Why Copenhagen is a great place for startups
Rome wasn’t built in a day. But a business in Denmark can be. With some of the lowest bureaucratic regulations for businesses in the world, it takes less than 24 hours to set up a company in Denmark, and the procedure couldn’t be more simple.
The World Bank last year – for the seventh year in a row – ranked Denmark the best country in Europe for doing business. A report last year by the Global Entrepreneurship Index also revealed that Denmark's ecosystem for entrepreneurs is the fifth best in the world.
Despite its modest geographical size, Denmark is home to a number of internationally known companies, such as Unity Technologies, Just Eat and Skype. Now, the country’s capital is home to a rising number of accelerators, incubators, coworking spaces and investment funds.
Given their flexible schedules and lighter working hours, it comes as no surprise that the Danish workforce is among the most productive in Europe. And although the cost of living and taxes are high so too is the standard of living. What’s more, the locals here are beyond satisfied. Copenhagen has scored first place in happiness by the World Happiness report numerous time.
At the heart of the city (or the country, for that matter) too is hygge, the quintessential Danish concept of cosiness and well-being, and its presence in Copenhagen is palpable. You can expect to see candles burning all year round (even in business meetings).
From a thriving tech industry to a collaborative work culture, here are some of the advantages when it comes to launching a startup in Copenhagen.
Ease of setting up
As an enterprise-focused country dedicated to attracting foreign interest, Denmark allows entrepreneurial expats to set up their own businesses with relative ease (this can be done online in less than a day).
The biggest challenge to starting a company in Denmark is actually coming up with a great idea and building a supportive network. The good news is that with an unrelenting appetite for the new, the Danes are committed to making life easier for early-stage companies.
Organizations such as Business House Copenhagen, for example, provide a link between businesses and the council (Kommune). They offer guidance to entrepreneurs and startups in terms of required permits, applications and licenses, as well as free educational courses if you are based in Copenhagen or Frederiksberg.
People in Denmark are encouraged to take an interest in working together because it benefits everyone.
If your business is likely to make more that 50,000 DKK a year, you must register it as a business and get a CVR number. Registration is relatively easy, even with limited Danish skills, and is done via the website virk.dk.
There are a number of public funding schemes open to entrepreneurs, including the Innovation Incubator Scheme, which provides counselling, pre-seed and seed capital. There is also the publicly owned and managed venture capital fund, Innovation Fund Denmark, which offers grants.
Opening a bank account is equally as straightforward if you possess a CPR (personal identification) number, which you’ll receive upon registering at a permanent address. If you need one, banks can provide you with an English-speaking advisor who can help you decide which account you need and let you know what charges to be aware of. Most documents can also be completed in English.
Meanwhile, the rise in the number of startups in the city is certainly matched by the amount of coworking spaces available, with some even offering office space for small teams. Most places offer a variety of services and a range of memberships, depending on your company’s needs.
Supportive policies and organizations
For the Danish government, the vision is simple: provide extensive support to foreign entrepreneurs, and receive economic growth, employment and global startup connections in return. One such government-supported investment fund is VC Vækstfonden.
As an economically prosperous country, Denmark offers many opportunities for public funding schemes, access to local and international investors and accelerator hubs, and internationally focused business development organizations.
To assist in startup financing, the Danish government runs public innovation centers as part of their globalization strategy. These act almost like venture funds, but invest much earlier than a standard VC. An initial investment round can be as much as 3-4 million DKK.
Initiatives such as Startup Denmark equip talented entrepreneurs with the necessary tools to build their businesses. Besides offering a residence and work permit which is valid for two years, entrepreneurs are given access to various programs and subsidy schemes that include free mentoring services.
Moreover, seed accelerators have sprung up all over the country to share in the government’s role of nurturing talent. Accelerace, for instance, has helped more than 250 startups raise over $269.5 million USD in funding and investment since 2010.
