Time magazine proclaims that Denmark is one of the world's best countries in which to do business. However, the magazine finds it difficult to explain to its readers how a nation with the world's highest tax burden can make a difference.

Under the headline "The Danish difference", Denmark is once again hailed as one of the world's very best countries in which to do business. In its latest issue, Time magazine tries to explain why and expresses its surprise. Because how is it that a small country with high tax burdens, generous welfare and strong unions is able to deliver the goods?

The magazine's special correspondent Justin Fox points out that while globalisation has a negative ring in many countries, the opposite is the case among the vast majority of Danish people, who live in a small country with the world's highest standard of living but which has only two companies - A.P. Møller-Mærsk and Danske Bank - big enough to make the Fortune Global 500 list of the world's 500 largest companies. On the other hand, the country has an abundance of visionary companies within growth areas such as sustainable energy, drugs and luxury furniture.

Combined with a strong economy, this makes Denmark the world's third most competitive nation, points out Time, quoting the World Economic Forum's latest rankings. Curious, because competitiveness is often equated to parameters such as long working days, low taxes and little government regulation.

None of the above applies to Denmark, which has the second highest tax burden in the world after Sweden, a generous welfare state, strong unions and at least five weeks of paid vacation annually.

One explanation is maybe that Denmark pursues highly business-friendly politics with very few restrictions, low company taxes and much lower taxes on capital income compared with taxes on earned income. In addition, Denmark is the country in Europe where it is easiest to fire employees.

According to Time, Denmark's homogenous population and modest size are decisive for how the economy functions in a country where the informal, the ability to discuss and not least the lack of blind respect for authority are typical Danish characteristics.

Read the article here at Time Magazine's website:

http://www.time.com/time/magazine/article/0,9171,1684528,00.html