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What is it like to be a contractor in Denmark?

It shouldn’t be too surprising that Denmark is one of the most sought-after destinations among independent professionals looking for contracting opportunities overseas. It is, after all, renowned as one of the world’s most economically and socially developed countries, characterised by high standards of living, civil liberties, democratic governance, prosperity and human development.

But what else do you need to know about contracting in this in-demand corner of Scandinavia?

How easy is it to secure contracting jobs here?

The continued growth of the Danish economy, and the associated upswing in employment, means you may well find a wide range of opportunities to contract in this part of the world.

A particular strength is sustainable energy, the country having set a world record for sustainable energy usage due to a remarkable 43.4% of its energy coming from wind turbines in 2017. The government has committed to building on this success by setting a target of generating half of its energy from green sources – and contractors could play an instrumental role in making it happen.

Moreover, with the Danish Chamber of Commerce having warned that a dearth of talent could act as a drag on Denmark’s growth rate compared to other European locations, Prime Minister Lars Løkke Rasmussen has signalled that he wishes to “continue to hold Denmark open for foreign talent”.

Indeed, with about a tenth of the Danish population being immigrants or descendants of immigrants, the country already boasts a cosmopolitanism that you may appreciate as a contractor from abroad.

What is the local tax situation?

You will become tax resident as a worker in Denmark if you have a permanent residence and a qualifying stay in the country, or if you spend more than six months there. Even if you are not tax resident, however, you will be taxable in the country on any income earned or generated there.

Denmark has a progressive tax rate of up to 56%, including state taxes, health and other taxes. However, a special tax regime exists for expatriates, with a flat tax rate of 32.84% payable – including 8% labour market contributions – subject to certain conditions.

Those who live and work in Denmark for less than six months (183 days) are only required to pay tax on their Danish-sourced income. Staying in Denmark for longer than this, however, necessitates you paying income tax on all of your income around the world, although you are advised to first check the double tax treaties between Denmark and your home country.

How can Link Global Management make life as a contractor in Denmark easier?

With so much to be learned about the legalities of contracting in Denmark, as well as how you can minimise your tax liabilities and simply lessen your stress as an independent professional in this highly rewarding country, Link Global Management can be instrumental in enabling you to make a smooth transition to your new working life here.

Don’t hesitate, then, to enquire to our team for early planning advice, or about us serving as your complete payroll vendor in Denmark for however long you may intend to contract here.

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