German craftsmen are very popular with Danish customers. Therefore, there are good opportunities to land contracts in Denmark and perhaps establish a second business there. (Photo: © Bram Janssens/123RF.com)
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German craftsmen are particularly popular in the Kingdom. They can score points over their Danish counterparts, especially in specialized fields.
"German craftspeople are very popular with Danish customers," says Anna Griet Hansen, foreign trade advisor at the Flensburg Chamber of Skilled Crafts. They are particularly better and faster in specialized fields. This is partly due to the education system. While Denmark also has a dual vocational training program, it is very school-based, as relatively few companies are willing to train apprentices. On the other hand, according to Hansen, Danish craftspeople are nowhere near as specialized as their German counterparts.
There's no requirement to have a master craftsman's certificate, so skilled trades services are often offered across trades. For German skilled trades companies, this means there are good opportunities to land contracts in Denmark and perhaps establish a second business there.
However, it's not quite as simple as it might sound. Some preparation is necessary – including taking potential cost factors into account during the bidding phase. "You have to think about the topic beforehand," says Kerstin Naumann.
The foreign trade advisor of the Chamber of Crafts East Westphalia-Lippe in Bielefeld advises German companies that want to offer services in Denmark to inform themselves in advance about three areas: VAT, occupational safety (see info box) and the role of the Danish trade unions.
The VAT rate in Denmark is 25 percent. Those who work for commercial customers are generally not required to charge VAT (except when subcontracting). However, those who supply goods or services to private customers are subject to VAT and must register with the Trade and Companies Registration Office (see info box).
To apply for a VAT number, the following documents must be sent to the Trade and Companies Office. The application form is available online at virk.dk.
- Proof of VAT identification number
- Copy of the company owner's ID card
- Copy of offers, agreements and contracts with private individuals
- Certificate of clearance from the German tax office
- Copy of the last annual financial statements
The application must be submitted at least eight days before work begins. After that, it can take three to four weeks for a VAT number (SE number) to be assigned. Craft businesses in Denmark only become liable for income tax if they maintain a permanent establishment there. This automatically applies once they have been working on a construction site for more than twelve months.
If the deadline is exceeded, the tax liability applies retroactively (including for employees). Caution: Work delays and interruptions do not trigger a new start of the deadline. Employees become subject to limited tax liability if they work in Denmark for more than 183 days in a calendar year.
There is no statutory minimum wage in Denmark – wage negotiations are the responsibility of the collective bargaining parties. Most Danish workers are unionized, so unions play a strong role. "They have the right to negotiate collective agreements with foreign companies," Naumann reports.
Such companies are not required to conclude a collective agreement. However, to exert pressure, unions are permitted to use the same conflict resolution measures as they do against Danish companies. In the worst case, the construction site is blocked or even a so-called sympathy dispute is initiated.
Kerstin Naumann recommends informing yourself in advance about the unions' approach. "You should be prepared for this. A conflict of sympathies should not be underestimated." German tradespeople must register with the Register of Foreign Service Providers (RUT) no later than the day they start work in Denmark. This applies to each individual contract.
The work period, area of activity, place of work, the number and master data of the seconded employees, and a contact person who can provide information on the assignment on site must be registered. The RUT notification is made online (at virk.dk/rutOnce the data has been sent, you will receive a receipt, which you should carry with you if possible.
Workplace safety on construction sites plays a major role in Denmark. The responsible authority (Arbejdstilsyn) regularly inspects compliance with regulations. In cases of serious deficiencies, the construction site can be shut down. Information sheets on workplace safety (in German) are available online at at.dk and haandbogen.info.
Although there is no major qualification requirement in Denmark, some trades require a license. This applies, for example, to electricians, plumbers, and sewer engineers (see the complete list online at iu.dk). Generally, German tradespeople working there should carry proof of their business's licensing in Germany (such as a trade license or craftsman's card).
However, anyone performing hazardous work (e.g., working with refrigerants, scaffolding, elevator installation, or welding) must apply for appropriate recognition of their qualifications before commencing work – for each individual employee deployed in Denmark. The responsible authority (the Danish Workers' Competence Center) will issue a certificate (valid for an unlimited period) or require an aptitude test no later than one month after receipt of all documents.
If the work to be performed requires a specific qualification in Germany, training certificates and certain certificates of professional competence must be submitted. If this is not the case, proof of at least two years of professional experience must be provided. This experience must not be more than ten years old. In this case, detailed employment references from current and previous employers must be submitted.
An informal application, however, in Danish, is sufficient. Evidence can also be submitted in English (note the requirement for certification). Also required: a copy of your ID card. The official certificate must be carried at the workplace. Employers and clients have a duty to ensure that anyone performing hazardous work has the appropriate certification.
German craft businesses that want to operate in foreign markets should heed this advice to avoid unpleasant surprises. Different rules and customs often apply – and this is also true in Denmark.
"A certain amount of preparation time is necessary; I recommend this to anyone who wants to work in Denmark," says Karl-Heinrich Depenbrock, Managing Director and shareholder of Depenbrock Bau GmbH & Co. KG in Stemwede. She has already gained experience in the Kingdom. She built a logistics center for a German client on the outskirts of Copenhagen.
The construction contractor advises that the role of unions in Denmark should be considered in advance. "Their power is very strong. And they act quite rigorously." German craft businesses that provide services in Denmark are not required to conclude collective bargaining agreements.
However, Danish unions have the explicit right to approach foreign companies to negotiate such a contract. The unions typically proceed as follows: First, representatives visit the construction site and try to gain an understanding of the working conditions and wages through discussions with the employees.
The company is then contacted. It receives a collective agreement and a deadline to sign it. At the same time, the union issues a first warning of a blockade. A second one follows a week later. If the company fails to sign, it will be blocked seven days after the second warning—provided it is not a member of an employers' association.
This means that employees of the company who are unionized must strike. Union members without jobs are not allowed to return to work for the blocked company.
If the blockade doesn't work, the union can go a step further and initiate a sympathy conflict. This, too, is announced twice. During the conflict, Danish union members are prohibited from performing any work for the striking company. In most cases, Danish companies completely stop work on the construction site, and Danish suppliers stop sending goods.
Depenbrock didn't let it get that far: "We joined the Danish Employers' Association." This obligated the German company to comply with the applicable collective bargaining provisions. As soon as the foreign company signs a collective agreement or joins an employers' association, the peace obligation applies. This may only be violated in the event of renegotiations or violations of the collective bargaining provisions.
"You could say that our wages give us a competitive advantage over Danish companies." But due to the strong influence of the unions, they are under considerable pressure in this regard. "We have therefore tried to work with the highest possible degree of prefabrication," explains Depenbrock.
The managing director of Orthopädie Schuh Center GmbH, Heinz Kobs, from Isselburg, prepared his involvement in Denmark with a business trip: "We participated in a market research trip organized by the Münster Chamber of Crafts. We contacted several Danish companies and introduced ourselves."
In Denmark, the healthcare system is fundamentally different from ours. "The area coverage there isn't as extensive as in our orthopedic shoe technology industry." Therefore, additional capacity is needed. "We now supply a total of ten locations with custom-made orthopedic shoes from Isselburg."
This means that Kobs doesn't export services, but goods. He works with a logistics company. "This completely handles the few formalities for us." This means he doesn't have to worry about the applicable import and export regulations.
Kobs's craft business operates not only in the Danish market, but also in the Dutch market: "We generate about 40 percent of our sales in other European countries." And Kobs wants to further expand this business: "Partnerships with other EU countries are being planned."
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