If you have a company overseas, a Danish branch will allow you to operate in Denmark on equal terms with the other public and private limited companies in Denmark. Your Danish branch will receive a company registry number, but you will not have to deal with the disadvantages of having a Danish company.
The advantage of having a branch is that no share capital is required. The branch in Denmark is an integral part of the overseas parent company (Companies Act, Chap. 19). One condition is that the purpose of the branch must be the same as that of the parent company.
So, what type of company can conduct business in Denmark through the use of a branch?
Typically, private and public limited companies, and limited partnerships with share capital. These entities are organised in the same way as Danish companies.
Companies within the EU is best placed to take advantage
The question is: From which countries should you operate the business through a branch in Denmark?
The answer is quite simple: You can operate from any country where Danish companies have the same opportunities, meaning all companies within the EU, the EEA countries and the United States, Estonia, or Australia. However, operation is usually the most advantageous from a company within Europe (i.e. a limited company in England)
Companies from other countries must first submit a reciprocity statement.
You must always report your Danish branch to the Danish Business Authority before it is legal to operate. The branch must keep accounts in accordance with Danish law and the accounting process will subsequently be included in the parent company’s annual report. The annual report from the parent company must be published through the Danish Business Authority.
4 advantages of having a Danish branch
- No share capital required for establishing a Danish branch
- A branch is not taxable in Denmark (unless the company has a permanent establishment in Denmark or Danish employees who can enter into binding agreements on the behalf of the parent company).
- If the company has only one branch and no permanent office, it does not register as an employer with the Danish Customs/Tax Agency. An overseas company should not deduct A-tax, AM benefits, nor SP benefits of wages to employees working for the company in Denmark.
- There is no requirement for an accountant in Denmark for the branch.