What is a foundation?
Foundations are separate legal personalities with their own boards, charters and financial statements. A foundation is defined in the Danish Dictionary as a “private institution which administers an endowment which has been donated or set aside for distribution to certain, typically charitable purposes or for the operation of a business. They are similar to irrevocable trusts in common law. Their purpose and non-profit status sets foundations aside from other funds such as private equity funds, venture funds, hedge funds, pension funds, etc.
What is an industrial foundation?
An industrial foundation is a company that owns the majority of a business company. The company will typically be a limited company in which the fund owns the majority of the shares. In rare cases, the industrial foundation may do business in its own capacity. There are also cases where the foundation control s a company through a large minority stake and would then by some be considered an industrial foundation. In others cases, foundations do not consider themselves to be industrial foundations, even though they own the majority of a business company.
How many industrial foundations is there in Denmark?
According to the Commerce and Companies Agency approx. 1200, but most of them are small. There are maybe 100 economically important industrial foundations.
Is industrial foundations a Danish phenomena?
Yes, Industrial foundations are clearly more important in Denmark than in other countries (compared to the size of the nation). Industrial foundations account for 1/5 of private sector employment in Denmark.
What are some of the most important companies owned by industrial foundations?
A. P. Møller-Mærsk, Carlsberg, Novo Nordisk, Novozymes, Grundfos, Danfoss, William Demant Holding (Oticon), J. Lauritzen, H. Lundbeck, Villum Kan Rasmussen (Velux), Rambøll, COWI, Skandinavisk Holding, Falck m. fl. – are all owned by foundations.
Do the Industrial foundations have any impact on Danish economy?
The foundation-owned companies have a turnover of more than 600 billion dollars and has more than 300,000 employees. This is roughly 1/5 of total turnover in Danish private business and 22% of employment, but much of it is abroad. The foundation-owned companies account for the vast majority of private Danish research. Compared to publicly listed companies in Denmark and the other Nordic countries, they also have fair accounting profitability – a return of 7.6% on equity compared to 5.7% for listed companies from 2003 -2008.
Do the foundations pay tax?
Yes, the Danish foundations pay 25% of their taxable income in taxes. They can deduct their expenses to charity, consolidation and provisioning from their taxable income, however. In order not to discriminate foundations that own companies compared to foundations that do business directly though the foundation structure, there is some degree of joint taxation between foundations and majority-owned subsidiaries.
What impact do the foundations donations have?
Through donations, the foundations finance a significant proportion of pharmaceutical research and development in Denmark in addition to contributions to art, culture, education, buildings and social projects, primarily in Denmark.
Are there any industrial foundations abroad?
Yes there is. Industrial foundations own some large and important companies such as Robert Bosch, Bertelsmann, Trelleborg, Kavli, Norske Veritas among others. Beside in Denmark also particularly in Germany, Holland, Sweden and Norway, but one of the world’s largest companies – the Indian Tata Group – is also the foundation-owned.
Danish