The decision is taken in a boardroom on the basis of well-developed business cases. But it can also help attract foreign companies to Copenhagen when they have the opportunity to see the city for themselves. See the green urban development, experience our thoroughly digitised society and talk to Danes who answer in fluent English.
This is reflected in Copenhagen Capacity's new annual report. While the corona year 2020 was the worst for a long time, 31 companies chose, with Copenhagen Capacity's help, to make new investments in Denmark in 2022. 23 of the companies were not already in Denmark, while eight have expanded their Danish branches.
"Despite the war and uncertainty in the financial markets, we see that Copenhagen and Denmark are still an attractive place to invest. This is our best result so far," says Asbjørn Overgaard, CEO of Copenhagen Capacity, who expects the foreign investments to create or maintain 1294 jobs.
Digital society
Asbjørn Overgaard is quick to list a number of good reasons to invest in Copenhagen. But what do the companies themselves say?
The response from payment giant Mastercard was prompt.
"In Denmark and the Nordic region, we have reached a level of digitalisation that is so high that the products and services that are relevant in the Nordic market will be relevant in other markets in a few years. The future is already being played out in the Nordic region, which makes it an important place for development," says Lars Asger Petersen, CEO of Mastercard Payment Services Denmark, which is based in a new technology centre in Ørestad.
In less than two years, Mastercard has gone from three employees in Denmark to over 300. Around 200 of these employees joined Mastercard in 2021 when it acquired the part of Nets that provided, among other things, account-to-account payments. Danish products make it natural for Mastercard to be in Denmark.
"The structure in Denmark is very similar to that of Dutch, and there is also strong support for electric cars". -Ivo van Dam, Technical Director, Power Go
Part of the environment
In the shadow of the big corporate deals are a number of smaller companies looking for an entry point into the Nordic region.
The reasons why they choose to settle in Copenhagen are as varied as the companies themselves.
"For us, the most important thing was to have an office in the Nordic region, and the choice was between Copenhagen and Stockholm. We chose Copenhagen because it has a strong urban development environment and because we've had a really good collaboration with Blox," says Henrik Morgen, Nordic-Baltic head of the German company Bable Smart Cities, which provides solutions to help public and private organisations work together to develop sustainable cities.
3,7 per cent of GDP was foreign investment in Denmark in 2021
Spanish engineering company Klinea helps clients in the pharmaceutical and biotech industry to develop and optimise production facilities. For Klinea, there were three main reasons for locating their first office outside Spain in Copenhagen: the capital's strong position in pharma and biotech, the location between the rest of Scandinavia and Germany, and the Danes' strong English language skills.
Marc Ramoneda, Head of Business Development for Klinea in Europe, explains.
"We are looking for an office and will be hiring a managing partner in Denmark. The plan is to grow organically with Danish employees, so it's about finding the right people, and our schedule depends on that," says Marc Ramoneda.
He has two decades of experience in expanding businesses into new markets, having worked for Novo Nordisk, among others. Today, he travels to Denmark for one week a month, where the company has been registered, but they are still waiting to hire their first employee.
Expensive wages
It is difficult to find precise figures on how well individual countries are doing in the competition to attract foreign companies. But if you look at the latest World Bank FDI figures from 2021 - which include foreign investment in a country as a percentage of GDP - Denmark is doing better than the previous two years and better than the EU countries as a whole. However, we are not as good as Sweden.
"The problem is that these figures can be significantly distorted by large acquisitions of individual companies. That's why we also look at the Financial Times FDI figures for how many new foreign-owned start-ups there are and how many jobs they estimate they create. Here, Denmark actually performs better than Sweden," says Asbjørn Overgaard, director of Copenhagen Capacity, emphasising that the weakness of this method of calculation is that it does not take into account how much money is invested.
"Sweden is more likely to invest large sums in capital-intensive businesses such as battery factories and data centres, which do not provide many jobs. Stockholm was also long ahead in attracting the Nordic headquarters of foreign companies because it is easily perceived as a kind of Scandinavian capital. Fortunately, here we are catching up with them in Copenhagen. In the Ørestad region, we are most attractive for life sciences industry. And the flexible Danish labour market rules, where it is easy to hire and fire, are a draw for many foreign companies," says Asbjørn Overgaard. Although the German company Bable Smart Cities chose to set up Bloxhub in Copenhagen in 2022, where Henrik Morgen will build a Nordic-Baltic head office, he believes that Denmark is in fierce competition with many other countries. And here, the high wage level is a particular drag.
"Wage and cost levels are high in Denmark, and this is very noticeable when you are a small German company with around 50 employees," says Henrik Morgen.
Yet Dutch company Power Go, which makes solar-powered charging points for electric cars, has already leased office space in Copenhagen as part of a major international expansion into six different countries.
"The culture in Denmark is very similar to the Dutch culture and there is also a lot of support for electric cars, so we believe we can get a good position in the market. We have already hired our first employee in Denmark and hope to hire between 20 and 50 in the next 18 months, depending on our growth in both Denmark and the other Nordic markets," says Technical Director Ivo van Dam.
The crucial factor now will be finding the right people.
"It's always difficult, but we know that there is a high level of education in Copenhagen, so we hope we can attract the right people to the company," he says.
