
Banks
If a company is considering setting up operations in Denmark, it is important to discuss the matter with a bank in the introductory phase since Danish banks are prepared to offer advice and are able to meet many of the company’s needs. The Danish banking system is very efficient and has a good IT infrastructure making it easy and fast to open an account. It is no problem handling complex banking transactions and even small banks have a high degree of competence. Several major Nordic banks have a presence in Denmark. A wide range of financing options is available to companies’ day-to-day operations and fixed asset investments. In addition to ordinary banking transactions, the banks also offer financial services such as insurance, mortgage financing, real estate services, asset management and leasing. Danish banks are far ahead in electronic cash management. The banks have developed electronic banking systems that may be adjusted to the individual needs of companies, including integration with financial management systems. The banking systems can handle accounts with banks in other countries, control cash flows and make it possible to retrieve information and manage liquidity efficiently both in and outside Denmark.
Made in cooperation with
Financing in Denmark
Banking and financial services Degree to which banking and financial services efficiently support business activities. The higher the score the better.
Denmark USA Netherlands Sweden Ireland Belgium UK Germany
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Denmark has two clearing systems in which payments are cleared. UDUS handles clearing of local payments in Denmark made via the banks’ accounts in the Danish central bank. The system is efficient and fast. The other system is PBS. Payments cleared by PBS are payment products which optimise the administrative routines of companies. PBS is owned by the Danish banks.
The payroll system, Dataløn, is the largest and most common system for pay and staff administration. It is used by more than 85,000 businesses and pays out salaries and wages to about 1.3 million Danes. Regardless of the payroll system chosen, it may be adjusted to the individual business. The systems can handle all routines related to staff administration, including calculation of taxes and duties to the public authorities.
PBS handles Danish and international payment cards, including Dankort (Denmark’s national debit card), Visa and MasterCard. Furthermore, PBS has extensive expertise in handling card transactions and mass transactions. Dankort are widely used and virtually all Danes possess one. Dankort have more or less replaced cash deposits and cheques. The banks have developed a joint transfer form for the collection of debtor payments to the effect that amounts due are credited direct to the relevant account. The debtors can effect their payments in all banks and at post offices or via an electronic link to the bank. Transfer forms have a reference number which the creditor can use for identifying the debtor and for automatic reconciliation. Bank transfers are the most widely used payment method by businesses in Denmark. The beneficiary can receive advice of the payment either on paper, by letter or electronically by way of a file from the bank. Largely all Danish banks offer a wide range of cash management products. It is a good idea to involve the bank in tailoring the optimum cash management set-up so that the business and the bank can identify the needs and find possible solutions that match the internal processes of the business.
More information... www.pbs.dk
More information... www.multidata.dk
Financing in Denmark
Real estate
Denmark has a unique mortgage financing system which is renowned internationally for its many qualities. The Danish mortgage market is characterised by efficiency, a good product mix, distribution channels and advisory and information systems. Mortgage loans can be adjusted to match the individual needs of the business and may have terms to maturity of up to 30 years. Real estate in Denmark can be financed by way of mortgage loans. Around 60 – 80% of the valuation may be financed by mortgage bonds depending on the type of real estate. The remaining 20 – 40% should be provided by way of own funds possibly combined with fixed asset financing or mortgage deeds. The proportion of own funds depends on the type of property, the borrower’s financial position, etc. Covered bonds (SDO) and Covered mortage bonds (SDRO)
From July 1st 2007 banks and other financial institutions have been able to issue bonds backed by mortages on property. In contrast to existing Danish mortgage bonds, these new, so-called covered bonds meet the EU requirements for ongoing monitoring of the value of the security/property. Leasing
Increasingly more businesses lease their machinery and equipment instead of owning them. Leasing strengthens the liquidity and makes the business more flexible and dynamic. There are many leasing companies in Denmark offering individual financing solutions based on the company’s needs. It is possible to lease largely all types of assets, for instance production machinery, IT equipment, office furniture, agricultural machinery, cars, vans and trucks. Venture capital
Companies wishing to expand in Denmark can apply for venture capital. A large number of venture capital firms have been established in Denmark, offering equity for establishment, development and expansion of growth companies. Venture capital is a relatively wide term comprising government granted funds, joint venture funds, bank/insurance/pension funds, institutional funds, corporate venturing etc. There are several corporate financing companies owned by renowned Danish companies like Danfoss, Carlsberg and Novo with a total of DKK 3 billion for investment in new technology, markets or products that fit their corporate strategy. The website of the Danish Venture Capital Association offers more information and a list of the majority of Danish venture capital firms.
More information... www.dvca.dk
More information... www.vaekstfonden.dk
Private investors/business angels
www.dban.dk
Companies not looking for venture capital can apply for capital and seek management expertise from private investors and business angels. The capital may be offered as ordinary loans, convertible loans or share capital. A national network of business angels has been established in Denmark by Vækstfonden (Danish Investment Fund) and the Danish Ministry of Economic and Business Affairs. The coordinator of this network is the Danish Investment Fund, which also offers loans and guarantees for high-risk projects. The Danish Business Angels Network is part of the Danish Venture Capital Association, A European Business Angels Network has also been established.
www.dvca.dk www.eban.org