Do you have a great business idea and wish to turn your idea into your livelihood, then think carefully before establishing a company.
Denmark is known for their positive business culture. Registering and purchasing a company is fairly simple once the concept and business plan is in place. If the company is used in conjunction with an existing business by people who are already self-employed, the establishment is fairly straight forward. However, having a great idea and plenty of drive means you must to think carefully before setting up a new business. An idea can often be sold on a much larger international scale than just in Denmark, which is why it might be advantages to think about your company structure right from the start.
If you start a company in Denmark and have your idea registered in association with your company, your IP (intellectual property) belongs to your Danish company. If you then see a sudden opportunity to earn a lot of money by moving the company (and maybe yourself) abroad, it could cost you a considerable amount of money in taxes in the form of a “vacating tax”. It is therefore essential that you investigate the possibilities thoroughly before establishing the company.
What type of business would you like to set up?
Thinking about what kind of business you’d like to set up is a good idea before proceeding. By this we don’t mean whether you should start a limited company, a limited liability company or the like, but rather what the company should deal with. It can be critical to your future business and earnings that your business structure is tailored to your goals and desires.
If you have a great product idea and you’d like to make your invention your livelihood, then the company structure will be different than if you have a shop where you provide local services.
The local shop is absolutely fine as long as it’s registered as a sole proprietorship, personally owned small business (PMV), or why not a partnership if there is more than one person involved. You could also establish an entrepreneurial company, private limited company, or partnership company. These companies, however, do require investments and the owners are also liable for the loan capital.
5 advantages of an English company
If this is the first time you need to register a company for your product or good idea, spending some time thinking about how to make the most of it will pay off. Otherwise you might find yourself having a great business idea and be locked into development constrictions. If you currently have one or more companies and want to establish yourself internationally, making sure you do it in the best way possible is very important. Here is a breakdown of the advantages of an English company:
1. Place your IP in England – avoid vacating taxes
Establishing a company (Ltd.) in the UK means you can place your IP in this company, thus completely avoiding the vacating tax when your business grows beyond the borders.
2. Deduct your development expenses
If you further develop your idea or product in England, you have the option of deducting development expenses by 150 percent in your UK accounts. The development of products and patents in the UK is huge and the interest in creating global successes equally huge.
3. Work as usual with a branch in Denmark
Even if you decide to establish a branch in Denmark via your UK company, you can work as usual in Denmark, as long as the company is registered with the Danish Business Authority. However, you should only provide annual accounts in England, and the process is much easier than it is in Denmark.
4. Offshore holding companies offer several advantages
Having a holding company registered offshore is also a normal business practice in England, which in turn gives your other companies or business partners around the world access to your product. That way you have 100 percent control of your IP and taxation is located where your or your company is operational and where you’d like to stay. Keep in mind that there is no capital gains tax in most offshore countries, so many property owners and shareholders like using this advantage.
5. Full wage deduction
You have a full wage deduction in England, so your Mergers, Acquisition, and Development team should be placed in an English company.
