Denmark

Denmark actively encourages innovation and entrepreneurship. If you are an EU/EEA citizen, you can very easily start your own business in Denmark.

Denmark has been leading the world for many years in terms of the quality of life of its inhabitants, and Copenhagen is considered the best city to live in the world.

Denmark is regularly ranked as Europe’s best place to do business, and it only takes a short time to register your company. 4 out of 5 people in Denmark speak English and half of them speak German, which makes it easy for foreigners to do business there.

Like many other EU countries, the costs for starting a business in Denmark can be quite high, due to the complexity of the legal entity. So, the simplest business model, the sole trader (IVS), will have the lowest costs, while the public limited company, more suited to large businesses with numerous shareholders and employees, will demand a higher investment.

The vast majority of companies in Denmark are limited liability companies – a private limited company (ApS), a public limited company (A/S) or an unlimited/sole proprietorship (IVS). Here is a list of the costs you should consider, depending on the type of company you want:

DKK 670: the registration fee for establishing the company
DKK 1: the minimum share capital for the IVS
DKK 40,000: the minimum share capital for the ApS
DKK 400,000: the minimum share capital for the A/S

All documents can be provided in English. There are no requirements to have local shareholders or local management. The share capital must be paid into the company’s bank account or to the client account of the company’s lawyer. The incorporation costs usually include the lawyer’s fees (I think this correct)?

There are several other costs to consider, in addition to the share capital and the registration fee mentioned above, and include:

Bank’s fee for opening a corporate bank account in Denmark, which is needed for depositing the minimum share capital when setting up your Danish company
Online registration with the Danish Business Authority (DBA). Once registered, the company will become subject to taxation in Denmark
NemID. This is a common secure login to an online portal that allows you to access the online banking services for your company, contacting the public authorities and signing official documents. You can request up to 3 NemID signatures for your employees
Costs for registering your employees for insurance purposes. Your employees must be insured against occupational illness, industrial accidents etc.

Companies in certain business fields may need to obtain special permits and licenses. This incurs additional fees depending on your business model. The lawyer will be able to advise you on this.

Register your company for Tax (SKAT) and VAT

Once your company is registered with the Danish Business Authority, you must register the company for tax and VAT. A company in Denmark is subject to Danish tax legislation and the tax payment will depend on the type of company you have established.

What is SKAT?

‘SKAT’ is the name of the Danish Customs and Tax Administration which manages and enforces tax laws in Denmark.

Corporate tax in Denmark?

The corporate tax rate in Denmark is currently 22%, which is below the OECD average. When establishing a legal entity in Denmark, you must be aware of the various tax structures that apply to the different legal entities.

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. We will recommend a Danish lawyer to assist in the process.