Being one of the leading smart cities in the world, Copenhagen offers opportunities for smart city tech startups such as investment as well as the possibility to collaborate with the country’s public sector.
A thriving tech sector
Denmark’s thriving economy has its perks for the tech industry too. Rated by the European Commission as the most digital country in the EU, Denmark is certainly fertile ground for new technical innovation to foster.
Home to a world-class information and technology infrastructure, Denmark is the proud owner of some of the world’s best penetration rates for mobile and broadband internet access. 94 percent of Danish citizens are online, meaning that almost the entire market has high speed internet. In a tech-saturated culture, international companies finding new innovations in technology have the perfect platform to test their ideas here.
Committed to retaining their status as one of Europe’s leading tech nations, the Danish government has recently allocated €134 million to initiatives running until 2025, as part of a new ‘Digital Growth Strategy’ – good news indeed for startups in need of capital.
Labster is an example of a local startup that made use of government and foundational grants. In doing so, it produced an interactive laboratory simulator to help science students prepare for real-life laboratories. Using gamification and elements such as an immersive 3D environment and storytelling, Labster developed a more engaging way of learning science.
Aligning with the Danish culture of social consciousness, many startups like Labster seek to make a social impact with their products, and it is the use of technology that enables them to.
An open, collaborative work culture
As a country with a generous social welfare system, Denmark certainly knows how to foster equality and collaboration, not only within business, but in society as a whole. Open discussion is a central aspect of Danish culture, and everybody, young or old, is invited to share their opinions.
Johan Cardrup, Head of Communications at coworking space, Rainmaking Loft, told Startup Guide he believes startups “move forward faster when they share their tricks with each other.” Copenhagen seems to have cracked a coworking formula of openness and respect, which lends itself well to businesses seeking to expand their network.
“People in Denmark are encouraged to take an interest in working together because it benefits everyone,” Christoffer Malling, managing director of non-profit organization Copenhagen for the Win, told Forbes. “If you have draconian employee policies in place, you will create an atmosphere of fierce competition and that’s not conducive to teamwork, especially in small scale startups.”
Moreover, Denmark has streamlined its class system to produce a single class, rather than upper or lower class, which is reflected architecturally in Copenhagen’s office spaces. The modern phenomenon of open plan offices has removed the notion of hierarchy in businesses by opening up the channels of communication between employees and managers. It’s no wonder that productivity in recent years has soared.
Coworking spaces such as Spilhuset also replicate this kind of environment. Located in the centre of Copenhagen, Spilhuset considers itself more of a community of like-minded people than an office. Far from a “gleaming obelisk of an office,” the coworking space’s founder, Michael Flarup, told Startup Guide that Spilhuset is a place where you can “work on your project as though you were at your friend’s house hacking away at something.”
Copenhagen’s relaxed, more democratic approach to working comes down to a culture of trust. Companies consider full integrity to be a no-brainer in negotiations, which makes for high productivity and smooth business transactions.
A great place to work and live
In more ways than one, the Danes have arguably created a model of living that is envied by countries all across the world. By keeping with the deeply esteemed value of trust, employees experience a high degree of autonomy and empowerment at work and are encouraged to find a work-life balance that suits their lifestyle.
With recent investment into public amenities, the quality of life in Copenhagen is at an all-time high. From the annual summer Jazz Festival to the third biggest documentary film festival in the world, CPH:Dox, Copenhagen oozes cultural activity.
Thanks to government environmental policies, Copenhageners enjoy clean air, clean water and a selection of open, green spaces. Sustainable living is the focus, and the city’s inhabitants are happy to get on board.
Safe cycle tracks provide quick transit time for anyone wishing to get from A to B swiftly, and the food scene is booming. An interesting (though hardly surprising) side note is that Copenhagen is said to be home to more bikes than people.
Visit Copenhagen states that only 29 percent of households own a car. By 2025, the city aims to become the world’s first CO2 neutral capital.
Main photo: Unsplash/Diego Aguilar