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Investment climate

What is the general climate of real estate investment in your jurisdiction?

The real estate investment climate is generally favourable, with low transactional costs and relatively little red tape. In recent years Copenhagen has topped the list of most attractive European cities to invest in.


Who are the most common investors in real estate?

The players are predominantly (Danish and non-Danish) institutional investors, real estate funds and property developers.

Are there any restrictions on foreign investment in real estate?

Non-Danish citizens who have not previously been domiciled in Denmark for an aggregate period of at least five years can purchase real property in Denmark only with the permission of the Ministry of Justice. The same goes for companies and associations that are not domiciled in Denmark.

However, EU citizens, citizens of European Economic Area (EEA) countries and EU companies may purchase real property in Denmark without the ministry’s permission where certain requirements are met, but only if the property is intended to serve as a necessary permanent residence for the purchaser or where the purchase is a prerequisite for operating the purchaser’s own business or supplying services. These more extensive rights follow from Executive Order 764 (18 September 1995).

Non-Danish residents may purchase holiday residences only with the ministry’s permission, which is rarely granted.

Investment structures

What structures are typically used to invest in real estate and what are the advantages and disadvantages of each (including tax implications)?

The structures used depend on the complexity of the transaction in question. Major cross-border real estate transactions can be structurally very complex.

Apart from the straightforward purchase of real estate, it is becoming increasingly common for real estate to be transferred by way of the sale of the shares in the company owning the property in question. The sale of shares does not attract capital gains tax or transfer tax and generally no withholding tax is payable on the sale of the shares. 

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