Company Registration in Denmark

Denmark is a Scandinavian country comprising the Jutland Peninsula and numerous islands. It's linked to nearby Sweden via the Öresund bridge.

Denmark is a country with a very favorable investment climate. Top advantages for investors include ease of doing business and a favorable business climate, high education levels and high quality of life, and a good position in Europe that facilitates access to surrounding markets.

A developed country, Danes enjoy a high standard of living and the country ranks highly in some metrics of national performance, including education, health care, protection of civil liberties, democratic governance, and LGBT equality. It is among the founding members of NATO, the Nordic Council, the OECD, OSCE, and the United Nations; it is also part of the Schengen Area. Denmark also has close ties to its Scandinavian neighbors linguistically, with the Danish language being partially mutually intelligible with both Norwegian and Swedish.

Denmark encourages innovation and entrepreneurship. As an international graduate from a Danish higher education institution, you might want to explore the opportunity of starting up your own business.

If you are a Nordic or EU/EEA citizen, you can start your own business in Denmark. If you are a citizen from outside the Nordic countries, EU/EEA and Switzerland, you have to apply for a residence and work permit in order to be self-employed and/or operate an independent company in Denmark.

 

Denmark is consistently ranked Europe's best place to do business

You can incorporate a Danish company online with all corporate registrations in place in a few hours. No requirements for local shareholders or local resident management apply.

The most commonly used business entity in Denmark is a limited liability company, as it is very quick and easy to form.

 

Why Denmark?

• Equal access to public services     

Foreign citizens with residence and work permits receive the same benefits as Danish citizens including access to free healthcare, medical services, education, and much more.

• Fast-track permits     

A residence and work permit may be issued to international employees within 24 hours under the fast-track scheme. It is required of the employing company to be certified by the Danish Agency for International Recruitment and Integration.

• All employers are required to take out an industrial injury insurance     

The industrial injury insurance should be added to an employee’s salary as the employer’s contribution along with the contribution to the Supplementary Labor Market Pension Fund. These contributions to employer-paid social security are among the world’s lowest. 

 

Three ways to register a company in Denmark

• Online registration: A new company can be incorporated and ready for business within only a few hours by using the online electronic registration system provided by the Danish Business Authority.
• Paper registration: A traditional paper registration of the company will usually take two to three weeks.
• Acquiring a shelf company: An “off the shelf” company is a company that has already been founded and registered but has no previous activities or operations. Such companies can be acquired and up and running from one day to the next.

 

Steps for opening a company in Denmark 

• • Choose a suitable type of legal entity: this is done by observing the size of the future business, its goals, and objectives, along with the available capital for incorporation.
• • Choose a unique business name and open a bank account: each company must have a unique business name and a bank account opened with one of the Danish banks.
• • Actual company registration: once the company’s constitutive documents are complete, entrepreneurs submit all of them to the Danish Business Authority; each company is assigned a CVR number.
• • Tax registration: after it’s registered with the Business Authority, a new company is also registered with the Danish Customs and Tax Administration. 

 

Types of Companies:

• Corporation (A/S or ApS)
• Branch Office
• Representative Office

 

1.Limited Liability Company

The incorporation of a company in Denmark is a quick, informal, and cost-efficient process.

In Denmark, there are two types of corporations that can be set up:

·         Aktieselskab (A/S) [equivalent to a public limited liability company]

·         Anpartsselskab (ApS) [equivalent to a private limited liability company]

The most commonly selected option is the ApS, however, the choice largely depends on the expected activity level in Denmark.

 

2.Branch Office

Foreign corporations operating in Denmark can operate as a branch office without the need to incorporate. However, it is generally advisable to incorporate rather than set up a branch office in Denmark, given the numerous drawbacks associated with having a branch office. Having said that, foreign enterprises wanting to set up a branch in Denmark for lower levels of activity are allowed to do so.

 

3.Representative office

This is the easiest and least expensive type of foreign investment structure to set up and has no registered capital requirements. The defining characteristic of an RO is its limited business scope.   An RO is generally forbidden from engaging in any profit-seeking activities and can only legally engage in preparatory activities such as market research etc.

 

Open a company in Denmark

 Before drafting the incorporation documents, the Danish or foreign entrepreneurs willing to open a business in Denmark must verify the uniqueness of their name at the Danish Registrar. The articles of association of an entity established in Denmark are the main documents standing at the base of each business. It states the internal regulations of the Danish company and all the details related to it such as the company's name, the location of the registered office, the purposes of its establishment, details related to the share capital, the names and addresses of the managing members. These articles of association must be notarized before being used for registration.

 A particularity of the company registration in Denmark is that each business must receive a digital signature known as NEM id. After taking this step it is necessary that the minimum share capital is a deposit in a bank account that will issue a certificate of deposit. 

 Opening a new company is not the only manner in which investors interested in Danish company formation are able to enter the market.  Another option is to purchase a shelf company or a ready-made company that has been incorporated but has had no previous business operations. Interested investors can find out more about this option from our agents.

 

 Corporate Tax In Denmark

The corporate tax rate in Denmark is 22%, which is below the OECD average. When establishing a legal entity in Denmark, it is relevant to be aware of the various tax structures that apply to the different legal entities. Finding the right match between company structure, business needs, and applicable taxation will provide the best foundation for starting your business in Denmark.

If the company intends to have staff in Denmark they must also decide whether they will administer that employment internally or use a Global Employment Organization to handle payroll and Employer of Record responsibilities. A GEO Employer of Record solution is an attractive alternative where

• the company is looking to set up an office quickly
• the company wants to work within a defined budget
• the company wants to limit its initial commitment to Denmark
• the company needs help with tax, employment, immigration, and payroll compliance in Denmark

The complexity of employment regulations in Denmark makes the use of a GEO advisable coupled with local legal counsel to ensure full compliance with employment laws, for example, the drafting of local contracts for workers.

 

A Danish company is a great platform for Nordic expansion

Denmark offers a unique tax rule according to which foreign branches of a Danish company are generally not subject to paying tax in Denmark.

As a result, a Danish company is an ideal platform for Nordic and European expansion from which to set up branches in other countries.

Moreover, establishing a company in Denmark is simpler, faster, and more cost-efficient than establishing a branch. It only takes a few hours to register a company ready for business whereas it usually takes several weeks, and is costlier, to register a branch.

Although setting up a Danish company can be done quickly and easily, we always recommend that you seek advice from an attorney and/or tax expert before establishing a business in Denmark.